Abolish 5% ticket sales charge, Nigerian airlines urge National Assembly

The Airline Operators of Nigeria (AON) has formally requested the National Assembly to abolish the contentious five percent Ticket Sales Charge (TSC). The association argues that this levy has become an unsustainable financial burden on domestic airlines and advocates for its replacement with a flat-rate system, akin to the Passenger Service Charge collected by the Federal Airports Authority of Nigeria (FAAN).

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The 5% service charge has outlived its usefulness. It has become a burden on domestic airlines.

Roland Iyayi, representing the AON, stated at a public hearing that the existing percentage-based charge is outdated and no longer aligns with the current realities of the aviation industry. He emphasized that the 5% charge has outlived its usefulness and is hindering airline operations. The AON has submitted a proposal suggesting a fixed charge structure, similar to FAAN's model, to ensure a more equitable playing field for all carriers.

Iyayi highlighted the severe financial strain on airlines, noting that soaring aviation fuel prices, which now constitute 40% of operating costs, have made it difficult to remit the TSC to the Nigerian Civil Aviation Authority (NCAA) since March. Global fuel prices have increased by 60-80%, while Nigerian airlines face an approximate 270% hike, pushing operators to the brink.

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Rather than charging a percentage, we recommend adopting a structure similar to the one FAAN uses for the passenger service charge, because that creates a level playing field.

Furthermore, the AON accused the NCAA of collecting various aviation-related charges without delivering the necessary infrastructure to enhance airline operations. The association pointed out that despite collecting substantial fees for services like telecommunications mast applications, essential navigational charts remain unavailable, limiting aircraft utilization across the country.

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Since March, domestic airlines have not been able to pay the 5 per cent to the NCAA. We have managed to remit only because domestic airlines are now taking on charter flights rather than continuing scheduled flights. Essentially, ticket revenue is now going straight into fuel costs. Fuel accounts for 40 per cent of an airline’s operating costs.