Reps order FAAN to recover N18.9bn debt from foreign airlines

By Gift ChapiOdekina, Abuja

The House of Representatives Committee on Finance on Tuesday directed the Federal Airports Authority of Nigeria (FAAN) to recover over N18.9 billion owed by foreign airlines operating in the country within two weeks.

Chairman of the committee, Hon. James Abiodun Faleke, issued the directive when FAAN officials, led by the Managing Director, Mrs. Olubunmi Kuku, appeared before the panel during its ongoing revenue monitoring exercise at the National Assembly.

Lawmakers expressed concern over what they described as the growing debt profile of several international airlines operating in Nigeria, warning that the development could undermine government revenue.

Faleke said it was unacceptable that foreign airlines continue to accumulate debts for airport services despite existing payment timelines.

Earlier in her presentation, FAAN Managing Director, Kuku, told the committee that airlines are expected to settle service charges within two weeks.
She, however, noted that several operators have exceeded the payment window, with some debts stretching beyond 30 days, 90 days, and in certain cases more than one year.

Kuku presented a breakdown of the outstanding liabilities, listing several foreign airlines indebted to FAAN.
Among those listed were Qatar Airways, Lufthansa, British Airways, Virgin Atlantic, KLM, EgyptAir, Ethiopian Airlines, Air France, Royal Air Maroc, Turkish Airlines, and Africa World Airlines.

According to her, the figures represent service charges collected through the settlement platform of the International Air Transport Association (IATA).
She explained that the debt profile is dynamic because airline liabilities operate as “rolling balances,” meaning new charges can accumulate while previous debts are gradually being settled.

Providing further details, Kuku disclosed that Qatar Airways currently owes about N1.5 billion, while Lufthansa’s outstanding debt stands at approximately N1.5 billion.

She added that Virgin Atlantic owes about N1.35 billion, while KLM, EgyptAir and Ethiopian Airlines each owe over N1 billion in varying categories of current and outstanding payments.

Other airlines, including Air France, Royal Air Maroc, Turkish Airlines and Africa World Airlines, owe between N700 million and N1 billion.
The FAAN boss told lawmakers that the total outstanding liabilities currently stand at N18.98 billion.

However, members of the committee questioned why airlines were allowed to accumulate such liabilities despite the two-week payment window.
One lawmaker asked FAAN why defaulting airlines were not sanctioned or grounded from operating at Nigerian airports.

“Why would you allow an airline to owe beyond the two weeks allowed?” the lawmaker queried.

The committee also demanded to know whether airlines that settle payments after the deadline are required to pay interest, warning that continued delays could amount to negligence.

Lawmakers further expressed concern that some airlines continue to operate despite carrying debts beyond 90 days or even one year, stressing that such practices weaken revenue enforcement.
Responding, Kuku explained that international airline payments are processed through a global clearing system managed by IATA, which sometimes introduces settlement delays.

She said the arrangement allows airlines to make payments through a centralised financial platform used worldwide for aviation ticketing and settlement.

According to her, FAAN monitors the ageing of debts and begins stricter engagement once liabilities exceed 30 days, while debts above 90 days attract stronger enforcement measures.

She also disclosed that FAAN has, in some instances, grounded airlines that failed to meet payment obligations, particularly among domestic carriers that do not operate under the same global credit structures as international airlines.

Despite the explanation, lawmakers insisted that stronger enforcement mechanisms must be implemented to prevent the accumulation of large debts.

The committee subsequently directed FAAN to provide detailed documentation and addresses of all airlines listed as debtors, noting that the operators may be invited to appear before the House to explain the outstanding liabilities if the debts are not cleared within the stipulated timeframe.

Faleke emphasised that Nigeria must recover all revenues owed to the government.

“We need every kobo that belongs to this country,” he said, warning that airlines found violating financial obligations would be held accountable.