TO say the three day public hearing on the amendment of six (6) executive bills of aviation agencies hosted by the Senate Committee on Aviation is anything short of interesting would be the understatement of all time.
Views and counter views with divergent ideas filled the air as law makers, the regulator, investors and stakeholders gathered to amend Acts establishing the Nigeria Civil Aviation Authority ( NCAA), Federal Airports Authority of Nigeria ( FAAN), Nigerian Airspace Management Agency ( NAMA), Nigerian College of Aviation Technology ( NCAT), Accident Investigation Bureau (AIB) and Nigeria Meteorological Agency (NiMET) Read also: Nil corporate governance, high maintenance; others: reasons for Nigerian airlines failure
The three day public hearing was declared open in Abuja by Senate President, Sen. Ahmad Lawan who said that the issues in the bills were sufficient enough to ensure safe travel and enhance security in the Nigerian aviation industry.
Represented at the occasion by Sen. Robert Boroface, Deputy Senate Leader, Lawan regretted that the Nigerian aviation industry was heavily impacted by the Covid-19 pandemic, stressing that going forward, aviation agencies needed to be creative and project ways of moving forward in case of either natural disasters or pandemic.
According to the gathering, one of the key reasons for repelling and enacting Bills in the aviation agencies was to ensure that the misconception that Nigeria has more than one regulator in the industry is jettisoned by the International Civil Aviation Organisation (ICAO) and other international bodies and agencies.
Another is to set straight other parts of Bills establishing the Act of agencies to provide clarity and explicit wordings to certain ambiguous clauses in the Acts.
However, no sooner had the three day event started than sparks started flying with certain players seeing it an an avenue to drive a narrative and push forward various agenda.
Areas of contention ( TSC/CSC) and other charges
During the repelling of the Act establishing the Nigeria Civil Aviation Authority (NCAA) to take corrective actions to ensure that only the NCAA alone exercises the regulatory functions with regards civil aviation in the country, certain controversies cropped up that needed to be decisively dealt with before it festered.
First, the Airline Operators through their legal representation, Mrs Chinasa Unaegbunam from Stream Sowers & Kohn charged the Senate to repeal Clause 23 of the Civil Aviation Act asking for the reduction of the 5% TSC/CSC.
She also said the body were pushing to be made members of the Board of Directors of the aviation agencies with reason that it will provide the entire board insight as to what domestic airlines go through.
However, Minister of Aviation, Senator Hadi Sirika who was at the event raised a point of order stating that the airlines the airlines were asking for a reduction of monies they were not paying but bring collected from travelling passengers.
He revealed a staggering US$6, 993, 284 million and N19, 365, 374,336 billion debt which accrued as non remittance of Ticket Sales Charge (TSC) and (CSC) collected on behalf of the Nigeria Civil Aviation Authority (NCAA) by same airlines.
This debate with the TSC/ CSC went on the entire three days, with veteran aviator Captain Edward Boyo continuously harping on the payment collected on behalf of the NCAA as a charge to the airlines.
Captain Boyo regretted that the unfavorable operating environment had led to death of over 100 airlines and loss of jobs for qualified personnel in the sector explaining that no fewer than 35 charges are imposed on the airlines by various government agencies even outside the industry.
According to him, the airlines are charged Ticket Sales Charge (TSA), Cargo Sales Charge (CSC), Value Added Tax (VAT), N2, 000 Airport Tax, Landing fee, Parking fee, Navigation fee, Terminal charges, Security taxes, Fuel surcharges, Handling charges, Corporate income tax, and fuel tax among others.
He warned that if some of the charges were not abolished or amended, more airlines in the industry would close shop soon.
He said: ”Airlines in Nigeria are victims of the environment created by laws. Some of the laws were promulgated possibly when we were comfortable doing so. We must look at a way of bringing down costs to the airlines. Our airlines are suffering today.
”Why are airlines dying in Nigeria? Over 100 airlines have come and gone in Nigeria in the past 20 years. What are the efficiencies of these agencies? Are the airlines to pay for the inefficiencies of these agencies? Very soon, there may not be any airline again in Nigeria.
”Sir Richard Branson of Virgin Nigeria came into Nigeria aviation industry a few years ago. He was successful everywhere, but failed in Nigeria.”
Apart from canvassing the removal of TSC/CSC, Boyo also canvassed for abolition of navigation charges for domestic airline operators, but said terminal charges could be remained.
However, he was soon reminded by the Director General of the NCAA, Captain Musa Nuhu that the monies he claimed were not charges to the airlines but payment by the passengers.
Captain Nuhu revealed that as part of the review, the NCAA is proposing that non-remittance of the TSC/CSC within a given period was a criminal offense risking a two (2) year jail term.
