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Minister orders aviation agencies to recover N40.08bn debt from airlines

By on August 13, 2016

The Minister of State for Aviation, Senator Hadi Sirika has directed aviation agencies to recover the huge debts owed them by airlines and terminal facility operators before the end of September.

Sirika who gave the directive stated that the government needs the money for the development of the industry and remittance to federation account. Agencies are required to remit 25 percent of their earnings to the federal government account to enable the government meet its obligations to the people.

Sequel to the directive, the agencies such as the Federal Airports Authority of Nigeria (FAAN) and the Nigeria Airspace Management Agency (NAMA), have intensified their debt collection drive and have forced airlines to abort their operations.

It was also gathered that some of the airlines have started paying up the debts while some have met the agencies to reconcile their debts and work out repayment plan.
Also, the pay as you go policies of NAMA and FAAN have been reinforced to ensure that henceforth airlines do not owe the agencies.

A source at NAMA disclosed to THISDAY that the agency is owed N8.08 billion; the Nigeria Civil Aviation Authority (NCAA) owed N12billion, while FAAN is owed N20billion as at the time of filing this report.

THISDAY also gathered from NCAA said it has introduced no-pay, no-service policy, whereby every airline must pay before the agency would attend to its needs such as issuing certificates to its crew, aircraft inspection after maintenance among others.

THISDAY also reliably learnt that almost all the debts are owed by domestic airlines as the International Air Transport Association (IATA) collects charges from international operators for the aviation agencies.

Another source said that some of the airlines are finding it difficult to reconcile their debts with some of the agencies due to the absence of transparent system to document the debts with evidence of the provision of service as it is done in other parts of the world. Some of the airlines, according to source, believe the debt that accrued to them was exaggerated and they are shortchanged because they are being forced to pay for the services that were not rendered to them by the agenciies.

Also an airline official told THISDAY that if airlines were able to maximise their equipment and operate up to 14 hours a day, they would generate enough revenues to offset their charges and taxes, but expressed the regret that the circumstances have forced airlines to perform grossly below maximum capacity.

“Most airports do not have airfield lighting so you cannot operate there in the night; there is no aviation fuel and this impedes flight operations and leads to cancellation and delay of flights and the price of aviation fuel has become outrageous because it is scarce. Besides, there are some of the charges that are inexplicable; that seem as if government wants to stifle air operations in Nigeria, if not I don’t see why they should be charging VAT on air transport.

Government must increase waivers it gives to airlines so that they could operate profitably. Air transport is the catalyst of the economy and without it the economy will be adversely affected,” a source told THISDAY.

Another operator said that while the minister’s directive was in order, it is his responsibility to ensure that the necessary infrastructure is in place to ensure seamless flight operations, noting that it was unrealistic to insist that the airlines should pay all their debts knowing that there is no airline in the world that is not indebted. The operator added that government’s inaction in providing the necessary facilities that inhibits the airlines from maximising their operation.

“Government should know that if it wants the airline industry to grow it has to cut down on these charges. That is a way of supporting the airlines. It should also know that if airfield lighting is working in 10 out of the 22 airports built by the federal government, airlines could operate into the night in these airports. But it is only four airports that have working airfield lighting,” he said.

 

[ThisDay]