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Business News of Tuesday, 30 August 2022


Nigeria threatens to shut down domestic airlines over debt, gives 30-day deadline

The Nigerian government has threatened to shut down domestic airlines over multibillion naira debt authorities said the airlines owe.

The civil aviation regulator said airlines owed the government N19 billion and $7.6 million, and have refused to pay despite receiving the money from customers. The Nigerian Civil Aviation Authority said airlines have instead launched a “campaign of calumny and falsehoods” against it.

“The airlines must enter an MoU on how they will pay their debts in the next 30 days from August 30th, 2022 or their license will be suspended at the expiration of the deadline,” NCAA Director General Musa Nuhu said Tuesday in Abuja at a meeting with representatives of the local carriers.

He said, “This situation is crippling finances and pitching the Authority against the Federal Government as a government-owned revenue-generating agency, following the dire financial position of the Federal Government.”

Airline Operators of Nigeria (AON), an umbrella body for all the airlines operating in Nigeria, had accused the NCAA of imposing multiple charges on its members.

The AON in a letter addressed to the Minister of Finance, Zainab Ahmed, said the charges, alongside scarcity of foreign exchange and aviation fuel scarcity, are choking the airlines.

Miffed by the tone of the complaint, Mr Nuhu said the accusations by the airlines were “unfair, unfounded and smacked of blackmail.”

He said all airlines are indebted to the NCAA, the Federal Airports Authority of Nigeria (FAAN), the Nigerian Airspace Management Agency (NAMA).

Mr Nuhu said that the NCAA charges the airlines cost recovery charges as the bulk of its revenue comes from statutory charges on air tickets. He said while customers pay the money, airlines continue to fail to remit them.

Also, he said the AON accusations were untrue as a comparison of charges between Nigeria and Ghana shows that Ghana charges over 100 per cent higher in most of the charges.

“The NCAA will also review its charges higher as the Authority hasn’t reviewed charges in about 13 years in spite of rising cost of service provision, “ Mr Nuhu added.

He explained that the aviation agencies are just as challenged as the airlines because they also rely on forex to train and procure critical equipment the airline needs to operate safely.

He said NAMA is also being owed over N5 billion and FAAN is also being owed over N19 billion by the same airlines.

Skye Jet Chief Executive Officer, Kashim Shettima, said the NCAA is also not “perfect”, and issues raised could be resolved amicably.

He suggested that the NCAA DG should have engaged the AON privately to resolve the issues because if the AON also begins to speak, it will amount to “washing their dirty linen in public.”

“Yes, airlines owe money but the airlines are also deeply challenged because they can’t get fuel or access dollars freely. They buy dollars in the black-market. We must come together to resolve our problems,” he said.