Airlines, NCAA Locked in Regulatory Fee Debate as ASRTI Proposes Automated Collection Framework
The lingering disagreement between the Nigerian Civil Aviation Authority (NCAA) and domestic airlines over the collection of regulatory charges has once again come under scrutiny, with the Aviation Safety Round Table Initiative (ASRTI) proposing a comprehensive overhaul of the existing system to eliminate recurring disputes and improve revenue collection.
In a press statement titled “ART Advisory Note 6A/26: Integrated Framework for Regulatory Fee Basis and Automated Collection,” the President of ASRTI, retired Air Commodore Ademola Onitiju, said the persistent friction between the NCAA and members of the Airline Operators of Nigeria (AON) highlighted fundamental structural weaknesses in the administration of the statutory five per cent Ticket Sales Charge (TSC).
According to the industry group, the current ad valorem arrangement effectively turns airlines into unpaid collectors of regulatory funds, compelling carriers to absorb merchant processing costs on monies that do not belong to them.
ASRTI noted that because regulatory charges are mixed with airlines’ operational revenues at the point of ticket purchase, carriers operating on thin profit margins often face the temptation to utilise the funds to meet pressing obligations such as aviation fuel purchases and aircraft maintenance requirements.
The organisation warned that this practice has over the years contributed to huge debt backlogs, prolonged reconciliation exercises and recurring stand-offs between airlines and the regulator over unpaid charges.
It further observed that the present manual reporting and delayed billing processes have become sources of friction, frequently putting airlines and the NCAA at odds during audits and financial reviews.
Beyond the collection mechanism, ASRTI said operators have consistently questioned the legitimacy of the five per cent charge, citing the International Civil Aviation Organisation’s (ICAO) principle of cost-related charges contained in Document 9082.
According to the initiative, airlines argue that passengers occupying different fare classes consume the same safety oversight and air navigation services, making the imposition of varying charges based on ticket prices inconsistent with internationally accepted principles.
ASRTI also pointed to what it described as distortions created by modern ticket pricing structures. It explained that airlines facing rising operational costs often keep base fares relatively low while introducing fuel surcharges, foreign exchange adjustment fees and ancillary charges for services such as baggage and seat selection.
Because the five per cent levy is calculated only on the base fare, the organisation said the regulator ends up receiving a lower amount than the actual economic value paid by passengers, thereby creating revenue leakages and complicating auditing processes.
To address these challenges, ASRTI proposed replacing the percentage-based levy with a uniform flat-rate charge for domestic and international passengers.
The group said a fixed charge would transform aviation safety regulation into a predictable utility fee and bring Nigeria’s charging framework into alignment with ICAO’s principles of non-discrimination and cost-relatedness.
As part of its recommendations, ASRTI advocated the deployment of an automated split-payment architecture integrated into digital payment systems.
Under the proposed arrangement, whenever a passenger purchases a ticket through an airline website, mobile application or global distribution platform, the payment gateway would automatically separate the regulatory charge from the ticket fare at the point of transaction.
The regulatory component, ASRTI explained, would be transferred directly into the Federal Government’s Treasury Single Account, while airlines would receive only the actual fare revenue.
For bookings made through travel agencies, the initiative recommended the use of pre-funded digital wallets, which would ensure that regulatory fees are deducted instantly during ticket issuance.
Similarly, for passengers making payments through physical channels, ASRTI suggested the deployment of smart kiosks and designated bank desks capable of processing regulatory charges independently before ticket issuance and boarding pass authorisation.
The aviation think tank said the proposed framework would eliminate revenue leakages, reduce disputes over historical debts and insulate the NCAA from fare restructuring practices adopted by airlines.
It added that basing revenue projections on passenger volumes rather than ticket prices would provide the regulator with greater certainty in planning safety oversight and capital expenditure programmes.
For airlines, the organisation said the new system would improve cash flow, eliminate the burden of collecting regulatory charges and protect carriers from sanctions or operational disruptions arising from accumulated debts.
ASRTI maintained that removing airlines from the custody chain of regulatory funds would create a more efficient and transparent ecosystem capable of supporting sustainable growth in Nigeria’s aviation industry.
The body disclosed that a comprehensive report containing its recommendations would be forwarded to relevant government agencies for consideration.
