NCAA, Airline Operators Clash Over 5% Ticket Sales Charge and Unpaid Debts

The Nigerian Civil Aviation Authority (NCAA) and the Airline Operators of Nigeria (AON) are locked in a dispute over the remittance of the five per cent Ticket Sales Charge (TSC), with the regulator threatening to halt services to 11 domestic airlines and the operators pushing back, describing the levy as outdated and unfairly burdensome.

The NCAA recently directed its directorates to suspend services to the affected carriers over unpaid TSC obligations, vowing to pursue structured engagements with each airline to recover the funds while ensuring sector stability.

But the AON has rejected suggestions that its members are indebted for regulatory services, insisting that all NCAA services are paid for upfront on a cash-before-service basis. The umbrella body argued that the disputed charges relate exclusively to the five per cent TSC, a passenger tax it claims is not aligned with international aviation practice.

The NCAA maintains that the five per cent Ticket and Cargo Sales Charge is a statutory requirement under the Civil Aviation Act, embedded in the cost of air travel and cargo services.

In its response, the AON called on the Federal Government to urgently amend the Civil Aviation Act to empower the NCAA to collect the charge directly from passengers from June 1, 2026, rather than routing it through domestic airlines. The body said this would relieve carriers of the financial burden of acting as collection agents, including banking transfer charges and other transaction costs.

The AON stressed that the NCAA is a regulator, not a revenue-generating agency, and does not fund airline operations or provide direct services to passengers. It noted that several member airlines maintain dedicated accounts from which the NCAA draws monthly remittances, an arrangement that was disrupted by financial pressures following the Iran-Israel/US conflict.

The association disclosed that it had formally appealed to the Federal Government through the Minister of Aviation and Aerospace Development for a temporary suspension of all statutory charges to help airlines cope with severe cash flow strains caused by rising jet fuel costs. In response, President Bola Tinubu granted a 30 per cent concession, a gesture the AON acknowledged while noting that a requested meeting with the President for further reliefs is yet to be granted.

Providing historical context, the AON said the five per cent TSC was introduced over 45 years ago under the Gowon administration by the then Federal Civil Aviation Authority (FCAA) to fund maintenance of newly built airports in all 12 states. At the time, only foreign carriers were required to pay the levy; the then-national carrier, Nigeria Airways, was exempt.

The AON argued that the FCAA has since evolved into multiple agencies: NCAA, FAAN, NAMA, and NiMet; each with its own set of taxes, fees, charges, and levies. It accused the NCAA of subsequently embedding the TSC into legislation despite strong opposition from industry stakeholders.

“Domestic airlines, in addition to this five per cent TSC, still pay separately and directly for services provided by the various industry agencies, including the NCAA itself,” the AON stated.

It further noted that the TSC is an ad valorem tax applied to airlines’ gross earnings rather than profits, at a time when global aviation profit margins range between 1.5 and 2.5 per cent. The association described the cumulative weight of multiple levies as “adverse, burdensome and excruciating,” and called for urgent and deliberate policy action to safeguard the survival of the sector.

“The AON remains committed to constructive engagement with the government and all stakeholders to achieve a growth-oriented sector, designed to enable the accelerated growth of key sectors of the economy,” the body said.