Ticket fare for local and international travellers may increase as the Nigerian Airspace Management Agency (NAMA), on Friday, announced the increment in its navigational charges by 800 per cent.
LEADERSHIP Weekend had reported Tuesday, that the Airline Operators of Nigeria (AON), had raised the alarm that multiple taxation and forex instability had driven the cost of operation up.
Speaking, the spokesman of AON, Prof. Obiora Okonkwo, said, due to these factors, the price of local airline tickets will continue to rise across the country.
Okonkwo argued that airlines operating in Nigeria are overburdened by multiple taxation, saying the forex regime of about N1,605.00 to one dollar, is impacting negatively on local airlines.
However, speaking at the 2024 edition of the League of Airports and Aviation Correspondent (LAAC), seminar, titled, ‘Aviation Survivability amidst a Challenging Macro-Economic Environment,’ held in Lagos, on Friday, the managing director of NAMA, Engr. Umar Ahmed Farouk, said the increment was to improve infrastructure and service delivery in the industry.
According to him, the agency had increased en-route navigation charges from N6,000 to N18,000 and N54,000 per flight just as the airspace agency equally increased the extension of hours of service to airlines from N50,000 to N450,000 per extension.
Justifying the increment, Farouk said, it was to enable the agency to recover the cost of diesel and other logistics during the period of extension.
He noted that the industry requires very efficient pricing of products and services, stressing that it is critical for enhancing affordability, driving competition, supporting infrastructural development, promoting sustainability, and improving operational efficiency.
The NAMA boss further argued that the price for services must reflect the value of these services.
He said: “NAMA relies on statutory fees for the management of the airspace (remember that aviation takes place only in the air). These funds are generated from services we provide to the flying community, without these funds NAMA can’t discharge its responsibility of ensuring the safety of our airspace effectively. We majorly generate these funds through the airline companies.
“The largest percentage of NAMA’s revenue comes from en-route navigation charges (domestic and international flights) and terminal navigation charges (domestic and international flights). While international flights pay in US dollars, domestic flights pay in the Nigerian currency.
“As a service provider and under ICAO best practices, NAMA does not make a profit. ICAO Doc 9082 recommends cost recovery for service provision to cater for the cost of equipment, personnel, training and other ancillary costs. This is what NAMA tries to do.
Farouk further disclosed that for 2023, NAMA had an expenditure of about N21 billion in personnel costs alone, spent over N12 billion on capital costs and over N10 billion in overhead costs, adding that all these were to be (and were) funded from fees (no FGN budgetary allocation).
NAMA, he reiterated, had been charging as low N11,000 per flight when a one-way domestic ticket cost only N16,000. He said, while ticket prices today have gone up astronomically to as high as between N150,000 to N200,000 for a one-way economy ticket owing to the prevailing economic circumstances, NAMA navigational charges have remained the same since June 2008.
Currently, “our unit rate for international flights charged for service provision is about $70, domestic flights are charged 6,000 Naira. While NAMA recognises the difficult economic environment aviation operates in Nigeria, it is equally a part of the ecosystem. It goes to the same market to procure equipment and other services like training. If NAMA is to survive and continue to guarantee safety and efficiency in the airspace, it must breathe.
“Even though most costs in the economy have increased by more than 1,000%, NAMA has proposed to increase its fees by 800%. The new rates for en-route and terminal navigation charges are to be reviewed from 2,000 and 6,000 Naira to N18,000 and N54,000 per flight. Also, the extension of hours of service is to be reviewed from N50,000 to N450,000 per extension to enable the agency to recover the cost of diesel and other logistics during the period of extension,” he pointed out.
Reeling out its efforts on infrastructure, the NAMA MD said, his agency had invested heavily in training programmes to equip its personnel with the latest skills and knowledge, stressing that its training initiatives have ensured that its workforce remains proficient and adaptable to technological advancements.
“We have strengthened our relationships with airlines, regulatory bodies, and international partners. Collaborative efforts have led to improved air traffic management and better service delivery. However, thanks to the vigilance, diligence and dedication of LAAC members—the core aviation reporters who stand for truth and integrity—this misinformation was swiftly debunked,” he stated.
