Flying Debtors
With over N1.75billion owed parastatals, several domestic airlines in Nigeria may be in for a rough time if plans to sanction them is approved by the Aviation Ministry

By George Umunnakwe

For domestic airlines in the country, the recent jerk-up of airfares may be a decision wrongly implemented. For while they revel in the euphoria of the successful fare increase, parastatals in the aviation industry are reportedly finalising plans to impose sanctions on some of them who are neck-deep in debts.
The reason for this line of action, operatives say, is hinged on the fact that several airlines have failed to remit over N750million being proceeds from the five per cent Ticket Sales Tax, otherwise called TST, as at May 5, 2006. The proceeds are usually shared between the Nigeria Civil Aviation Authority (NCAA), the Nigerian Airspace Management Agency (NAMA), and the Nigerian Meteorological Agency (NIMET).
This, however, is not the only issue threatening the smooth operations of the more than 21 domestic airlines in the country, as the Federal Airports Authority of Nigeria (FAAN), has also threatened to blacklist some of them for allegedly defaulting in payments totaling over N1.1billion.
Twenty domestic airlines, including Virgin Nigeria, are said to be owing a total sum of N755,502, 059.84 to the aviation agencies. The debt which is said to be crippling the operations of the agencies was accumulated between January and mid-May, 2006.
This, evidently, has led to moves by a particular agency in the sector to appeal to the International Air Transport Association (IATA), to collect the alleged proceeds on its behalf. Officials of the agency which is saddled with the responsibility of policing the nation’s airspace told The Source that the huge debt profile is already slowing down their activities.
Notably, the airlines, according to The Source’s findings, had been given a grace period of 30 days to remit the TST proceeds, but surprisingly none has taken advantage of the olive branch extended to them.
Top on the list of the defaulting airlines are Bellview which is said to owe about N188.4million, Aero Contractors (N101.7million); IRS (N82.8million); and Chanchangi (N79.9million).
Others are ADC Airlines (67.4million); Virgin Nigeria (N62.2million); Albarka (N55.1million); Sosoliso (N25.4million); Trans Sahara (17.9million); and Capital (16.8million). Also on the debtor list are Space World (N14.8million); Kings Airlines (1.53million); and Overland (12.45million).
Meanwhile, FAAN has concluded plans to recover about one billion naira owed it by debtors consisting mainly of foreign and domestic airlines. The development is coming ahead of an audit exercise expected to be conducted on the agency by the International Civil Aviation organisation (ICAO) in November, 2006.
Scaling through the ICAO test would confirm the credibility of the nation’s aviation industry, while failure would automatically lead to the country being blacklisted.
FAAN, investigations reveal, has held discussions with airline operators on how to reconcile their debt records before the end of May, 2006. At the meeting held in the conference room of the authority, an agreement was reportedly reached with some of the debtors on a fresh repayment schedule.
“Of course, for some debts that are high, we plan to sit down with individual airlines to agree on the mode of payment, because we do not want to disrupt their operations. We believe they too are going through rough times, but then, there is this general consensus between us and them and that is what is good about all these,” an official close to the management of the authority said.
The Source was further made to understand that already a debtor-list has been compiled and sent to the Ministry of Aviation, for possible direct deduction of these debts from source.
The debt were accumulated by the airlines through their use of various services provided by the authority at the 22 airports across the country. The services reportedly enjoyed but not paid for include landing and parking rents, electricity consumption and the five per cent passenger service charge collected on behalf of FAAN by each operator.
The inability to pay these charges has continued to erode the financial profile of the agency.
In March 2006, the authority, through its’ former managing director, Olanrewaju Shittu, an engineer, made frantic efforts to recover the huge debt– without much success.