No Pay No Service: Local Airlines Deny Owing, Say NCAA Should Collect Charges Directly From Passengers

The Airline Operators of Nigeria (AON) have denied owing the Nigeria Civil Aviation Authority (NCAA), insisting that domestic carriers pay in full and in advance for every regulatory service rendered by the agency.

The operators also faulted recent claims suggesting airlines were indebted to the NCAA, stressing that the aviation regulator “should not function as a revenue-generating agency of government.”

The airlines’ position comes amid controversy over the NCAA’s proposed enforcement of the “No Pay, No Service” directive against airlines with outstanding statutory remittances.

In a statement issued on Monday, the AON described media reports portraying airlines as debtors to the NCAA as “misleading” and accused the regulator of attempting to “use the media to regulate operators outside the established regulatory framework.”

“The AON wishes to make it clear that all cost recovery services rendered by the NCAA to domestic airline operators are paid for fully in advance on a cash-before-service basis,” the association stated.

It explained that for every regulatory service, including validation of crew licences, aircraft inspections, and documentation renewals, the NCAA first issues invoices which airlines must settle before any service is rendered.

“In practice, no domestic airline in Nigeria receives NCAA regulatory services without first making the full payment of invoices issued to it by the NCAA. Consequently, suggestions that domestic airline operators are indebted to the NCAA for regulatory services are factually inaccurate,” the group added.

According to the operators, the issue being referenced by the NCAA relates only to the five per cent Ticket Sales Charge (TSC), which they described as “a tax imposed on passengers for no services rendered to passengers.”

The AON argued that the charge is entirely different from payments for regulatory services and maintained that several airlines already operate dedicated accounts from which the NCAA draws its monthly remittances.

The association, however, noted that worsening financial pressures, driven by the rising cost of Jet A1 aviation fuel and global economic shocks linked to the Iran-Israel/USA conflict, have strained airline operations.

The operators disclosed that they had earlier appealed to the Federal Government through the Minister of Aviation and Aerospace Development for a temporary suspension of statutory charges to help airlines manage cash flow challenges.

“As an interim response, President Bola Ahmed Tinubu graciously granted a 30 per cent concession, while waiting for the government’s decision on the other aspects of the AON intervention request,” the statement said.

The airlines further called for an urgent amendment to the Civil Aviation Act to empower the NCAA to collect its charges directly from passengers rather than through domestic carriers.

“This will relieve domestic airlines of the financial burden of acting as collection agents for the NCAA, since airlines currently bear banking transfer charges and other transaction costs in the process of transmitting funds to the NCAA,” AON stated.

The association also traced the origin of the five per cent Ticket Sales Charge back over 45 years, to the military administration of General Yakubu Gowon, noting that the policy was originally introduced to support airport maintenance at a time when aviation infrastructure funding was inadequate.

AON argued that, despite the creation of several aviation agencies, such as the Federal Airports Authority of Nigeria (FAAN), the Nigerian Airspace Management Agency (NAMA), and the Nigerian Meteorological Agency (NiMet), domestic airlines are still subject to multiple taxes, levies, and statutory charges.

“The financial impact of these taxes, fees, charges and levies is adverse, burdensome and excruciating,” the operators stated.

The group warned that the survival of the aviation sector now requires “urgent and deliberate policy action,” while reiterating its commitment to constructive engagement with government and stakeholders towards building a sustainable aviation industry.