Nigeria’s aviation sector has witnessed escalating tensions between the NCAA and Airline Operators of Nigeria, marked by debt disputes, regulatory reversals, and criticism from operators over the regulator’s perceived revenue-driven enforcement approach, OLASUNKANMI AKINLOTAN reports

In the last couple of days, the aviation industry in Nigeria has been experiencing drama in ‘seasons and episodes’ between the regulators, the Nigeria Civil Aviation Authority, and operators under the umbrella of the Airline Operators of Nigeria.

The fragile industry may be heading into another turbulent phase as tensions deepen between the Nigeria Civil Aviation Authority and domestic airline operators over disputed statutory charges running into billions of naira.

What began as an internal regulatory directive quickly escalated into a public confrontation after the NCAA slammed 11 airlines with a controversial “No-Pay-No-Service” order over alleged unpaid remittances linked to the five per cent Ticket Sales Charge and Cargo Sales Charge.

The storm revolves around some of the country’s largest carriers, such as Air Peace, Ibom Air, Arik Air, United Nigeria Airlines, Max Air, ValueJet, among others, who have been accused by the regulator of failing to remit statutory payments.

An internal memo dated 22 May 2026 directed all NCAA departments to withhold regulatory and administrative services from the affected airlines pending financial clearance from the Directorate of Finance and Accounts.

“The DGCA has directed that no directorate should render any service to the above airline without financial clearance from the Director of Finance and Accounts,” the memo stated.

The order immediately sent shockwaves across the industry, triggering fears of disruptions in flight schedules, operational bottlenecks and fresh uncertainty for thousands of passengers relying daily on domestic air travel.

Defending the decision, Director-General of the NCAA Chris Najomo insisted the regulator could no longer ignore the non-remittance of charges critical to sustaining aviation oversight and safety functions.

According to the NCAA, the controversial five per cent Ticket Sales Charge and Cargo Sales Charge are statutory funds collected by airlines on behalf of the aviation ecosystem to support safety oversight, personnel training and economic regulation.

Industry insiders say the regulator’s position reflects growing concerns within the agency over dwindling financial liquidity and the implications for Nigeria’s compliance with international aviation standards.

Although the NCAA acknowledged the severe economic realities confronting local airlines, it maintained that delayed remittances could undermine its ability to sustain risk-based safety surveillance and meet global oversight obligations.

But barely 24 hours after issuing the hardline directive, the regulator backtracked and announced a temporary suspension of the “No-pay-No-service” order.

According to them, the sudden reversal followed intense consultations within the industry.

“This decision follows extensive consultations within the sector and a careful review of current operating realities, particularly the rising cost of aviation fuel and its impact on airline operations and overall industry stability,” the NCAA said in a follow-up statement.

The body also stressed that the suspension did not amount to debt forgiveness, stating, “It is important to state clearly that this suspension does not represent a cancellation, waiver, or forgiveness of outstanding statutory financial obligations.”

Yet, rather than calming tensions, the NCAA’s actions opened another chapter in the long-running battle between regulators and operators over the controversial Ticket Sales Charge.

Within hours, the Airline Operators of Nigeria fired back strongly, accusing the NCAA of misleading the public and attempting to regulate airlines through media pressure.

In one of its strongest statements in recent years, the umbrella body for domestic airlines declared that its members do not owe the NCAA “a dime” in regulatory service charges.

The AON aims to clarify recent media publications attributed to the NCAA, which depicted member airlines as owing the regulatory agency for services provided to operators, stating, “These publications are not only misleading but represent a worrisome and unacceptable attempt to use the media to regulate operators outside the established regulatory framework. The AON condemns such behaviour in the strongest possible terms.”

The airline operators argued that every regulatory service rendered by the NCAA, from aircraft inspections to crew licence validations and documentation renewals, is all paid for upfront before approvals are granted.

The AON stated, “For clarity, the NCAA issues an invoice for every regulatory service it provides. Operators are then required to settle all such invoices in advance.

“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.”

According to the operators, the real issue revolves around the five per cent Ticket Sales Charge, which they insist is fundamentally different from regulatory service fees.

