Africa: Stakeholders tackle aviation agency over 100% PSC increase from $50 to $100 for international passengers

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Stakeholders in Nigeria’s aviation sector have raised serious concerns over sharp increase in the amount of Passenger Service Charges (PSG), by the Federal Airport Authority of Nigeria (FAAN) from N1000 to N2000 for domestic and $50 to $100 for international travel.

The increase in the PSC is coming against the backdrop of the promise made by the Minister of Aviation, Hadi Sirika that there might not be any need to increase air fares by airline operators in the industry.

According to atqnews.com, Sirika had through the ministry of aviation’s twitter handle assured air travellers travellers in the country that ticket prices may not rise when the sector resumes.

The ministry on its twitter handle said: “Minister of Aviation, Hadi Sirika assures Nigerians that the expected re-opening of the airspace for domestic flight may not necessarily lead to a hike in fares.

“We are doing everything to ensure that ticket prices do not skyrocket. They may be different but they are not going to be something that air passengers cannot afford.”

But in contrast to the minister’s promise FAAN has jacked up the prices of the PSC to the bewilderment of stakeholders in the sector.

One of the stakeholders notable in the sector argued that the increase is coming at a time when every aspect in the aviation business if grappling with the impact caused by the coronavirus pandemic on the sub sector.

He said: “In this pandemic and economic hard times, is this the right time for FAAN or any agency to be increasing statutory fees? Rather this should be the time to reduce the high cost of operations in Nigeria and to encourage air travels.

“And the increase is not a single digit increase but it is 100%, domestic from N1000 to N2000 and foreign from $50 to $100. These are massive increases and really should be revisited.

“Of course the airlines will do their best to pass this directly to the customers who are already struggling financially. And to think this is being proposed for implementation in less than two months in August is very concerning.

“I have no doubt FAAN needs more money but this is a direct Tax on the traveling public already struggling with financial challenges in a depressed economy,

“The quantum of the increase at 100% and the timing of execution is something that should concern all stakeholders without any sentiment.”

Another airline operator in the sector added that: “The entire West Africa and Central Africa needs to be tax free, with Zero Airport Tax.”
With this increase air travellers might need to reconsider their plans on boarding an aircraft for any travel soon.

Another stakeholder who expressed his disappoint over the issue stated that: “The news from aviation agencies such as this helps me review my intending travel plans. I will do much more transactions online. Conduct meetings by video conferencing and move documents by courier.

“Avoid travel since every organization in the industry have a reason to increase the price of the services they offer at resumption; and they have put us all on notice. There are too many hurdles and happenstances to cross as a possible traveler. Unions are threatening strikes, we don’t know how we would be seated on aircraft; what happens if one pax on the flight has an increase in temperature? I thank the aviation industry for sending an intending traveler the inputs to make travel decisions.

“The bailout structure is unknown though it has been promised. The intending air traveler needs to be encouraged just as the operators need to be enhanced. Interesting times we find ourselves. The end user will always pay if he must use the services; but does the economy support the purchasing power?” he queried.

A notable aviator in the sector however pointed out that airlines in the sector have over the years taken similar decision without recourse to the recourse to the provisions of the economic regulations of the Nigerian Civil Aviation Regulations, Nig CARs.

He said: “PSC is service charge not tax. FAAN is an operator like the airlines governed by the same economic regulations. Over the years, airlines have been increasing air fares unilaterally without recourse to the provisions of the economic regulations of the Nig CARs. The major sources of revenue earnings for FAAN are PSC and landing and parking; the questions to ask the domestic airlines operators; how many of them pay regularly these changes? How many are indebted to the services providers? How has the NCAA being handling defaulters in its oversights?”

FAAN had sent a memo to operators in the sector stating that:
“The implementation of the new PSC is premised on the approval given by the Minister of Aviation in the attached letter referenced FMT/FMA/COM/T/69 dated 3re August, 2017, which was sought with the intention to improve and upgrade the airport infrastructure among others.”

“We recently notified the Honorable Minister of Aviation of our intention to commence the implementation effective 1st August, 2020.”

The memo read, “Suffice to mention that on several occasions, we had engaged NCAA and relevant stakeholders which delayed the implementation date.” ”Some of the engagement are as follows: Setting up of an in-house committee to come up with strategies for smooth implementation, Sensitization of the general public, Engagement of stakeholders, airlines etc.”

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