Nigerians Brace for New Travel Costs: N20bn Aviation Debt Sparks 5% Ticket Levy Demand

The Airline Operators of Nigeria (AON) and the Nigeria Civil Aviation Authority (NCAA) are embroiled in a significant dispute over the collection of the 5 per cent Ticket Sales Charge (TSC) and Cargo Sales Charge (CSC). The NCAA claims fiscal incapacitation, citing over N20 billion in unpaid accruals from these charges, which it says hinders its ability to pay its 1,500-strong workforce allowances and execute essential projects.

AON, in response, has urged the NCAA to establish a framework for direct collection of these charges from passengers to resolve the recurring impasse and prevent airlines from accumulating further debt. They referenced the Federal Airports Authority of Nigeria (FAAN) as a precedent, which successfully ended similar controversies by implementing a system where airlines purchase Passenger Service Charge (PSC) stickers upfront and attach them to boarding passes, allowing FAAN to collect revenue directly.

Michael Achimugu, the Director of Public Affairs and Consumer Protection at NCAA, acknowledged the possibility of direct collection but emphasized that the current law mandates airlines to collect these charges on behalf of the NCAA. He added that while protocols can evolve, any change would require an amendment to the Civil Aviation Act, and airlines must first settle their outstanding debts before such a system can be considered. Achimugu also hinted at ongoing discussions, including a closed-door meeting between the Minister of Aviation and Aerospace Development, Festus Keyamo, NCAA Director General, Captain Chris Najomo, and AON executives.

AON, however, presented a different perspective, asserting that the 5 per cent TSC is not an additional charge to passengers but a deduction from airline revenue, which significantly depletes their capacity to offer competitive fares. They highlighted that airlines already bear numerous financial commitments to aviation agencies for cost recovery services, such as pilot and cabin crew license renewals and inspections. The operators argue that adding a 5 per cent revenue generation charge, distinct from cost recovery, is not in line with International Civil Aviation Organisation (ICAO) recommendations and standard practices, which frown upon government agencies taxing airlines beyond obligatory payments for services rendered.

Airlines also pointed to the sudden and drastic increase in aviation fuel prices, triggered by the Middle East conflict, as a major factor exacerbating their financial woes. This surge in jet fuel costs, with prices ranging from N2,500 to N3,300, has multiplied operational expenses, forcing some airlines to borrow at exorbitant interest rates of up to 30 per cent just to sustain operations. One major airline reportedly borrowed N48 billion in seven weeks due to these costs, leading to a situation where