Airlines Challenge 5% Ticket Charge as Aviation Unions Insist on Compliance

Aviation stakeholders pose for a photograph during the 30th Annual Conference of the League of Airport and Aviation Correspondents (LAAC) in Lagos.By Cynthia Okere, Lagos

A major disagreement over the collection and remittance of the five per cent Ticket Sales Charge and Cargo Sales Charge, TSC/CSC, has pitched Nigerian airline operators against aviation unions, bringing to the fore concerns over the financial sustainability of airlines, regulatory funding and workers’ welfare.

The disagreement played out at the 30th Annual Conference of the League of Airport and Aviation Correspondents, LAAC, held in Lagos on Thursday, where stakeholders gathered to examine how government revenue demands could be balanced with the growth and survival of Nigeria’s aviation industry.

The conference, themed “Towards a Sustainable Aviation Industry: Balancing Government Revenue Demands with Sector Growth,” brought together policymakers, regulators, airline operators, airport managers, investors, financial institutions, aviation professionals and labour unions.

The conference came amid growing concerns over the financial pressures confronting airlines, including multiple charges, high aviation fuel costs, foreign exchange constraints and the rising cost of aircraft acquisition and maintenance.

What began as a broader discussion on aviation sustainability became heated when airline operators and representatives of organised labour disagreed over the collection and remittance of the statutory five per cent TSC/CSC.

Speaking on behalf of the Airline Operators of Nigeria, AON, Executive Chairman of United Nigeria Airlines, Prof. Obiora Okonkwo, maintained that issues surrounding the recovery of outstanding TSC/CSC remittances should primarily be handled between individual airlines and the Nigerian Civil Aviation Authority, NCAA.

Okonkwo argued that airlines had been meeting their financial obligations before worsening operating conditions placed additional pressure on their finances.

He said the operators had raised concerns with the Federal Government over the weight of aviation charges and sought relief to enable domestic carriers to remain operational.

According to him, discussions subsequently took place involving the NCAA and the Ministry of Aviation and Aerospace Development on how outstanding obligations could be addressed through a structured repayment arrangement.

He maintained that the matter should therefore be resolved within the regulatory framework involving the airlines and NCAA rather than through intervention by aviation unions.

But representatives of aviation unions rejected the operators’ position, insisting that the five per cent charge is backed by law and cannot be treated as ordinary airline revenue.

Secretary-General of the Air Transport Services Senior Staff Association of Nigeria, ATSSSAN, Francis Akinjole, argued that airlines could not unilaterally decide whether to remit a statutory charge because of difficult operating conditions.

“This is an Act; it is the law. You cannot say that because things are hard for you, you will then choose which law to obey,” Akinjole said.

He maintained that any attempt to change the existing arrangement would have to follow the appropriate legal and legislative process.

The unions further argued that the charge is collected from passengers through airlines and contributes to the funding of aviation regulatory and service agencies.

They warned that delays in remitting statutory revenue could affect the ability of aviation agencies to meet their responsibilities, including obligations connected with safety oversight, infrastructure and workers’ welfare.

The exchange highlighted the growing tension between the financial pressures facing domestic airlines and the funding requirements of government aviation institutions.

LAAC seeks balance between revenue and growth

Earlier, LAAC Chairman Suleiman Idris said the central challenge facing the industry was not whether government should generate revenue from aviation, but how much financial burden the sector could reasonably carry without undermining its growth.

He said government has legitimate revenue requirements, while government-owned and regulated aviation institutions also need adequate funding to discharge their statutory responsibilities.

Idris, however, stressed that revenue generation must be balanced against the need to keep airlines and other aviation businesses viable.

He said discussions around the TSC/CSC should go beyond how revenue is shared to examine what the money ultimately delivers to the industry.

According to him, stakeholders should be asking how much of aviation revenue supports regulation, safety and security, airport infrastructure and the modernisation of air navigation systems, as well as how transparency and accountability can be strengthened in the utilisation of such funds.

The LAAC chairman also called for stronger consultation among the Nigerian Government, aviation agencies, airlines, airport operators, labour unions and investors before major fiscal or regulatory decisions affecting the sector are implemented.

He said meaningful consultation should take place before policies are finalised rather than merely informing stakeholders after decisions have been reached.

The conference marked the 30th edition of LAAC’s annual industry gathering, which has developed into a platform for discussions between government, regulators and operators on major challenges confronting Nigerian aviation.

Sustainability remains central concern

Beyond the TSC/CSC controversy, stakeholders also examined policy consistency, airport infrastructure, regulatory effectiveness, aviation fuel, access to foreign exchange and the high cost of acquiring and maintaining aircraft.

LAAC said aviation could contribute significantly more to Nigeria’s economy if government revenue policies are structured in a way that allows operators to remain competitive, attract investment and expand connectivity.

The association also acknowledged ongoing government efforts in airport infrastructure, regulatory reforms and connectivity, but maintained that more needs to be done to build a resilient aviation sector.

For airlines, the argument remains that excessive fiscal and operational burdens could weaken already stretched operators and ultimately translate into higher fares for passengers.

For labour unions and government agencies, however, statutory revenues remain critical to the effective functioning of institutions responsible for regulating and supporting the industry.

The heated debate at the LAAC conference therefore underscored the central question confronting Nigerian aviation: how to adequately fund regulation, safety and infrastructure without imposing costs that threaten the survival and growth of the airlines expected to generate much of that revenue.

A major highlight of the conference was the official launch of the LAAC Travel Watch Magazine, marking another milestone in the League’s efforts to deepen aviation and travel journalism in Nigeria.