The executive chairman of United Nigeria Airlines, on Thursday, dismissed allegations that domestic operators failed to remit the five percent Ticket Sales Charge (TSC) to the Nigeria Civil Aviation Authority (NCAA), insisting instead that Nigerian airlines had maintained full compliance with the regulatory agency before recent labour disputes.
Speaking at the 30th annual conference of the League of Airport and Aviation Correspondents (LAAC) in Lagos, with theme: “Towards a Sustainable Aviation Industry: Balancing government revenue demands with sector growth “, Prof. Okonkwo said that prior to February this year, all airlines were meeting their financial obligations to the government without issue.
According to Okonkwo, payment difficulties emerged only when airlines began to have issues with the cost of aviation fuel which had increased to N3,300 as a result of the US-Iran crisis. He said the Airline Operators of Nigeria (AON) was the first to raise concerns about the financial burden of regulatory charges during the downturn.
“Before February this year, there were no payment problems. All airlines were paying. The AON issue only became a problem because of the Gulf crisis. AON was the first to cry out. We wrote to the President, explaining that we could no longer pay these charges. We requested either a complete suspension of charges or temporary relief during the aviation crisis, and the request was granted. The President agreed and waived 30%,” Okonkwo disclosed.
Following the presidential waiver, Okonkwo said airlines had a meeting with the NCAA and the Ministry of Aviation to establish a structured repayment framework. “We met with NCAA and the Minister. We held several meetings. In one decisive meeting, NCAA requested that airline operators pay 10% of the legacy debts within a specified period, and then pay the rest in instalments over a period of time and each airline was to meet with NCAA’s director of finance.
“The airlines complied with this directive. The airlines did this. The director met with operators in Lagos and Abuja, and we developed a payment plan. This plan was in place. When you have a payment plan in place, it does not mean you will default. We were making regular payments according to the agreement we had with the NCAA until we heard about the labour union, problem,” he said.
To demonstrate commitment, he revealed that United Nigeria Airlines established a proactive payment mechanism with NCAA. “At United Nigeria, to ensure no issues, we opened joint accounts with NCAA at Nigerian banks. The account was structured so NCAA could withdraw funds directly without asking us,” he explained.
Prof. Okonkwo who is the spokesperson of the AON disputed characterisations that operators were non-compliant. He said: “When people discuss money not remitted or paid by operators, they fail to mention how much operators do pay. When they talk about unpaid money, I ask: what have you done with all that we have already paid? That is the proof, and that is my concern.
“Beyond what we pay, we do not receive adequate value. When different stakeholders and agencies are asked to explain this, they simply say the government takes a large chunk of this money. The question is: for what?
“Most of you here know that money charged is supposed to provide recovery. When we request NCAA to inspect our aircraft in London or America, they come, and we pay them. We do all this 100% in advance. But when you speak of a 5% charge, it remains unclear.
“When you take 5% of any business, a business I borrowed money to run, a business that costs me sleepless nights, that is too much for anyone to extract from it. And this is on top of taxes we already pay. The call for removal of this 5% must not stop. It must continue until we remove it. We would not be able to have smooth operations until this is resolved.”
