The Aviation Safety Round Table Initiative (ASRTI), d), has called for a comprehensive reform of Nigeria’s aviation regulatory fee system, proposing a shift from the current 5 per cent Ticket Sales Charge (TSC) to a flat-rate, technology-driven collection framework.
In a statement issued under ART Advisory Note 6A/26, President of the association, Air Commodore Ademola Onitiju (Rtd), said the ongoing impasse between the Nigerian Civil Aviation Authority (NCAA) and domestic carriers under the Airline Operators of Nigeria (AON) highlights deep-rooted structural flaws in the existing system.
Current Structural Challenges and Industry Position
Onitiju noted that the current ad valorem model effectively turns airlines into unpaid tax collectors, as they are compelled to absorb merchant processing costs on regulatory funds that do not belong to them.
“The commingling of regulatory charges with airline revenues at the point of sale creates significant liquidity pressures in an industry already operating on thin margins”, he stated.
According to him, these pressures—driven by high Jet A1 fuel costs, immediate maintenance obligations, and cash-before-service demands often result in the diversion of funds meant for regulatory remittance, leading to multi-billion-naira debt backlogs and persistent disputes between operators and the regulator.
He further identified manual collection processes and delayed billing as major sources of administrative friction, frequently triggering disagreements during audits.
Onitiju also raised concerns over the policy basis of the current system, arguing that the percentage-based charge violates the International Civil Aviation Organisation (ICAO) principle of cost-relatedness.
“Passengers on the same flight consume identical safety and air navigation services, yet are charged different regulatory fees based on ticket class. This effectively converts a legitimate cost-recovery mechanism into a turnover tax”, he said.
Pricing Distortions and Revenue Leakages
The ASRTI President pointed out that airlines have adapted to the current system by restructuring ticket pricing to minimise regulatory exposure.
He explained that operators often maintain artificially low base fares while introducing multiple surcharges such as fuel surcharges, currency adjustment charges, and ancillary service fees which are excluded from the 5 per cent TSC calculation.
“This practice significantly reduces the regulator’s revenue base and turns post-flight audits into complex disputes over definitions and classifications”, he noted.
Proposed Integrated Reform Framework
To resolve these systemic issues, Onitiju proposed a two-pronged reform model.
First, he recommended replacing the 5 per cent TSC with a fixed flat-rate charge per passenger denominated in naira for domestic flights and in dollar equivalents for international routes.
According to him, this approach would align with global standards, ensure fairness, and eliminate pricing distortions associated with the current percentage-based system.
Second, he advocated the deployment of an automated split-payment system at the point of ticket purchase. Under this model, regulatory charges would be deducted instantly and remitted directly into the Central Bank of Nigeria’s Treasury Single Account (TSA), while airlines receive only their operational revenue.
“This approach eliminates collection leakages, removes the burden of custody from airlines, and ensures real-time remittance of regulatory funds”, he explained.
He added that the framework would also cover all sales channels, including pre-funded digital wallets for travel agents and structured payment systems for physical ticket purchases.
Impact on Efficiency and Revenue Stability
Onitiju stated that the proposed system would significantly enhance operational efficiency across the aviation value chain.
He explained that a flat-rate fee would stabilise regulatory revenue by linking it directly to passenger traffic rather than fluctuating ticket prices, making it immune to pricing manipulation or fare restructuring.
For airlines, he said, the model would improve cash flow, eliminate administrative burdens associated with fee collection, and reduce the risk of sanctions arising from accumulated debts.
“This reform replaces a cycle of financial strain and regulatory conflict with a transparent, automated, and sustainable framework that supports both safety oversight and industry growth”, he said.
Onitiju disclosed that a comprehensive report of the Advisory has been forwarded to the appropriate government authorities for consideration.