NIGERIA’s aviation agencies and airline operators on Thursday presented competing proposals over the sharing of the statutory five per cent Ticket Sales Charge (TSC), exposing deep divisions over the funding structure of the aviation sector.
News Point Nigeria reports that the disagreement emerged during a public hearing organised by the House of Representatives Committee on Aviation on proposed amendments to the Civil Aviation Act, 2022, and the Nigerian Airspace Management Agency (NAMA) Act, with stakeholders offering differing proposals on how the existing revenue-sharing arrangement should be restructured.
The hearing attracted submissions from aviation regulators, service providers, airline operators and training institutions, all seeking changes to the current funding model for the industry.
However, the Minister of Aviation and Aerospace Development, Festus Keyamo, was absent from the hearing despite the far-reaching implications of the proposed amendments for agencies under his ministry.
Although stakeholders agreed on the need for sustainable funding for aviation institutions, they differed sharply on how the existing five per cent levy should be distributed.
The Nigerian Airspace Management Agency (NAMA) called for an increase in its allocation from 22 per cent to 56 per cent, arguing that the current sharing formula no longer reflects the enormous cost of maintaining Nigeria’s airspace infrastructure.
Presenting the agency’s position, NAMA Managing Director, Engr. Farouk Ahmed Umar, said the agency currently receives only about 1.1 per cent of every qualifying ticket or cargo sale despite bearing responsibility for air traffic management, surveillance systems, communication facilities, navigation aids and other safety-critical infrastructure.
“The amendment before you is therefore not merely about dividing revenue. It is about deciding whether the institution entrusted with guiding aircraft will have the stable resources to maintain today’s services and renew tomorrow’s infrastructure,” Umar said.
NAMA also urged the National Assembly to recognise obstacle assessment and WGS-84 aeronautical survey as chargeable technical services and permit the agency to retain 90 per cent of the associated fees.
The Nigerian Civil Aviation Authority (NCAA), however, opposed any reduction in its share of the levy, insisting that the regulator depends heavily on the Ticket Sales Charge to effectively discharge its statutory oversight responsibilities.
Director-General of Civil Aviation, Capt. Chris Najomo, said while the NCAA supports adequate funding for all aviation agencies, any redistribution of the levy must align with the standards of the International Civil Aviation Organisation (ICAO).
Najomo argued that NAMA already generates substantial commercial revenue through air navigation services, unlike the NCAA.
“We submit that NCAA’s allocation of the five per cent Ticket Sales Charge be restored to 65 per cent to overcome the deficiencies identified by ICAO at its last audit and bring Nigeria in line with global best funding practices,” he said.
He maintained that aviation safety depends not only on legislation but also on competent inspectors, effective surveillance, continuous certification, technical training, international cooperation and a financially independent regulator.
The African Aviation and Aerospace University (AAAU), Abuja, also joined the debate by seeking recognition as a statutory beneficiary of the levy.
The institution argued that, as Nigeria’s only specialised aviation university, it should receive not less than 10 per cent of the Ticket Sales Charge to support aviation manpower development, research and innovation.
Domestic airline operators, however, contended that the conversation should extend beyond merely sharing the existing five per cent levy.
Speaking on behalf of the Airline Operators of Nigeria (AON), former NAMA Managing Director and aviation expert, Capt. Roland Iyayi, described the current funding model as outdated and burdensome to domestic airlines.
“The five per cent service charge has outlived its usefulness. It has created a burden on domestic airlines,” Iyayi said.
He disclosed that the AON had submitted a comprehensive proposal for institutional reforms in the aviation sector, calling for a complete overhaul of the funding framework rather than simply reallocating the existing revenue.
According to him, domestic airlines are grappling with escalating operating costs, with aviation fuel alone accounting for about 40 per cent of their total expenses.
Iyayi explained that airlines have struggled to remit the five per cent charge because a significant portion of ticket revenue is consumed by fuel costs.
While backing NAMA’s demand for a larger share of the levy, airline operators proposed replacing the percentage-based charge with a unit charge model similar to the Passenger Service Charge collected by the Federal Airports Authority of Nigeria (FAAN).
They also advocated the establishment of an Aviation Development Fund into which all aviation revenues would be paid before being distributed transparently among the various agencies.
The operators further urged lawmakers to exempt aviation agencies from the Fiscal Responsibility Commission remittance regime, arguing that surplus revenues should remain within the aviation sector to support infrastructure development.
In addition, they recommended that obstacle clearance fees currently collected by the NCAA be transferred to NAMA, which carries out the technical assessments required for such approvals.
Declaring the hearing open on behalf of the Speaker of the House of Representatives, Abbas Tajudeen, Chairman of the House Committee on Aviation, Rep. Abdullahi Idris Garba, said the proposed amendments were designed to improve transparency, strengthen aviation institutions and enhance safety across the sector.
Garba assured stakeholders that all memoranda submitted during the hearing would receive fair consideration before the committee presents its recommendations to the House of Representatives.
The committee is expected to review the competing proposals before deciding whether to amend the existing revenue-sharing formula governing the aviation industry’s five per cent Ticket Sales Charge.