NCAA and AON Clash Over Remittance of Five Per Cent Ticket Sales Charge

The Nigeria 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with the regulator threatening to suspend services to 11 domestic carriers and the operators insisting the levy is outdated and unfairly burdensome.

In a recent circular, the NCAA directed its directorates to withhold services from indebted airlines until they clear outstanding obligations, vowing to pursue structured engagements with each carrier to recover the funds while maintaining sector stability.

But the AON has pushed back, arguing that the charge referred to as “outstanding” relates solely to the five per cent TSC, a passenger tax it claims is inconsistent with international aviation standards. The umbrella body maintains that domestic airlines do not owe the NCAA for regulatory services, as every service is fully paid for in advance on a cash-before-service basis.

“No domestic airline in Nigeria receives NCAA regulatory services without first making the full payment of invoices issued to it by the NCAA,” the AON stated, dismissing suggestions of indebtedness for regulatory services as factually inaccurate.

To resolve the impasse, the AON is calling on the Federal Government to urgently amend the Civil Aviation Act to empower the NCAA to collect all appropriate fees directly from passengers or other payers, bypassing the airlines entirely. The proposed change would take effect from June 1, 2026, and relieve carriers of the financial and administrative burden of acting as collection agents, a role that currently forces them to bear banking transfer charges and other transaction costs.

The AON further revealed that several member airlines maintain dedicated accounts from which the NCAA draws monthly remittances, an arrangement disrupted by the severe financial pressures triggered by the Iran-Israel/US conflict and the soaring cost of jet fuel. The association had formally appealed to the government through the Minister of Aviation and Aerospace Development for a temporary suspension of all statutory charges to ease cash flow challenges. In response, President Bola Tinubu granted a 30 per cent concession, which the AON acknowledged with appreciation, while noting that a requested follow-up meeting with the President is yet to be granted.

Providing historical context, the AON traced the five per cent TSC to its introduction over 45 years ago under the General Gowon administration, when the then Federal Civil Aviation Authority (FCAA), an arm of the Civil Aviation Department, needed funds to maintain airports built across the 12 states. At the time, Nigeria Airways, the sole domestic carrier, was exempted; only foreign airlines paid the levy.

The AON explained that the FCAA has since evolved into multiple agencies, NCAA, the Nigerian Airspace Management Agency (NAMA), the Federal Airports Authority of Nigeria (FAAN), and the Nigerian Meteorological Agency (NIMET), each imposing separate taxes, fees, charges, and levies on domestic operators. The five per cent TSC, originally a policy instrument, was later embedded in legislation by the NCAA despite strong opposition from the AON and other industry stakeholders, the operators said.

The association stressed that the TSC is an ad valorem tax levied on an airline’s gross earnings, not its profits, in a global industry where profit margins range between 1.5 and 2.5 per cent at best. “International standard and best practice provides that aviation should be a cost-recovery sector of strategic importance. In Nigeria, however, the industry is being subjected to unsustainable financial pressures, in the guise of imposed taxes, fees, charges and levies,” the AON stated.

It added that domestic carriers separately pay for services rendered by NAMA, FAAN, and other statutory bodies, making the cumulative financial impact “adverse, burdensome and excruciating,” especially at a time of exogenous shocks from global conflicts.

The AON reiterated its commitment to constructive engagement with the government and all stakeholders, calling for urgent and deliberate policy action to secure the survival of the aviation sector, which it described as a crucial catalyst for economic growth.