Domestic Airlines Reject NCAA Indebtedness Allegation, Demand Reform of Aviation Levies

The Airline Operators of Nigeria has dismissed claims that its member airlines owe the Nigeria Civil Aviation Authority outstanding regulatory charges, insisting that all services rendered by the aviation regulator are fully paid for before they are delivered.

In a detailed statement issued on the controversy surrounding recent publications by the NCAA, the AON accused the authority of attempting to regulate airlines through media campaigns rather than through established statutory procedures.

The association described reports portraying domestic airlines as debtors to the NCAA as inaccurate and misleading, stressing that no operator receives regulatory services without first making payment.

According to the AON, the NCAA maintains a strict advance payment system covering all regulatory activities, including aircraft inspections, validation of crew operating licences, certification renewals and other regulatory approvals.

The body stated that invoices are issued for every service and operators are compelled to settle them before any action is taken by the regulator.

“The suggestion that domestic airlines are indebted to the NCAA for regulatory services is factually incorrect,” the association said.

The AON clarified that the issue being referred to by the NCAA concerns the five per cent Ticket Sales Charge, which it described as a tax imposed on airline passengers rather than a debt arising from regulatory services.

The association argued that the charge has become a major financial burden on local airlines, particularly as carriers continue to grapple with rising operational costs and worsening global economic conditions.

It disclosed that many airlines previously operated dedicated accounts through which the NCAA directly withdrew monthly remittances.

However, the association said severe financial strain in the industry, worsened by the global impact of the Iran-Israel-United States conflict and soaring Jet A1 fuel prices, had created cash flow difficulties for operators.

The AON revealed that it had formally appealed to the Federal Government through the Minister of Aviation and Aerospace Development for a temporary suspension of statutory aviation charges to help domestic airlines survive the current economic pressures.

As part of interim relief measures, the association said President Bola Ahmed Tinubu approved a 30 per cent concession while discussions continue on other requests presented by operators.

While thanking the President for the intervention, the AON said it had also requested an audience with him to discuss broader support measures needed to stabilise the sector.

The association maintained that the NCAA should operate strictly as a regulatory agency and not as a revenue-generating institution.

It therefore called on the Federal Government to urgently amend the Civil Aviation Act to enable the NCAA collect any approved charges directly from passengers or through independent channels instead of using airlines as collection agents.

According to the AON, domestic carriers currently incur additional banking and transaction costs while remitting the funds to the regulator.

The body proposed that the new arrangement should take effect from June 1, 2026. Providing historical context, the AON traced the origin of the five per cent Ticket Sales Charge to the administration of former Head of State, General Yakubu Gowon, when the levy was introduced by the defunct Federal Civil Aviation Authority more than 45 years ago.

The association explained that the charge was created to fund the maintenance of airports built across the country at a time when the aviation sector lacked adequate budgetary allocation.

It noted that during that era, the charge applied only to foreign airlines, while the then national carrier, Nigeria Airways, was exempted.

The AON further explained that over the years, the aviation sector evolved into multiple agencies, including the Federal Airports Authority of Nigeria and the Nigerian Airspace Management Agency, each introducing separate fees and levies payable by airlines.

The association alleged that despite opposition from airline operators and industry stakeholders, the NCAA eventually incorporated the Ticket Sales Charge into legislation.

It stressed that the levy is particularly burdensome because it is charged on airlines’ gross revenue rather than net profit, despite the aviation industry’s traditionally narrow profit margins.

The AON warned that the accumulation of taxes, charges and levies imposed by aviation agencies and other statutory bodies had placed domestic airlines under severe financial pressure.

According to the association, the survival of the aviation industry requires urgent government intervention because of the sector’s strategic role in driving commerce, connectivity and national economic growth.

The AON, however, reaffirmed its readiness to continue constructive engagement with the Federal Government and other stakeholders to achieve a more sustainable and growth-oriented aviation industry in Nigeria.