Interest groups divided on NAMA's portion of airline taxes

The controversy surrounding the sharing formula for the Ticket Sales Charge in the aviation sector has taken multiple turns, with stakeholders sharply divided on the best solution, whether it be allocating a larger share to safety agencies or conducting an independent assessment of their funding needs and infrastructure efficiency.

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Industry experts have expressed concern over the growing tension in the industry resulting from the TSC sharing formula, with some arguing that the Nigerian Airspace Management Agency requires a larger share of the aviation levy to maintain critical infrastructure.

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Others, however, caution that increasing funding without demonstrated efficiency could be counterproductive, essentially throwing more money at an underperforming system, and experts are calling for discreet investigations into the spending of the agencies.

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Former Group Captain at the Murtala Muhammed Airport, John Ojikutu, believes that NAMA's responsibilities and operating costs justify a review of its share of the TSC, given the agency's provision of essential services that underpin the safety of virtually every flight operating through Nigerian airspace.

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According to Ojikutu, NAMA provides air traffic and navigational services to a wide range of aircraft, including commercial airlines, private and government aircraft, diplomatic flights, and military traffic, and its responsibilities include air traffic control, flight information, and emergency coordination.

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Ojikutu further explained that NAMA manages Nigeria's territorial airspace, ensuring the safe separation of aircraft from departure to arrival, and that the agency depends on a network of sophisticated equipment, including surveillance radars and communication systems.

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He noted that this equipment cannot be allowed to operate beyond their maintenance and calibration limits, and that the agency's personnel, including over 3,000 staff, 800 air traffic controllers, and 500 engineers and technologists, require regular expenditure and training.

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Ojikutu stressed that navigational equipment is subjected to scheduled maintenance and calibration, with some pieces requiring periodic maintenance every six months, while others have mandatory maintenance every 12 months.

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He argued that NAMA's earnings from charges on airlines and private operators are insufficient to meet the cost of maintaining the extensive safety infrastructure, and that domestic airlines have failed to fully meet their financial obligations, compounding the agency's funding challenges.

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Ojikutu called for an increase in NAMA's share of the TSC/CSC/CFC proceeds from 23 per cent to 40 per cent, warning that inadequate funding could expose flight operations to risk if critical equipment remains in service beyond their prescribed maintenance or calibration periods.

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However, aviation analyst and former Rector of the Nigerian College of Aviation Technology, Sam Caulcrick, disagreed with Ojikutu's argument, saying that operating expenditure alone is insufficient justification for increased funding without operational efficiency.

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Caulcrick argued that capital expenditure in aviation must be tied directly to improved efficiency and revenue protection, stating that every capital expenditure must deliver two key benefits: operational efficiency and revenue protection.

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He pointed to Nigeria's upper airspace communications architecture as an example, arguing that the use of repeater-based communication instead of optimised line-of-sight VHF coverage has created blind spots and communication delays at high altitude.

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Caulcrick claimed that this has resulted in unreliable radio communication between pilots and air traffic controllers, with airlines allegedly choosing alternative routes to avoid Nigerian airspace, and that overflight charges could become a key revenue stream if confidence in the country's air navigation infrastructure is restored.

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His prescription is to improve upper-airspace communications first, recapture lost overflight traffic, and then reassess the agency's funding needs, warning against funding inefficiency and calling for a step-by-step approach to addressing the issue.