NCAA,NAMA&FAAN Groaning Under N32 billion Debts By Airlines

*Continuous Maintenance of Facilities,Training May Suffer Setback

*Safety of Airspace At Risk

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By Lateef Lawal

Airlines,Oil Marketers, Ground Handling Companies and Government Agencies are indebted to aviation service providers and the regulator, a jumbo sum of N32.4 billion as at April 30 this year.

At the time of filing this report, sources close to all the service providers and the Nigerian Civil Aviation Authority(NCAA) indicated that the total indebtedness, if not redeem within the shortest possible time, could cripple their ability for provision of services and its attendant negative impact on the safety of the country's air space.

If this is allowed to happen due to lack of adequate finance for the continued maintenance and upgrading of infrastructural facilities , safety and navigational  aids, Nigeria risk losing the Category 1 FAA Safety Status.

Just two days ago, the Minister of Aviation,Princess Stella Ada Oduah warned debtor airlines of the dire consequences of witholding the payment of their bills , giving them 30 days within which to enter into an agreement on the settlement of their debts or risk being grounded.

Investigations by the NigerianAviationNews indicated that out of the three major agencies, the one that is hardest hit is the Federal Airports Authoriyu of Nigeria(FAAN) that is being owed N22.96 billion which included $1,389,897,629.60 out of the total of N32.4 as at April 2011.

The debts arose from non payment of rents by airlines,retail shop owners at various terminals, duty free shops,handling, oil and gas  and other allied services.

Princess Stella Ada Oduah

Top on the list of the debtors is Arik Airline whose debt profile in FAAN records indicate that it is owing N1,965,475,207.64 from its operations in and out of the Murtala Mohammed International Airport,Ikeja,Lagos and N797,435,128.34 at the GeneralAviation Terminal(GAT),Ikeja,Lagos totaling N2.762 billion.

Next in the long list of the debtors is the British carrier-Virgin Atlantic which owed FAAN N618.66million, Nigerian Aviation Handling Company(NAHCO) N239.612million ,Oil&Gas companies N232.82million,Banking/Financial Services N44.8million,Duty Free shops N24.2milliom,Aerocontractors N241.8million,Nigerian AirForce N17million,Associated Airlines N41.8million,Chanchangi Airlines N393.56million ,IRS Airlines N206.21million,Overland N12.62million,Air Nigeria N253.66million,Ethihad N7.2million and Dana Air N124.55million.

Other debtors include 86 dormant airlines which are indebted to FAAN to the tune of N440.326million which are unlikely to be recovered while various government agencies totaling 31 owed N651.568million and dormant concessionaires N191.476million.

The Nigerian Civil Aviation Authority(NCAA) out of the aforementioned total indebtedness by various indusrty clients is owed a total of N5.363billion with Arik Air also on top of the debtors list with a bill of N2.428billion.

Other debtors on NCAA lists include-Aerocontractors N698.042million, Associated Airlines N26.9million, Chanchangi Airlines N383.8million, Dana Airlines N487.6million, IRS N648million, Overland N11.5million           and Bristow N4.38million.

Majority of the debts owed NCAA arose from the 5% Ticket Sales Tax  already embedded in the air fares of passengers and 5% Cargo Sales Tax and are expected to be paid to the government cover through the regulatory agency.

However for over 5 years majority of the airlines have continued to hold on to the money and refused to remit the money to the Authority despite entering into a gentleman agreement last year with the foer Aviation Minister to spread the payment of their old debts across 36 months.

Investigations revealed that majority of the airlines reneged on the gentleman agreement while an insignificant few paid a token only once or twice and suspended further payment while a notable airline even paid in a 'dud' which was eventually returned.

As for the Nigerian Airspace Management Agency(NAMA), the total indebtedness to it by 19 domestic airlines as at April 30 this year stood at N4.056billion for En-route and Terminal Navigational Charges.

Again leading the hoard of debtors is Arik Air with a debt profile of N1.107billion followed by Chanchangi Airlines N862.6million, Aerocontractors N731.334millionIRS N343.6million, Air Nigeria N228.3million,  Dana Air N125.2million, AssociatedAirlines N91.04million, Bristow Helicopters N68.984million and Overland N45.2million.

It will be recalled that in the first quarter of last year, the management of NAMA introduced 'pay-as you-go' to stem the tide of high indebtedness by airlines while it opted for dialogue on the outstanding debts with the aim of assisting the airlines to agree on instalmental payments spread across 36months in line with the truce entered into between the aviation agencies, the airline and the then Minister of Aviation.

It is also on record that some of the airline became recalcitrant in their approach to settle their outstanding debts as they rebuffed several reconciliation meetings called by the management.

The NCAA ,due to the unco-operative attitude of the airlines to settle their debts also had to resort to a third party arrangement through some banks to collect from source the current 5% Ticket Sales Tax as well as 5% Cargo Tax.