The Aviation Safety Round Table Initiative (ASRTI) has proposed sweeping reforms to the collection of regulatory charges in Nigeria’s aviation industry, advocating an automated payment framework and a shift from the current percentage-based system to a fixed passenger charge in a bid to resolve longstanding disputes between the Nigerian Civil Aviation Authority (NCAA) and domestic airlines.
In a press statement entitled “ART Advisory Note 6A/26: Integrated Framework for Regulatory Fee Basis and Automated Collection,” the President of ASRTI, Air Commodore Ademola Onitiju (retd), said the recurring disagreements between the NCAA and members of the Airline Operators of Nigeria (AON) reflected deep-rooted structural weaknesses in the existing arrangement for collecting the statutory five per cent Ticket Sales Charge (TSC).
According to the aviation think tank, the present model effectively places airlines in the position of unpaid revenue collectors, requiring them to gather regulatory charges on behalf of the authority while bearing the cost of merchant processing fees associated with such transactions.
ASRTI noted that because regulatory charges are mixed with airlines’ operational revenues at the point of booking, carriers operating under severe financial pressure often find themselves using the funds to address immediate operational needs such as the purchase of Jet A1 fuel and aircraft maintenance obligations.
The organisation said this practice has created a cycle of mounting indebtedness, protracted reconciliation exercises and periodic confrontations between airlines and the regulator, sometimes resulting in threats of sanctions and disruptions to operations.
It observed that the reliance on manual filing systems and delayed billing procedures has further complicated the relationship between the NCAA and operators, leading to persistent disagreements during audits and revenue verification exercises.
The initiative also questioned the suitability of the existing ad valorem charging structure, noting that airlines have repeatedly relied on the International Civil Aviation Organisation’s (ICAO) Document 9082 to challenge the legality of a percentage-based fee.
According to ASRTI, operators maintain that safety oversight and air navigation services are consumed equally by passengers irrespective of whether they travel in economy or business class, making it difficult to justify varying regulatory charges based solely on ticket prices.
The organisation argued that the current system has increasingly been undermined by the evolution of airline pricing models.
It explained that airlines responding to rising fuel costs and foreign exchange pressures often maintain relatively low base fares while introducing additional charges in the form of fuel surcharges, currency adjustment fees and ancillary service costs covering baggage allowances, preferred seating and check-in services.
Because the five per cent Ticket Sales Charge applies only to the base fare, ASRTI said the regulator ends up collecting a fraction of the actual amount paid by passengers, thereby creating revenue leakages and opening the door to disputes over the interpretation of ticket components.
To address these concerns, the aviation body proposed a fundamental shift from the percentage-based system to a fixed charge per domestic flight segment, with a corresponding dollar-denominated charge for international operations.
It said the proposed flat-rate structure would make regulatory charges more transparent and predictable while ensuring compliance with ICAO principles relating to fairness and cost recovery.
ASRTI further recommended the introduction of an automated split-payment mechanism that would separate regulatory fees from airline revenues at the point of sale.
Under the proposed framework, once a passenger completes a booking through an airline website, mobile application or Global Distribution System (GDS), the payment gateway would instantly divide the transaction, transferring the regulatory component directly into the Federal Government’s Treasury Single Account while remitting the fare revenue to the airline.
The organisation also proposed the adoption of pre-funded digital wallets for travel agencies to guarantee the immediate deduction and remittance of regulatory charges during ticket issuance.
For cash-paying passengers at airport terminals and other physical locations, ASRTI recommended the deployment of smart kiosks and dedicated banking desks capable of collecting the fixed charge separately and generating digital confirmation tokens required for ticket processing.
According to the initiative, the integrated system would eliminate revenue leakages arising from ticket restructuring and shield regulatory income from the pricing strategies employed by airlines.
It stated that tying revenue projections to passenger volumes rather than ticket values would provide the NCAA with greater financial certainty and enable more effective planning for safety oversight, infrastructure development and other capital expenditure requirements.
ASRTI added that airlines would equally benefit from the arrangement through improved cash flow and the removal of liabilities associated with collecting and holding regulatory funds.
The organisation said carriers would no longer face the risk of accumulating huge debts or experiencing regulatory sanctions arising from unpaid charges, thereby creating a healthier operating environment for the industry.
It maintained that removing airlines from the custody chain of regulatory funds would replace a system characterised by disputes and financial vulnerabilities with an automated and transparent framework capable of supporting sustainable growth and strengthening aviation safety oversight.
ASRTI disclosed that a comprehensive report containing its recommendations would be submitted to the relevant government agencies for further consideration.
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