Blame Nigerian airlines’ indebtedness on laxity in the system

Recently, different aviation agencies raised the alarm on how the indebtedness of the domestic airlines to them may lead to an abrupt collapse in their systems.

Speaking on behalf of the agencies, the director general of the Nigerian Civil Aviation Authority (NCAA), Captain Musa Nuhu at a meeting held with the airlines and other stakeholders in Abuja, said out of the accumulated bills totaling over N42 billion, the airlines owed the NCAA alone N19 billion while the Federal Airports Authority of Nigeria (FAAN) and the Nigerian Airspace Management Agency (NAMA) are owed to the tune of N18 billion and N5 billion, respectively.

According to the NCAA DG “The airlines have intentionally refused to pay the debts owed us despite the fact that they have collected such from the passengers. The airlines collect money and refuse to transmute such to the right authorities. AON wants us to provide services for free for them. What the airlines are trying to do is to defunct NCAA. You have refused to give us our legitimate money. The fees we are charging the airlines are just cost recovery and we are actually subsidising the airlines.”

The NCAA DG, however gave the airlines one month ultimatum within when to sign a Memorandum of Understanding (MoU) with NCAA that would serve as the mode for payment of the debts.

In their response, the airlines kicked against been painted as fraudulent even as they traced the debts to many airlines that had folded up long time ago.

“The Airline Operators of Nigeria (AON) wishes to state its very strong reservations for such accusations and we deny very strongly that our members are defrauding or defrauded government agencies of the said amount or any amount for that matter. Airline Operations, worldwide, is not a cash and carry business. Every airline in the world owes debts which are settled as their operations go on. Nigeria is not an exception.

“It is true that some of our members have very bad debts but not all our members owe such debts. The owing of debts in itself does not amount to fraud. We frown very strongly at the criminalisation of all Nigerian airlines as a result of the said debts.

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Amidst the fireworks flying between the airlines and the agencies, one obvious fact is that there is a debt of N42 billion belonging to the federal government hanging somewhere even when the sector is short of funds.

There is no reason why the airlines will collect money meant for the agencies from passengers and still divert such funds for their use. That is tantamount to betrayal of trust.

While it is a fact that the airlines are operating under a precarious situation, that should not make them cut corners or hamper the progress of the agencies who also have their own challenges.

So, under no circumstances should the airlines deny the agencies the legitimate charges collected on their behalf from the passengers. This can only happen in Nigeria.

This forms part of the lack of coordination and the wobbling rules guiding the principles of doing business in Nigeria that give rooms to financial negligence which unfortunately, has been extended to a sensitive sector like aviation.

Again, the NCAA as the regulator on one hand, and other agencies should hold the major part of the blame for looking the other way round while the airlines pile up these debts unchecked.

The indebtedness of the airlines particularly the dead ones is a failure of the NCAA in carrying out its expected economic oversight.

For the agencies to allow the debts to accumulate to such a huge sum and to even have the temerity to add that many of the indebted airlines were no more in existence is an indictment.

Therefore, coming out now to mount pressure on the few existing airlines who have been encouraged by the laxity in the system to pay up the debts at a time when operational costs and the general ambience for business is not conducive may mean inviting safety compromise.

Obviously, the debts owed by the dead airlines should be regarded as bad debts that cannot be recovered, there is also the need for the agencies to tread softly in their quest to recoup the accumulated debts in order not to force the airlines to cut corners.

In the midst of this indebtedness saga, there is a need for the NCAA to be more up and doing in ensuring the airlines fulfill their financial obligations in the areas regarding the charges they collect from passengers on behalf of the agencies.