The International Civil Aviation Organisation’s (ICAO) Doc 9082 ensures fair and transparent funding for air navigation services. It mandates that charges must reflect the actual cost of services without burdening users excessively.
The “Policies on Charges for Air Navigation Services” outline guidelines for determining, allocating, and collecting charges. Last month, the Nigerian Airspace Management Agency (NAMA) proposed an 800% increase in navigation charges, last reviewed in 2008.
This increase was set to take effect on September 1, after a stakeholders’ meeting discussed new en-route and terminal navigation rates.
The proposed charges would rise from 2,000 and 6,000 Naira to 18,000 and 104,000 Naira per flight. Additionally, the cost of extending service hours would increase from 50,000 to 450,000 Naira. This change would help the agency recover the costs of diesel and other logistics.
Managing Director Engineer Ahmed Farouk highlighted that NAMA has been charging as low as NGN11,000 per flight when a one-way domestic ticket cost only NGN16,000. While ticket prices today have risen to as high as NGN150,000–NGN200,000 for a one-way economy ticket due to prevailing economic circumstances, NAMA’s navigational charges have remained the same since June 2008. However, days after the announcement, Aviation Minister Festus Keyamo suspended the planned increment, citing the economic challenges currently faced by Nigerians.
While speaking to NigerianFLIGHTDECK, a source confirmed that the ANSP’s needs align with ICAO Doc 9082 and that their requirements are crucial. He argued that NAMA needs funding for air navigation services as it has facilities nationwide in need of maintenance and even security from vandals.
Revenue Allocation Challenges
Despite the suspension, NAMA still faces significant revenue allocation challenges. The agency struggles to upgrade, maintain, or even power navigation facilities nationwide. Its ability to provide a safe airspace is further hampered by its 50% remittance to the federation account.
Over time, the agency has requested the removal of the 50% revenue deduction, arguing it hinders operational efficiency. Reversing this revenue cut is crucial for enhancing infrastructure and improving operational efficiency across NAMA’s air navigation services. Without adequate funding, NAMA cannot meet the high costs of procuring and maintaining essential equipment required for safe airspace management. Continuous training of technical staff, vital for maintaining safety standards, is jeopardized by insufficient funds within the agency’s budget.
The agency also receives 22% of the 5% Ticket and Cargo Sales Charge (TSC/CSC). However, it seeks an upward review, emphasizing that maintaining costly navigational facilities nationwide and embarking on needed upgrades requires substantial funds. This deduction from revenue affects both the airspace and the agency’s ability to plan effectively.
For example, due to Nigeria’s general power malaise, NAMA has spent significant amounts on diesel to keep the airspace operational. The agency is on the verge of completing solar installations to reduce these costs. These too require funding.
Cost-Recovery System
According to ICAO’s Doc 9082, charges should reflect the total costs of air navigation services, including capital and depreciation. Maintenance, operation, and administration costs should also be reflected in the charges to ensure accurate cost recovery. These costs should be based on facilities and services under ICAO’s Regional Air Navigation Plan guidelines. Charges should not include additional or unnecessary expenditures beyond what is required for air navigation services.
The policy emphasizes a cost-recovery system, which includes principles like Full Cost Allocation, Relevant Costs, and Revenue Generation. ICAO’s guidelines define the cost basis to include all relevant expenses, such as capital, depreciation, maintenance, and operational costs.
Moreover, the policy requires separating costs for different phases of aircraft operations, such as en-route, approach, and aerodrome services, along with supporting services like meteorological services. It allows the inclusion of costs for aviation-specific security but excludes general national security costs.
Regarding revenue generation, ICAO’s Doc 9082 states that air navigation services should ideally generate enough revenue to cover costs and provide a return on assets for future investments. Additionally, the policy allows States to include costs related to safety, security, and economic oversight at their discretion.
