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PSC increase, counterproductive to aviation growth


ANTHONY OMOH
For two weeks running passengers flying through Nigerian domestic terminals have been facing the horrendous situation of parting with an extra N1,000 or as the case is at the Murtala Muhammed terminal 2 (MMA), N2, 500 for what terminal operators call Passenger Service Charge (PSC)
PSC formerly known as Airport Tax is paid by departing passengers and is collected by the airlines upon purchase of tickets and is only paid to airport or terminal operator upon completion of the flight.
Passengers who do not travel on the flight for which they have purchased the tickets are eligible for full refund for the PSC.
Therefore, these passengers are advised to obtain the PSC refund from the respective airlines concerned.
However, in Nigeria present day, all the rules have been bent and abused in a bid for terminal operators to generate more revenue for themselves thereby causing many outbursts at the terminals over extra cash being paid and also hindering facilitation by collecting by hand.
Due to the simple reason that the Nigerian aviation industry is a debt ridden one with airlines, terminal operators and other service providers owing each other, the trust to allow airlines collect the PSC on the terminal operators behalf have been killed due to fear of non-remittance.
Worse still if you do not travel as is practiced in other countries, there is no guarantee that your full passenger fare will be refunded to you because of the greed of terminal operators who want to generate revenue by every means including by cheating the passenger.
Last week, Minister of Aviation, Princess Stella Adaeze Oduah ordered Bi-Courtney Ltd, operators of the MMA2 to reverse to the former charge of N1, 000 even after the former claimed to have permission from the ministry to hike the PSC.
The Minister’s through a directive contained in a letter addressed to the Managing Director of the company and signed on her behalf by the Permanent Secretary in the Ministry, Ms Anne N. Ene-Ita noted that:
“The Federal Ministry of Aviation has not given any approval to Bi-Courtney Ltd to charge the sum of N2, 500 (two thousand five hundred naira) as Passenger Service Charge (PSC).
Continuing, the letter declared that “…There is a procedure in the Concession Agreement which must be adhered to and until then, you are to desist from the collection of the Passenger Service Charge (PSC)”.
The terminal operator refused and still went about flaunting the directive, under the guise that they had not got any letter from the Minister and only read the directive on her face book page.
Head of Communications, BASL, Dipo Kehinde said, “We have not received the Minister’s letter. We’ve only seen the message on her facebook page. But, I can confirm to you that we have the approval. We have copies of the approval (For the collection of increased PSC) with the Ministry and FAAN.
This made the Nigerian Civil Aviation Authority, (NCAA) call Bi-Courtney to its office for a meeting to set them straight and ensure strict compliance to the directive last Friday.
This however was not to be as the management of BASL, Daily Champion gathered alleged to be stuck in traffic and deftly avoided the meeting, while still collecting the same PSC from passengers at the MMA2 terminal.
Earlier when the issue of increment of the PSC came up, the company’s chief operations officer, Femi Kolawole explained that the company had obtained approval from the various authorities to charge $15 and N650 per ticket since December 22, 2006.
“The PSC is utilised by terminal operators to maintain the terminal. Since it opened in 2007, the annual cost of running the terminal has been increasing phenomenally and is reflective of the economic situation in the country,” he stated.
Kolawole noted that recently, the Federal Airports Authority of Nigeria (FAAN), which operates other airports in Nigeria, actually increased its PSC by 186 per cent for all air tickets in the country irrespective of the location or state of the various airports.
“The increase proposed by BASL represents a 150 per cent increase from the current N1, 000 per ticket. BASL has held meetings with the airlines and other stakeholders to sensitise them of this development while it continues to provide the most consistent services within Nigerian airports,” said Kolawole.
Issues
The cause of all these problems may be unconnected to the fact that when they started operations, FAAN was collecting N350 PSC while Bi-Courtney which prides itself as a world standard terminal was collecting N1,000 then a month ago the airport authority jacked up its PSC to 1,000.
BASL in its defence is a private terminal with near 70 per cent effectiveness in passenger handling and infrastructure.
However, FAAN on the other hand has not done anything to make its passengers feel the impact of being in an airport as the facilities which the PSC is charged for is either broken or not there in the first place.
So an increase in FAAN’ s PSC according to member of think tank group, Aviation Round Table (ART) and the convener of Congress of Aviation Unions Professional Association (CAUPA), Engineer Sheri Kyari was merely charging high for incompetence.
He said the airport authority was selling old and expired services for jacked up prices, stating that air passengers are not happy with paying for FAANs incompetence and that the extra charge will drive them to the roads.
Kyari said,” Well the information that FAAN has increased their PSC, I think that it is not a thoughtful decision at all in view of what is happening in the aviation industry. Number one; there is no visible improvement in any of their facility that the passengers are using today. It’s like you are giving someone the same menu and he is paying higher for it for no reason. “
“So if there was any visible improvement let’s assume conveyor belts that are getting bad now and then to enhance faster delivery of passenger luggage after disembarking from the aircraft one can say okay but nothing tangible that one can say is the reason for the increase.”
However, having said all that BASL would not have arbitrarily increased PSC because it was not theirs to increase without approval.
However, in the happenstance that BASL is right and someone in the ministry greedily gave them permission to increase the charges and they produce the document, it would also go to mean that as always that the greed in the ministry has once again short-changed the country and the people.
Recall BASL is presently in legal squabbles with FAAN over the tenure that they would operate the terminal before they hand it over and all these problems are as a result of shabbily concocted agreements where FAAN just signs things and realise too late that it is to their disadvantage.
Another issue and probably one which importance cannot be undermined is that of the passengers who if they refuse to fly all the PSCs, tickets, new aircraft, hi-tech terminal will amount to naught.
It is no secret that air travel in Nigeria is decreasing amidst fuel crisis that has caused fares to increase monumentally, already they pay close to N30,000 some N32,000 for domestic flights between Lagos and Abuja, now with a scenario like this what passenger will be proud to use the airports.
Long and short of the matter is that if the players do not sit down and re-strategise on how to get these passengers who are leaving due to the cost of air travel, none of it all will matter as the airports will be used to rear goats and cows.
Already a huge number of travellers have taken to the roads and the Director General of the Nigerian Civil Aviation Authority (NCAA), Dr. Harold Demuren is not pleased with this as he is at the forefront canvassing to make air travel compete with the road.
He always surmises,” We want to compete with the roads and the only way to do that is to match them by fares, already we are the fastest and safest means to get to where they are going and most people with goods know this and want to fly us but they say our fares are too high.”
However, with this admission and with the hikes in charges here and there adding more burdens on the passengers will Dr. Demuren see his life time dream of competition between road and air?
Engineer Kyari, in his take said that it could work and the air could compete with roads in the foreseeable future but right now, “Passengers have been groaning and I can assure you that a sizeable number of passengers have departed from air travel in view of the increase in cost as a result of fuel increase. So it is so sad at the moment for anybody to come on board and burden passengers with these extra charges again.”
He further argued that the money from PSC was pittance compared to what they can be getting from other areas especially their concessionaires calling on FAAN/Bi-Courtney to look at the long term effect of the increment as it would affect passengers and cargo who are the reason for the air travel in the first place.

About anthony omoh

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I am a Journalist with a passion for developmental stories and nigerianflightdeck.com was born out of passion for reporting the travel, business and aviation sub-sector. This site is an expression of my ideals and creativity as a reporter and my discretion as a publisher. I am extremely content doing this and I am sure when you read my stories you'd understand that I touch people and that's why

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