Delayed and irregular remittance of five percent ticket sales charge and cargo sales charge by domestic airlines to the Nigeria Civil Aviation Authority (NCAA) impairs the efficient delivery of services and maximum training and retraining of the staff of the Authority due to paucity of funds, as these are the major source of funding of the agency.
This was disclosed on Wednesday in Lagos, by the Director General of NCAA, Captain Chris Najomo, at the Aviation Finance and Revenue Assurance Summit, organisedby the regulatory authority.
The Director General 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) etc 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, Najomourged Nigerian airlines to leverage technology tools like Artificial Intelligence (AI) in implementing automated systems for financial reporting, revenue tracking, accuracy and compliance in the system, saying that that there is obvious lack of the required collaboration and synergy between revenue and cost recovery units of the authority and indigenous airlines.
Najomo, who was represented at the occasion by Mr. Olufemi Odukoya, the Director, Finance and Accounts (DFA), NCAA said the wide gaps between revenue generated and actual collection by the NCAA from the airline was tantamount to under-optimisation.
According to him, this was mostly traceable to the poor working capital management capacity of the Chief Financial Officers (CFOs)/Head of Accounts of the domestic airlines and their deputies on one hand and the informational inefficiency as well as lack of co-operation 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.
He added: “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 passengers experience that we all crave for in the Nigerian aviation and air transportation sector.”
Najomo 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 operationalisethrough 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.
An aviation consultant, Dr. Michael Awa, in his presentation titled, ‘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.
