Regulators and specialists at odds over proposed 5% surcharge on flight bookings

Stakeholders in Nigeria's aviation sector are calling for a review of the sharing formula for the five per cent Ticket Sales Charge/Cargo Sales Charge, with the Nigerian Airspace Management Agency, NAMA, requiring a larger share to upgrade air navigation infrastructure.

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The Nigerian Civil Aviation Authority, NCAA, has expressed concerns that any reduction in its statutory allocation could weaken aviation safety oversight and regulatory effectiveness, as stated by Director of Public Affairs and Consumer Protection, Michael Achimugu, in a recent address to newsmen in Abuja.

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Achimugu noted that while NAMA is self-sustaining, the NCAA relies heavily on the Ticket Sales Charge to fund its regulatory functions, highlighting the need for a review of the current revenue sharing formula.

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Under the current formula, as outlined in the Nigeria Civil Aviation Act, 2022, the NCAA receives 56 per cent of the revenue, NAMA gets 22 per cent, the Nigerian Meteorological Agency, NiMet, receives nine per cent, the Nigerian College of Aviation Technology, NCAT, gets seven per cent, and the Nigerian Safety Investigation Bureau, NSIB, receives six per cent.

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A proposed bill, which has passed its second reading, seeks to amend the sharing formula, reducing the NCAA's allocation to 40 per cent and increasing NAMA's share to 40 per cent, a move supported by aviation experts who believe the current formula does not reflect NAMA's critical infrastructure responsibilities.

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Leading the charge is the Aviation Safety Round Table Initiative, ASRTI/ART, with its President, Air Commodore Ademola Onitiju, retd, stating that increasing NAMA's allocation is justified due to the agency's responsibility for providing aeronautical and air navigation services.

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Onitiju emphasized that the proposed amendment is acceptable, given the importance of NAMA's infrastructure and equipment in ensuring the safe management of Nigerian airspace, both domestically and internationally.

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However, Onitiju also urged the government to provide additional funding for the NCAA, as the authority is responsible for carrying out Nigeria's obligations under the International Civil Aviation Organisation, ICAO.

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Aviation safety and security expert, Group Captain John Ojikutu, retd, also faulted the existing revenue-sharing formula, describing it as inequitable and highlighting the need for NAMA to receive a larger share due to its critical role in providing aeronautical services.

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Ojikutu noted that the calibration of navigational and aerodrome approach equipment, such as the Instrument Landing System, ILS, radar, and Very High Frequency Omnidirectional Range, VOR, requires significant funding, often in foreign currency.

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Former Managing Director of NAMA, Mr Roland Iyayi, now a Trustee Member of the Airline Operators of Nigeria, AON, has criticized the five per cent TSC, describing it as unsustainable for domestic carriers and proposing the replacement of the TSC with an Aviation Development Fund.

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Iyayi argued that the five per cent TSC has defeated its original purpose of developing aviation infrastructure, with funds being diverted to non-aviation purposes, and emphasized the need for a dedicated fund to support infrastructure projects within the sector.