The managing director of the Federal Airports Authority of Nigeria (FAAN), Capt. Rabiu Hamisu Yadudu has disclaimed allegation by the Airline Operators of Nigeria (AON) and some other investors in the aviation industry that its charges are nebulous.
Speaking at the public hearing on the amendment of the Civil Aviation Bills of the six aviation agencies held in Abuja, the managing director told the national assembly that the recently increased passenger service charge (PSC) was not done arbitrarily as claimed by some operators.
Yadudu who was reacting to allegations of high-handedness regarding charges levelled against FAAN by the chairman of Overland Airways, Capt. Edward Boyo and the AON said the agency took its time, got all the buy-ins of stakeholders including the airlines and did everything under the regulatory guidance of the Nigerian Civil Aviation Authority (NCAA).
Boyo had alleged that airlines were dying because of the unfriendly aviation environment rife with charges some of which, especially the PSC.
He stated 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.
Boyo asked for most of the charges including corporate interest tax, educational tax, Federal Inland Revenue Service (FIRS) tax, local government charges, PSC, TSC/CSC which he said were close to thirty-five to be abolished as his airline has survived this far because of his business model.
Yadudu said FAAN does not and will never increase charges arbitrarily stressing that PSC was discussed for months and that the NCAA, as regulator of the industry, was involved from the outset
He stated that 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.
Similarly, counsel for the AON, Mrs. Chinasa Unaegbunam said there were charges from access fees to premium and possessing fee.
She said such unclear charges would add to the cost of flying hence making it difficult for more people to fly.
Responding, Yadudu said: “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.”
In his contribution, the minister of aviation, Mr. Hadi Sirika told the committee that some of the charges imposed are not from aviation agencies but are captured in the statute.
He said it will tantamount to a crime to violate the constitution stressing that in as much as he agreed that the imposition of some of the taxes is not right, “there is little that can be done except from the constitution.”
He reminded the AON that he was instrumental to the exemption of the AON from excise duties on the importation of spares parts.
He also said he played a key role to get the VAT removed even when aviation is still seen as being elitist.