Some operators kicked, however, Chairman West Link Airlines, Captain Ibrahim Mshelia had earlier said that it was wrong for any airline to collect monies on behalf of any government agency and refuse to remit it especially as the monies in question are already paid for.
According to him, it was bothersome that airlines would take money on behalf of government and refuse to remit it when those funds were paid for already in cash.
He explained,”I am a member of the Airline Operators of Nigeria ( AON) but I have a different opinion especially on the 5%Ticket Sales/ Cargo Sales Charges. Why would I collect money on behalf of government and not remit it, especially as I collect before the flight.
“Except it is some form of online transfer that is difficult monies can be remitted on or before 90 days, give me 90 day and I’d remit if I am owing. Some of us are remitting this 5% charges and we’ve been doing so for years.
Also speaking on the 5% TSC, former Director General of the NCAA, Dr. Harold Demuren explained the history of the charge stating that it was initiated as far back as 1989 and was done for good and specific reasons.
Dr. Demuren who maintained that the charges should not be reviewed downwards any further said it was initially canvassed for 10% when it was Federal Civil Aviation Authority ( FAA).
He said, “Federal government built all these airports and wanted return on investment and was advised by the Federal Aviation Administration ( FAA) to do what was done in America to enable them maintain these infrastructure by introducing these charges.
“The TSC was introduced because of NCAA and NAMA but now others have been added which is all good since they are aviation but I beg you, do not review the percentage shared to the NCAA downwards as these monies help in training engineers, inspectors and other critical areas,” he said.
Meanwhile, Captain Boyo equally said that FAAN charges are deterring passengers from flying saying the increase of the Passenger Service Charge which all airlines agreed to, was imposed on the airlines.
Apart from the PSC, Captain Boyo reeled out other charges including Value Added Tax (VAT), N2,000 Airport Tax, Landing fee, Parking fee, Navigation fee, Terminal charges, Security taxes, Fuel surcharges, Handling charges, Corporate income tax, and fuel tax among others.
On the Navigational charges, Managing Director of the Nigerian Airspace Management Agency (NAMA), Captain Fola Akinkuotu debunked submissions by the Overland Airways managing director stating that NAMA charges were not arbitrary and were guided by ICAO regulations.
The AON lawyer also said some of the charges like Premium, Access charges were nebulous and needed review or outright removal.
However, reacting the FAAN Managing Director, Captain Yadudu berated the position of Boyo on the TSA, stating that FAAN does not and will never increase charges arbitrarily. He said the PSC being talked about as discussed for months with the NCAA involved every step of the way as regulator.
Yadudu was surprised that the Overland boss could come out and make allegations about arbitrariness stating that the index for the increase which was done in September 2020 was to improve on facilities and service delivery and that the airlines should be concerned with areas where there are deficiencies so they can be fixed.
The PSC was last increased in 2011, nine (9) years ago.
He also corrected the misinformation on some charges stating that some of them are not imposed by FAAN but are in the constitution of the country and therefore cannot be removed by FAAN. He also said others were one off charges.
“Access is a once and for all payment an investor shall make to the authority, where is this never done in the world? Once and for all payment an investor shall pay to the authority for an approved premium. It is capital sum of money based on land price, lease tenure, capital investment, infrastructural facilities, what more amount of transparency would you want? This is a very simple and clear fact that there is nothing we are hiding.
“It is an amount investors pay before they sign a legal agreement contract because we need to protect the agency. This is a simple and clear example of the fact that look, there is nothing underneath. We take all the criticisms.Everything we are discussing here, we are taking down and everything of value we will look at it and even before the house comes up with any resolutions we on our own will look at what we will do to improve it. Not only with regards service delivery but our relationship with our clients and stakeholders.
“FAAN does not regulate but the fact we do not regulate does not mean we are not alive to our responsibilities, we have responsibilities. We must be accountable and to be accountable we have to be alive. Being alive to our responsibility does not mean we are the same as regulators, we are not.
” Despite all this, after this sessions we will go home, go through our notes and look at where we will improve. We need you; you need us.Some of you are here for your businesses but FAAN is here for 200million Nigerians.
Board of Directors
It was further agreed by the gathering that the fact there is an interim Board of Directors operational in aviation industry is an anomaly and should not be allowed to stand.
Chairman Senate Committee on Aviation, Senator Smart Adeyemi maintained that if was doing the nation a disservice to have interim boards acting in perpetuity as being practiced in Nigeria. He said it was illegal and proffered that whatever board which is interim must have a time period. It’s best to ensure there is a time period between three (3) months and six(6) months not longer. So if the tenure of a board is expiring there is provision before a new board is inaugurated.
