By Opeyemi Adelakun
The Federal Government is considering a new ticket-sales arrangement that would allow domestic airlines to settle outstanding debts owed to aviation agencies through future ticket sales rather than immediate cash payments.
The proposal, developed by QuickAir Networks Limited, is aimed at addressing the mounting financial obligations of domestic carriers while reducing the pressure that outright debt repayment could place on airline operations. It was presented to officials of the Ministry of Aviation and Aerospace Development as part of the proposed National Ticket-for-Cash Aviation Revenue Recovery Programme.
Under the proposed arrangement, participating airlines would create digital wallets corresponding to the value of their agreed outstanding debts to agencies such as the Nigerian Civil Aviation Authority, the Nigerian Airspace Management Agency and the Federal Airports Authority of Nigeria.
The value would then be converted into flight-seat inventory and distributed through QuickAir’s platform to travel agencies, corporate organisations and government institutions. Revenue generated from the ticket sales would subsequently be used to offset the airlines’ outstanding obligations.
Segun Oyebolu, who led the QuickAir presentation, said the proposal was designed to provide airlines with a more flexible way of meeting their obligations at a time when rising operating costs have put significant pressure on their finances.
“In view of the cash-poor situation of these various airlines arising from higher than normal operating expenses, it is better and more reasonable and will be a very attractive option for the airlines to start paying the debts owed government via flexible seat-sale arrangement,” Oyebolu said.
He, however, warned that the arrangement would not provide a lasting solution if airlines continued to accumulate fresh debts after clearing their existing obligations.
To address this, Oyebolu proposed an automated settlement mechanism under which applicable government charges would be deducted directly as tickets are sold.
“Since about 70 percent of domestic flight tickets are sold online, QuickAir will provide an enabling settlement engine that will ensure that as customers of airlines made payments online, the five percent ticket sales charges will be automatically remitted to the designated account of the NCAA while 95 percent of the sale shall remit immediately to the airline,” he said.
According to the proposal, the automated settlement would operate within microseconds, meaning airlines would receive the bulk of their ticket revenue without significant delays.
The plan comes amid growing financial pressure on Nigeria’s domestic aviation industry. The Airline Operators of Nigeria recently called for the scrapping of the five per cent Ticket Sales Charge, describing the levy as a major burden on carriers struggling with soaring operating costs.
The proposed QuickAir platform was also demonstrated during the technical session with the ministry. The company showed its ticket distribution and settlement infrastructure, which it said could connect with Nigeria’s 14 active domestic airlines.
Its accounting system was also demonstrated, including transaction records and revenue generated through the platform.
Oyebolu said QuickAir was ready to deploy the system once airlines operating under the Airline Operators of Nigeria agreed to participate.
The ministry had earlier invited the company to submit proposals on a national ticket-for-cash aviation revenue recovery programme, following QuickAir’s submission on the initiative.
QuickAir Chairman, Suleiman Ibrahim, said the company was prepared to work with the ministry and other aviation stakeholders to resolve the recurring financial disputes between government agencies and domestic airlines.
He said the company’s objective was to “eradicate the point of financial conflicts between government and operating domestic carriers.”
If adopted, the proposal could provide the government with a continuous mechanism for recovering aviation-related debts while allowing financially constrained airlines to preserve cash for fuel, maintenance, staffing and other essential operations.
However, its implementation would depend on agreement among the Federal Government, aviation agencies and domestic carriers, particularly against the backdrop of continuing disagreements over aviation charges and the financial sustainability of airlines.
Leave a Reply