The Group Managing Director of Finchglow Holdings Ltd, Bernard Bankole, has expressed concerns that airlines failing to remit the 5% Ticket Sales Charge to the Nigeria Civil Aviation Authority may raise questions about their commitment to safety and financial responsibility. This warning comes amid a lingering dispute between domestic airlines and the NCAA over the non-remittance of the charge. The charge is a statutory levy that airlines are required to collect and remit to the NCAA.
The 5% Ticket Sales Charge has been a contentious issue in Nigeria's aviation industry, with airlines arguing that it adds to their financial burden. They also object to acting as collection agents for the charge, which they regard as a statutory levy rather than payment for services provided to them. However, Bankole argues that the TSC is not money belonging to airlines, but funds collected from passengers on behalf of the relevant government agencies and therefore ought to be remitted as required.
Bankole emphasized that the TSC is not an optional payment, but a statutory obligation that airlines must fulfill. He questioned why domestic airlines had continued to complain about the 5% charge when international airlines were also required to pay the same percentage on applicable international tickets. According to Bankole, the domestic airlines' complaints about the charge are unwarranted, given that they are already paying it on international tickets.
To resolve the recurring dispute over TSC payments, Bankole called for the establishment of a centralized and automated data system that would allow airlines to monitor their obligations in real-time. This system would eliminate uncertainty over outstanding payments and reduce dependence on manual processes. Bankole also suggested that the NCAA should provide airlines with online access to their payment records.
The NCAA has alleged that domestic airlines owe it about N19bn and $7.6m in unremitted 5% TSC and Cargo Sales Charges. However, the airlines have disputed the indebtedness. Bankole also called on the Federal Government to write off genuinely doubtful legacy debts owed by indigenous airlines, arguing that forcing new management to inherit liabilities accumulated over several years could undermine the survival and financial stability of carriers.
Bankole emphasized that where a debt had remained outstanding for five, 10 or even 15 years and had become doubtful, continued pursuit of its recovery could become counterproductive. He argued that the government should treat genuinely irrecoverable legacy debts as doubtful and allow airlines to make a fresh start instead of continuously burdening them with liabilities accumulated under previous administrations and managements.
The dispute over TSC payments has significant implications for investor confidence in the aviation industry. Bankole warned that if airlines are seen to be unwilling to fulfill their statutory obligations, it may deter investors from partnering with them. He emphasized that the industry must prioritize transparency and accountability in its operations to attract and retain investors.
Key points
- The failure of airlines to remit the 5% ticket sales charge to the NCAA raises concerns about their financial responsibility and commitment to safety.
- A centralized and automated data system is needed to resolve the dispute over TSC payments and eliminate uncertainty over outstanding payments.
- The government should write off genuinely doubtful legacy debts owed by indigenous airlines to allow them to make a fresh start.
