The Managing Director of the Federal Airports Authority of Nigeria (FAAN), Captain Rabiu Hamisu Yadudu has argued that the charges to airlines and other investors are very clear and the agency has always been open to investors, airline operators about it.
This is just as he said that the recently increased Passenger Service Charge (PSC) was not done arbitrarily as is the claim of certain airline operators, stating that the airports managers took their time, got all the buy-ins of stakeholders including airlines and did everything under the regulatory guidance of the Nigerian Civil Aviation Authority (NCAA).
Captain Yadudu made this known at the third day of the three-day Public Hearing on the amendment of the Civil Aviation Amendment Bills of the six aviation agencies in Abuja, while reacting to allegations of high-handedness by Captain Edward Boyo as regards charge impositions.
Captain Boyo had alleged that airlines were dying because of the unfriendly aviation environment rife with charges some of which (especially the PSC) they were ‘railroaded’ into by FAAN.
However, Captain Yadudu berated the position of Boyo on the PSC, stating that FAAN does not and will never increase charges arbitrarily. He said the PSC being talked about as discussed for months with the NCAA involved every step of the way as regulator.
Yadudu was surprised that the Overland boss could come out and make allegations about arbitrariness stating that the 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.
On charges which the AON lawyer described as nebulous and thought were continuous 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.
Boyo in his submissions had explained 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 amongst others.
He warned that if some of the charges were not abolished or amended, more airlines in the industry would close shop soon.
Captain Boyo asked for most of the charges including Corporate interest tax, educational tax, Federal Inland Revenue Service Tax, local government charges, PSC, TSC/CSC which he said were close to thirty-five (35) to be abolished as his airline has survived this far because of his business model.
Buttressing his point further, AON through its lawyer, Mrs. Chinasa Unaegbunam from Stream Sowers & Kohn further went on to say there were charges from Access fees, to premium and possessing fee stating that they were unclear charges and would add to the cost of flying hence making it difficult for more people to fly.
The Minister of Aviation, Senator Hadi Sirika who spoke on the charges explained to the Senate Committee that some of the charges imposed were not even from aviation agencies and was captured in the constitution of the country.
He said that it will be tantamount to a crime to violate the constitution but that in as much as he agrees that the imposition of some of the taxes on the sector is not right, there is little that can be done except from the constitution.
He reminded the AON on how he marched them to the Ministry of finance to get them exemption from excise duties on the importation of spares parts and how he played a key role to get the Value Added Tax (VAT) removed but that aviation was still being seen as elitist.