Mrs Oluwabunmi Oluwaseun Kuku, Managing Director of the Federal Airports Authority of Nigeria, FAAN
Nearly all the major airlines prospecting in the division one league of global aviation business/operation have been found embroiled in indebtedness to the Federal Airports Authority of Nigeria, FAAN.
Abridged list of the foreign airlines indebted to the nation’s airports manager are, Qatar Airways, Lufthansa, British Airways, Virgin Atlantic, KLM, EgyptAir, Ethiopian Airlines, Air France, Royal Air Maroc, Turkish Airlines and Africa World Airlines.
Mrs Olubunmi Kuku, Managing Director of the Federal Airports Authority of Nigeria, made the disclosure in Abuja before the House of Representatives Committee on Finance, Chairman by Hon James Abiodun Faleke
The Chairman of the Committee, James Faleke, who expressed wonderment at the system employed that tolerated such humongous debt said such business model was due for a thorough overhauling to reflect the 21st century smart business model.
FAAN MD, Olubunmi Kuku itemized different payment windows and their timeline to honour such obligations. She explained that airlines operating into Nigerian airports are required to settle their service charges within two weeks or fourteen 14 days after which the service was delivered.
She, however, disclosed that there were other windowa that allowed settlement of of invoice issued by airport managers between 30 (Thirty) day and there others that had a ceiling of 90 (Ninety) days for invoice settlement.had
Olubunmi Kuku however noted that some of the foreign airlines had consistently failed to pay their debts as and when due while some are currently having over one-year debt overhang on a credit window that should not be more than 90 days’ at the maximum.
Reading from her records KuKu highlighted that Qatar Airways currently owes about N1.5bn. Lufthansa’s outstanding liability she also said stands at approximately N1.5bn.
She further stated on the airlines debt portfolio that Virgin Atlantic owes about N1.35bn, while KLM, EgyptAir and Ethiopian Airlines each owe over N1bn on different service headings FAAN rendered to them.
Other airlines she listed that their debt range between N700m and N1bn include Air France, Royal Air Maroc, Turkish Airlines and Africa World Airlines.
The MD summed the entire debt portfolio of the foreign airlines to N18.98bn.
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The House of Representatives Committee Chairman on Finance, James Faleke, lamented and queried how and why the aviation credit management system had made minced meat of the sector’s credit policy when stipulated grace period for which debt was to be serviced were being undermined with ignominy.
He said this very low level of credit administration will make revenue collection burdensome and planning evasive/not reliable when accrued funds cannot be judiciously utilized since they remain only on paper and not the creditor’s bank account.
The committee further enquired why debtor airlines were allowed to continue their operations in spite of high debt volume and also having exhausted the maximum 90 days officially sanction by the global clearing house, International Air Transport Association, IATA.
The legislators demanded from the MD of FAAN the addresses of the debtor airlines’ head office in Nigeria and proper documentation of each of the airlines’ debt profile.
The committee expressed the opinion that the push has now become a shove hence, the affected operators would be invited for an explanation as to why they made billions of Naira from tickets sales to Nigerian travelers’ yet, finds it hard to pay within the stipulated timeline, the paltry levies charged for safe landing, safe keeping and parking of their aircraft at the nation’s airports.
Hon Faleke made the declaration thus: “We need every kobo that belongs to this country.”
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