Air travellers in Nigeria may experience another sudden increase in ticket prices as the Nigerian Airspace Management Agency (NAMA) has raised en-route navigational charges from N6,000 to N18,000 and N54,000 per flight. Also, the airspace agency equally increased the extension of hours of service to airlines from N50,000 to 450,000 per extension to enable it recover the cost of diesel and other logistics during the period of extension. The Managing Director of NAMA, Engr. Umar Ahmed Farouk, disclosed this on Friday at the League of Airports and Aviation Correspondent (LAAC) seminar themed: “Aviation Survivability amidst a Challenging Macro-Economic Environment,” held in Lagos.
Recall that NAMA and the Nigerian Civil Aviation Author- ity (NCAA) in January held a strategic meeting with some airline operators under the aegis of Airline Operators of Ni- geria (AON) to review what has been described as the outdated N16,000 Terminal Enroute Navigational Charges (TNS). The meeting held in Abuja was called at the instance of the NCAA and NAMA to get the understanding of the airlines on the review of the rate, which the airlines admitted needed to be reviewed.
The implication of the action, which NAMA took to cushion its high cost of airspace surveil- lance and security, could further lead to astronomical increases in domestic airfares and by extension fares on international routes. Farouk noted that the indus- try required very efficient pricing of products and services, stressing that it was a critical lever for enhancing affordability, driving competition, supporting infrastructural development, promoting sustainability, and improving operational efficiency.
He however noted that the price for services must reflect the value of these services. He said: “The Nigerian Air- space Management Agency relies on statutory charges 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 this fund NAMA can’t discharge its responsibility of ensuring the safety of our airspace ef- fectively. 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 naviga- tion charges (domestic and international flights). While international flights pay in US dollars, domestic flights pay in the Nigerian currency. “As a service provider and per ICAO best practices, NAMA does not make a profit. ICAO Doc 9082 recommends cost re- covery 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 expen- diture of about N21 billion in personnel costs alone, over N12 billion in 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 as N11,000 per flight when a one-way domestic ticket cost only N16,000. He said while ticket prices to- day 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 had 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 rec- ognizes the difficult economic environment aviation operates in Nigeria, it is equally a part of the ecosystem. It goes to the same market to procure equip- ment and other services like training. If NAMA is to survive and continue to guarantee safe- ty and efficiency in the airspace, it must breathe.”
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