Airline operators fault 5% TSC, advocate direct NCAA passenger billing framework

The Airline Operators of Nigeria (AON) has strongly criticised the continued imposition of the 5 per cent Ticket Service Charge (TSC) on domestic airlines, describing the levy as outdated, burdensome, and inconsistent with global aviation best practices.

The association also called on the Federal Government to urgently amend the Civil Aviation Act to empower the Nigeria Civil Aviation Authority (NCAA) to collect its statutory charges directly from passengers and other end-users, rather than through domestic airlines acting as collection agents.

The operators said the request had become necessary in view of the worsening financial pressures confronting domestic carriers, particularly following the persistent rise in the cost of Jet-A1 aviation fuel and other operational expenses.

The operators made the requests on Monday in an official statement made available to the Nigerian Tribune, stressing that reports credited to the NCAA, which portrayed member airlines as being indebted to the regulatory agency for services rendered, were misleading and worrisome.

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AON insisted in the statement 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.

“For clarity, the NCAA issues an invoice for every regulatory service it provides, whether for the validation of crew operating licences, aircraft inspections, documentation renewals, or any other service within its regulatory mandate. Operators are then required to settle all such invoices in advance, and compliance is strictly observed before the NCAA renders any regulatory service,” AON stated.

The body further stated that, in practice, no domestic airline in Nigeria receives NCAA regulatory services without first making full payment of invoices issued by the NCAA. It said this long-standing policy and procedure remains firmly in place and that suggestions that domestic airline operators are indebted to the NCAA for regulatory services are factually inaccurate.

“What the NCAA refers to as ‘outstanding charges’ relates solely to the five per cent (5%) Ticket Sales Charge (TSC), a tax imposed by the NCAA on passengers for no services rendered to passengers and not in consonance with the dictates of international aviation. This is entirely different from regulatory service fees.

“The AON also notes that several member airlines maintain dedicated accounts from which the NCAA draws down its monthly remittances, until the force majeure caused by the Iran-Israel/USA conflict, which has put significant financial pressure on airlines worldwide.”

“Notwithstanding this arrangement, the AON had formally appealed to the Federal Government through the office of the Honourable Minister of Aviation and Aerospace Development to suspend the payment of all statutory charges temporarily as an interim measure to assist airlines in managing their cash flow during the current period of severe financial stress caused by the increase in the cost of Jet-A1.

“As an interim response, President Bola Ahmed Tinubu graciously granted a 30 per cent concession while awaiting the government’s decision on the other aspects of the AON intervention request. While the AON acknowledges and appreciates this gesture, we had appealed for a meeting with Mr President to discuss further reliefs, a request that is yet to be granted.”

The AON also maintained that the NCAA is a regulatory body, not a revenue-generating agency, and therefore does not fund any aspect of airline operations or render any direct service to passengers.

“Each and every service it provides to airline operators is fully paid for in advance before such service is rendered.

“In view of the above, the AON calls on the Federal Government to urgently amend the Civil Aviation Act to empower the NCAA to collect whatever appropriate fees and charges are due to it directly from passengers or any other relevant party, without routing such collections through domestic airlines. We request this to take effect from June 1, 2026,” the body emphasised.