“What the NCAA refers to as ‘outstanding charges’ relates solely to the five per cent Ticket Sales Charge, a tax imposed by the NCAA on passengers for no services rendered to passengers,” the association argued.

The disagreement once again exposed a long-standing structural problem in Nigeria’s aviation financing system, one that many industry experts say has remained unresolved for decades.

Under the current arrangement, airlines collect the Ticket Sales Charge from passengers at the point of ticket purchase and remit the funds to aviation agencies. However, operators insist the system has become increasingly unsustainable amid rising operating costs.

For domestic airlines already spending huge amounts on Jet A1 fuel, spare parts, insurance and dollar-denominated maintenance obligations, cash flow has become a daily survival battle.

AON linked the worsening crisis majorly to the recent global tensions involving Iran, Israel and the United States, which it said triggered another round of fuel price increases and economic pressure on airlines worldwide.

“The force majeure caused by the Iran-Israel/USA conflict has put a lot of financial pressures on airlines worldwide,” the group stated.

Industry operators say aviation fuel alone now accounts for nearly half of operating costs, while the huge taxes and charges, maintenance expenses and aircraft leasing obligations further compounded the travail of the airline owners. The operators are now calling for urgent policy reforms, including amendments to the Civil Aviation Act that will allow the NCAA to collect statutory charges directly from passengers instead of using airlines as collection agents.

“This will relieve domestic airlines of the financial burden of acting as collection agents for the NCAA,” AON explained.

The group also questioned the continued relevance of the Ticket Sales Charge, tracing its origins to over 45 years ago during the administration of former Head of State Yakubu Gowon.

According to AON, the charge was originally introduced when Nigeria’s aviation sector was government-controlled and airport infrastructure depended heavily on limited public funding.

But the aviation landscape has since changed dramatically.

Today airline operators have never stopped lamenting multiple taxes from agencies, including the Federal Airports Authority of Nigeria and the Nigerian Airspace Management Agency, imposed separately on them.

“The financial impact of these taxes, fees, charges and levies is adverse, burdensome and excruciating,” AON warned.

Despite the heated exchanges, stakeholders say both sides may ultimately have little choice but to negotiate.

Analysts warn that a prolonged standoff between the regulator and operators could worsen instability in an industry already battling weak infrastructure, low passenger volumes and rising operational costs.

Experts react

Also reacting to the development, industry expert Alex Nwuba described the NCAA’s action as more of a pressure tactic aimed at compelling airlines to return to the negotiation table rather than a genuine attempt to shut down operators. According to him, the inclusion of major carriers such as Air Peace and Ibom Air on the list raised serious questions about the wider implications of the directive on the credibility of the country’s aviation industry.

He stated, “It sounded like it’s just a pressure mode because clearly if the government intended to ban airlines, they have a challenge when they ban the most important and credible airlines on their list. So, if they ban those airlines, who will they leave?”

He maintained that the regulator’s primary intention may not necessarily be to cripple the aviation sector but to push operators into discussions over the lingering dispute surrounding statutory remittances and financial obligations. The aviation expert warned, however, that the move could damage public perception of the industry, especially when leading airlines widely regarded as the backbone of domestic operations are publicly listed among indebted operators.

“So, it is not the motive of the NCAA to close down the industry; rather, it may be an attempt to force them to the table to have a conversation. The implication is damning because it calls into question the veracity of the credibility of the largest and the most credible airlines. When you see the names of Air Peace and Ibom Air on that list, it is not that these are secondary industry players in the market,” he added.

Similarly, a former rector of the Nigeria College of Aviation Technology, Capt. Samuel Caulcrick, raised concerns over the long-term sustainability of Nigeria’s domestic aviation industry, noting that the challenges go beyond the dispute over the 5 per cent Ticket Sales Charge.

He said, “The question is no longer whether airlines can survive the TSC.

It’s whether the environment itself allows any airline to survive.

“Aviation fuel, landing and parking fees consume the bulk of revenue. On some routes, airlines are left with net profits as low as N8 per passenger per kilometre. At that level, a single delay or cancellation can erase the margin for an entire flight.”