Nigeria vows to get tough on aviation sector debt
The Nigerian federal government plans to clamp down on debtors in the aviation sector following outstanding accumulated debt of NGN37 billion naira (USD91 million) in service charges, according to Aviation Minister, Hadi Sirika.
During a weekly ministerial briefing on June 8, Sirika named Arik Air (W3, Lagos) and Lagos Terminal Two (MMA2) operator Bi-Courtney Aviation Services Limited (BASL) as the worst debtors, each allegedly owing about NGN14 billion (USD34 million) in outstanding service fees to state-owned aviation agencies. Arik Air was not immediately available for comment.
Referring to BASL, he said: “They have not paid a single dime since they started to run that terminal building and we have not ceased giving them electricity, water, fire cover, and so forth. They haven’t paid a dime for 13 years. But this is killing our services too. We will go after that money. We will not allow this infrastructure to become dilapidated,” Sirika said, as reported by Channels Television.
The Minister in November 2020 had reported that local airlines’ total debt burden to regulatory agencies stood at NGN22 billion (USD53.5 million). A breakdown showed that NGN19.37 billion (USD47 million) was owed in unremitted passenger ticket sales charges and (NGN2.7 billion (USD6.5 million) in cargo sales charges collected on behalf of the Nigeria Civil Aviation Authority (NCAA) and the Federal Airports Authority of Nigeria (FAAN), reported The Guardian from Lagos.
Sirika said Nigerian President Muhammadu Buhari had turned down calls from service providers for the debts to be subtracted from the state’s COVID-19 support to the sector.
In reaction, BASL spokesperson, Mikail Mumuni, denied the company owed any money to FAAN. “On the contrary, it is FAAN that owes Bi-Courtney over NGN200 billion (USD487 million) by depriving it of its legitimate earnings over the past 14 years,” he said. The dispute revolves around the state-funded FAAN operating the General Aviation Terminal (GAT) at Lagos Airport in competition with MMA2 in what BASL alleges is a breach of the concession agreement.
“BASL, in line with the dispute resolution process contained in the agreement, has (received) an arbitration award in its favour. It also got the judgement of a High Court, six Court of Appeal judgements and a Supreme Court judgement, all in its favour and sustained the monetary award,” he said.
He added that “the NGN14 billion debt mentioned by the Minister is totally inconsistent with the demand by FAAN. Their last demand was about NGN1 billion (USD2.4 million), which was promptly responded to by BASL stating categorically that there was no such debt.”
“We believe the Minister was not properly briefed by FAAN as we also pay our electricity bills as and when due. We equally provide elaborate security at the terminal, which has continued to attract commendation from stakeholders,” he said.
Meanwhile, Sirika has instructed airlines to refund tickets in full if flights are delayed by more than two hours.
In case of domestic flights delayed by more than one hour, airlines should provide notification of the delay, refreshment, one phone call, SMS, or e-mail. When delayed for more than two hours, airlines should reimburse passengers in full. In cases of delays between 2200L (2100Z) and 0400L (0300Z), carriers should provide hotel accommodation, refreshments, meals, two free phone calls, SMSes, and emails, and transport to-and-from the airport, he said.