Airlines risk disruptions as NCAA enforces debt sanctions

The Nigeria Civil Aviation Authority has placed 11 domestic airlines on its updated “No-Pay-No-Service” list over unpaid statutory charges.

The enforcement action, which targets airlines owing the regulator outstanding remittances, is expected to affect access to critical regulatory and administrative services until the affected carriers clear their debts or agree on payment plans with the authority.

This was contained in an internal memo obtained by our correspondent on Sunday. At the centre of the dispute are the five per cent Ticket Sales Charge and Cargo Sales Charge, funds collected by airlines on behalf of the NCAA to support safety oversight, personnel training, and economic regulation within the aviation sector.

The memo, dated May 22, 2026, obtained by our correspondent, directed all NCAA directorates to withhold services from the affected operators pending financial clearance from the Directorate of Finance and Accounts.

The memo, signed by the Director of Finance and Accounts, Olufemi Odukoya, was circulated across the authority’s regional offices and copied to the Director-General of Civil Aviation and other senior officials.

Under the directive, affected airlines risk immediate interruptions in regulatory support, a development that has raised concerns among operators and passengers over possible operational delays and wider industry implications.

Director-General of the NCAA, Chris Najomo, said that although the regulator understands the harsh economic realities confronting operators, the agency cannot afford to compromise its financial stability.

According to him, delayed or non-remittance of the statutory charges could weaken the authority’s ability to sustain effective safety oversight, risk-based surveillance, and compliance with international aviation standards.

Airlines affected by the directive include Air Peace Limited, Ibom Air Limited, Arik Air Limited, United Nigeria Airlines, Umza Air, NG Eagle, Max Air Limited, Caverton Helicopters, Overland Airways, Rano Air, and ValueJet.

The document stated, “The DGCA has directed that no directorate should render any service to the above airline without financial clearance from the director of finance and accounts.”

In a WhatsApp chat with our correspondent, the Chief Executive Officer of Ibom Air, George Uriesi, said the current realities facing airlines go beyond poor financial management, insisting that operators are struggling to survive under an unsustainable business environment.

According to him, the sharp rise in aviation fuel prices over a short period disrupted the financial structures of many airlines and forced operators to make difficult decisions about how to manage limited working capital.

He explained that airlines could not increase ticket fares at the same pace as the rise in fuel and maintenance costs, adding that most of their daily earnings are now consumed by operational expenses needed to keep aircraft in the air.

His words, “People, this matter is quite simple. When fuel, which under normal circumstances is 36-40 per cent of your operating costs, triples in price within the space of five weeks and stays there, your business model is turned upside down.

“The costs of purchasing fuel to keep flying suddenly take virtually all the sales you’re making on a daily basis. This forces a change in how you allocate your working capital. Once you cannot pay for fuel and maintenance, you cannot fly, no matter your emotions. And once you cannot fly, you cannot pay anybody anyway. It’s the oxygen mask theory,” Uriesi added.

The Ibom Air boss added that the NCAA’s memo revealed that most domestic airlines are facing similar financial pressures, contrary to public perception that some operators were coping better than others.

He stated that the airlines should not be criticised, stressing that the sector only appears attractive because operators continue to fly despite mounting losses and shrinking profit margins.

Also, the former Rector of the Nigeria College of Aviation Technology, Samuel Caulcrick, questioned the long-term viability of Nigeria’s domestic aviation sector, saying the crisis extends beyond the controversy surrounding the 5 per cent Ticket Sales Charge.

According to him, even if the charge is removed completely, airlines would still face severe challenges linked to inflation, foreign exchange instability, weak passenger numbers, and multiple regulatory charges.

He noted that only a small percentage of Nigerians travel regularly by air, while inflation and declining purchasing power have further reduced passenger traffic, forcing over 10 airlines to compete for a shrinking market.

Caulcrick also argued that domestic airlines remain vulnerable because they rely heavily on dollar-denominated expenses such as aircraft leasing, maintenance, and spare parts, without stable access to foreign exchange or hedging mechanisms.

The industry expert stressed, “The question is no longer whether airlines can survive the TSC. It’s whether the environment itself allows any airline to survive.

“Aviation fuel, landing, and parking fees consume the bulk of revenue. On some routes, airlines are left with net profits as low as N8 per passenger per kilometre. At that level, a single delay or cancellation can erase the margin for an entire flight.”