The controversy over the sharing formula for Nigeria’s five per cent Ticket Sales Charge (TSC) has deepened, with the Nigeria Civil Aviation Authority (NCAA) chapter of the National Association of Air Traffic Engineers (NAAE) openly distancing itself from the position of the association’s national leadership.
The development has exposed growing divisions within the aviation union over a proposal seeking to review the existing distribution of TSC revenue among the country’s major aviation agencies.
The national leadership of NAAE had called on the National Assembly to review the statutory revenue-sharing formula, arguing that the current arrangement no longer adequately reflects the operational responsibilities, financial pressures and funding requirements of the Nigerian Airspace Management Agency (NAMA).
Under the proposal put forward by the national body, the NCAA’s allocation would be reduced from 56 per cent to 40 per cent, while NAMA’s share would increase from 22 per cent to 40 per cent.
The proposal has, however, triggered opposition from the NCAA chapter of the association, which said it was neither consulted nor carried along before the position was made public.
Existing TSC sharing formula
The five per cent Ticket Sales Charge is collected from passengers travelling on commercial flights in Nigeria and distributed among several aviation agencies to enable them fund their statutory responsibilities.
Under the existing arrangement, the revenue is shared as follows:
- NCAA – 56 per cent
- NAMA – 22 per cent
- Nigerian Meteorological Agency (NiMet) – 9 per cent
- Nigerian College of Aviation Technology (NCAT) – 7 per cent
- Nigerian Safety Investigation Bureau (NSIB) – 6 per cent
The current arrangement has increasingly become a subject of debate among aviation stakeholders, particularly against the backdrop of rising operational costs, infrastructure requirements and the need to maintain international safety standards.
NAAE’s national leadership argued that NAMA, which provides critical air navigation services across the country, requires a larger share of the revenue to effectively discharge its responsibilities.
However, the NCAA chapter of the association has challenged that position, insisting that the authority also faces significant financial demands that cannot be overlooked.
NCAA engineers reject national position
In a communique issued in Lagos, the NCAA chapter of NAAE formally dissociated itself from the proposal put forward by the national leadership.
The communique, signed by the chapter chairman, Fredrick Agunloye, stated that members of the NCAA chapter were not consulted before the national position was adopted and released.
“We therefore dissociate ourselves from the publication and respectfully state that it should not be interpreted as the collective position of all NAAE members across the aviation industry,” Agunloye stated.
The chapter stressed that a matter as important as the financing of Nigeria’s aviation sector required broad-based consultation involving members working across the various agencies.
According to the engineers, decisions on the TSC sharing formula should be based on evidence, the statutory responsibilities of each agency and the potential impact of any proposed adjustment on aviation safety and operational efficiency.
‘Every agency plays a complementary role’
The NCAA chapter explained that the Ticket Sales Charge was established as a statutory levy collected from passengers and distributed among aviation agencies because each institution performs a distinct but complementary role in maintaining a safe, secure and efficient aviation system.
“The sharing formula exists because every agency performs a distinct, but complementary role in maintaining a safe, secure and efficient aviation system,” the chapter said.
It argued that reducing the NCAA’s allocation without adequately considering its regulatory responsibilities could have serious consequences for aviation safety oversight.
The chapter noted that, unlike service providers such as NAMA, the NCAA does not operate airports or provide air navigation services and has limited opportunities to generate substantial commercial revenue.
As a result, it said, the authority depends significantly on its statutory allocation to finance its regulatory functions.
Why NCAA says its allocation is critical
According to the engineers, the NCAA’s share of the TSC is used to fund several critical regulatory activities across the aviation industry.
These include the certification and licensing of airlines, airports, maintenance organisations, air navigation service providers and aviation training institutions.
The funds also support safety surveillance, consumer protection, accident prevention initiatives, enforcement of aviation regulations and other regulatory responsibilities.
The chapter warned that a substantial reduction in the authority’s allocation could place additional pressure on its ability to carry out these responsibilities effectively.
It specifically expressed concern that reduced funding could affect the frequency and quality of safety inspections and surveillance operations, delay certification and licensing processes and weaken the training and requalification of aviation safety inspectors.
The engineers also warned that inadequate funding could limit the procurement and maintenance of critical oversight equipment and potentially affect Nigeria’s ability to maintain full compliance with the standards and recommended practices of the International Civil Aviation Organisation (ICAO).
NAMA funding concerns acknowledged
The NCAA chapter acknowledged that NAMA and other aviation agencies also face significant funding challenges.
It recognised the critical role played by NAMA in managing Nigeria’s airspace and providing air navigation services to airlines and other users of the country’s aviation system.
However, the engineers argued that improving the financial position of one agency should not be achieved by weakening another institution whose functions are equally critical to the safety and efficiency of the industry.
They therefore called for the development of sustainable funding mechanisms that would address the financial challenges confronting all aviation agencies.
According to the chapter, the focus should be on expanding the overall funding available to the aviation sector rather than creating a situation in which agencies compete for a limited pool of resources.
Call for wider consultation
The NCAA chapter further urged the leadership of NAAE and other aviation stakeholders to embrace wider consultation before taking public positions on issues with major implications for the industry.
It argued that members working within different agencies possess valuable operational knowledge that should be considered when developing policies affecting aviation financing and administration.
“The NCAA Chapter of NAAE therefore calls on all stakeholders, including the leadership of our association, to embrace wider consultation, constructive dialogue and evidence-based engagement before adopting public positions on matters of national aviation policy,” the communique stated.
The disagreement has now added a new dimension to the ongoing debate over the most appropriate way to fund Nigeria’s aviation agencies.
While NAMA’s need for increased funding remains a major concern, the NCAA engineers insist that any review of the TSC formula must also take into account the authority’s extensive regulatory and safety responsibilities.
Implications for the aviation sector
The dispute comes at a time when Nigeria’s aviation sector is facing increasing demands for improved infrastructure, stronger safety oversight, modern navigation systems and better passenger services.
Stakeholders are therefore expected to closely monitor discussions between the aviation agencies, unions and the National Assembly over the proposed review of the TSC formula.
A major challenge for policymakers will be finding a balance that provides NAMA with sufficient resources to maintain and modernise air navigation infrastructure while ensuring that the NCAA remains adequately funded to perform its regulatory and safety oversight functions.
As the debate continues, the latest position from the NCAA chapter of NAAE underscores the need for greater consultation and transparency in decisions concerning the distribution of aviation revenues.
The outcome of the controversy could ultimately shape the funding structure of Nigeria’s aviation agencies and determine how effectively they are able to discharge their respective responsibilities in maintaining the safety, security and efficiency of the country’s air transport system.