However what was exciting to watch was the jostle by airlines, the Nigeria Immigration Service (NIS) to be put on the board of the aviation industry. The AON Lawyer who mooted the point on day one was told of the conflict of interest but continued to insist that it was the way for agencies to know what airlines were going through and get first hand information, stating that it has never been done.
Contrary though, there was a time when the airline operators had Dr, Steve Mahonwu the AON chairman as a member of Board of the AON while others too were appointed to other boards in the industry.
Firearms for Aviation Security
Another area of interest was played up with the proposal that the Federal Airports Authority of Nigeria ( FAAN), Aviation Security should bear arms
Group Captain Ojikutu who also spoke on this queried the need to arm the aviation security as is being proposed in the Bill stating they the number of armed security men at the airports were too much and already a recipe for disaster.
He said,” The number of government security agencies at he airport is much. ICAO Annex 17 provides that we should have a National Aviation Security Committee that would have all the security agencies in the committee. There are six (6) or seven(7) armed security agencies at the airport and here we are asking Aviation security to bear arms. Customs bear arm, the police bear arms, the Department of State Security ( DSS),and Nigeria immigration bear arms. If we want to have 20 agencies, they must consider one control at the airport.”
However, the minister who reacted to this said that there have been wide consultations and the Bill is not seeking for AVSEC to carry arms around the terminals.
” The reason that AVSEC which by our policy we are trying to get them to take the look, form and shape of the Transportation Safety Agency (TSA)in the United States. We are not going to welding guns in and around the airports.No, we’ve seen how this is practiced elsewhere, It’s just like telling me I should not use canine because the Nigeria police and Air Force use canines in the fact that the police have their dogs, the air force has their dogs does not limit me from having my own dogs.
“Honorable Senators, Representatives this decision is a matter of National Security. It has been run through the National Security Adviser(NSA), it has been run through State Security Services (SSS), Inspector General of Police, Attorney General are all involved and Mr. President graciously gave approval so we propose it should be left as it is within the Acy and not to be expunged.”
Review of the hearing by stakeholders
On the conduct of the public hearing, some stakeholders feel that the Senate could have done better as the representation in the committee was just the Chairman of the committee and one or two other colleagues.
This however may not be unconnected to the budget defense currently ongoing at the National Assembly as some members of the committee are also members of other committees however; stakeholders feel they could have done better.
Managing Director Centurion Security, Group Captain Ojikutu( retd) in his submissions asked if anything was being learnt by members who are supposed to be part of the committee.
He said,”What I have seen since day before yesterday is that we are talking among ourselves without the National Assembly members learning those challenges we know because when you look at the number of depth that are supposed to be in that committee,through out yesterday, it was only the chairman so how they are going to learn from the six bills that have been presented to them is going to be a big challenge.
“It’s only the chairman that you see for two days sitting. This shows they don’t have commitment to review the safety of Nigerian travellers. We are looking at the safety of over six million people, we are looking at the safety of over 26 airports, we are looking at the safety of over 4 billion international passengers and we do not have sufficient time to sit down and look at the challenges we are trying to resolve? For me I think we need to look at it seriously, a situation where you find only the chairman more or less.
“What I have seen so far, apart from senator Na Allah sitting down two days ago to make inputs, I have seen no participation from there and I am sure they can’t be less than 10 members. We are discussing 5 million regular traveller every year.
Head of Research, Zenith Travels, Olumide Ohunayo felt the senate and the house committees could have done a joint sitting as the representation on the part of the lawmakers were porous at best.
“Sincerely I am shocked that the National Assembly cannot have a joint sitting on this public hearing.The House of Representatives could have gone first but just because of the#EndSARS campaign and it was postponed but immediately the Senate jumped on it and that’s why we are having this problem moving from one hall to another.
“Again, the body language is not encouraging. Apart from the chairman who has been here all day for two days, other members are not committed to the process. They are coming and going and are not seated like what happened yesterday, only the chairman that we saw, others came in breezed in and left, this is unfair. Even gone senate president sent a representative but the committee members were not seated.
“Thank God for the participants, people came out with passion to speak and for me there is a general unity that all the agencies must have their boards functional and they must come aboard. There is also that feeling that the agencies must be protected and must not be allowed to have their accounts garnisheed.
“The hallmark of yesterday was how to share the 5% TSC/CSC of the NCAA. Nobody talked about the over bloated agencies by the politicians which are gulping these monies that should have been used capital projects, rather than be shared as salaries almost all agencies are over staffed.”
In all, the hope is that all the challenges thrown up are resolved and new ideas infused properly with the right legislative backing to ensure the Bills, when they pass will be something that will improve the aviation industry and Nigerians generally will be happy with it.