NCAA says airlines’ remittance delay affecting revenue target

Sade Williams/Business a.m.

The revenue projections of Nigeria Civil Aviation Authority (NCAA) are being negatively impacted by delays and irregular remittance of five percent ticket sales charge (TSC) and cargo sales charge by domestic airlines to  the authority, thus adversely affecting the efficient delivery of its services and the maximum training and retraining of its staff.

Chris Najomo, director general, NCAA, lamenting the situation at the Aviation Finance and Revenue Assurance Summit organised by the regulatory authority, said the TSC is the major source of funding for the authority as any paucity would have a serious effect on its financial projections.

He emphasised that indigenous airline operators in most cases fail to remit agreed percentages on time to the regulatory agency, adopt manual or delayed reporting systems, while others also fail to remit the accurate ticket sales charge/cargo sales charge (TSC/CSC) to the NCAA.

This he said has adversely affected the financing and planning of the regulatory body, as the gaps in revenue generation and cost recovery make it difficult for long-term fiscal planning and urgent execution of critical programmes of the organisation.

To eliminate the obstacles that cause delays in remittances of the charges, Najomo urged Nigerian airlines to leverage technological tools like Artificial Intelligence (AI) in implementing automated systems for financial reporting, revenue tracking, accuracy and compliance in the system, saying that there is obvious lack of the required collaboration and synergy between revenue and cost recovery units of the authority and indigenous airlines.

Represented by Olufemi Odukoya, director, finance and accounts (DFA), Najomo said the wide gaps between revenue generated and actual collection by the NCAA from the airline amounted to under-optimisation.

According to him, this was mostly traceable to the poor working capital management capacity of the chief financial officers/head of accounts of the domestic airlines and their deputies on one hand, and the informational inefficiency as well as lack of cooperation and synergy on the other hand.

He expressed optimism that some of the CFOs tend not to be aware of their statutory obligations to the authority with regards to prompt remittance, credible revenue reporting and financial dealing with the NCAA in line with international best practice and global air transport and civil aviation standards.

“We do hope that the outcome of this summit will make a bold statement of intent and the starting point of an inclusive regulatory model that will drive the all-round growth and economic viability, increased safety, enhanced service delivery and exceptional passenger experience that we all crave for in the Nigerian aviation and air transportation sector,” Najomo said.

He  observed that the Nigerian economy had been through, and still grappling with a series of macroeconomic and developmental challenges, which would require a measure of disruptive innovation in approach if the country must quickly remedy the situation.

In a bid to address the situation, Najomo emphasised that President Bola Tinubu had set out the eight-point agenda for economic restoration and growth.

He maintained that this required all agencies of government to operationalise through the efficient and effective discharge of their respective constitutional mandate and responsibilities.

The director general explained that the Minister of Aviation and Aerospace Development, Festus Keyamo, has strategically posited a five-point agenda for driving the aviation sector in line with the president’s initiatives.

Michael Awa, an aviation consultant, presenting a paper on ‘Improving Operational and Regulatory Environment Through Collaboration and Synergy,’ challenged airlines’ CFOs to monitor changes in government policies and regulations in a bid to ensure their airlines are in tandem with developments in the global aviation industry.

Awa explained that changes like safety, security, and environmental regulations from organisations like International Civil Aviation Organisation (ICAO), International Air Transport Association (IATA), Airport Council International (ACI), Federal Aviation Administration (FAA) and NCAA, should continuously be monitored and updated.

He also tasked the airlines through their CFOs to ensure quick reconciliation of financial statements with the respective approved government agencies, especially the NCAA.

Awa further urged the airlines to inculcate financial transparency in their obligations and overall financial accounting.