FG Considers Using Future Ticket Sales to Recover Airlines’ Debts

The Federal Government is considering a proposal that would allow domestic airlines to settle outstanding debts owed to aviation agencies through future ticket sales instead of immediate cash payments.

The proposal was developed by QuickAir Networks Limited under its “National Ticket-for-Cash Aviation Revenue Recovery Programme” and presented to officials of the Ministry of Aviation and Aerospace Development on July 22.

Under the proposed arrangement, airlines would create digital wallets corresponding to the value of their agreed debts to agencies including the Nigerian Civil Aviation Authority, Nigerian Airspace Management Agency and Federal Airports Authority of Nigeria.

The funds in the wallets would then be converted into 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 settle the airlines’ outstanding obligations.

Segun Oyebolu, who led the presentation, said the proposal would give airlines an alternative to immediate cash payments at a time when high operating costs were putting pressure on their finances.

He argued that a flexible seat-sale arrangement could help airlines gradually clear their debts without placing additional pressure on their cash flow.

Oyebolu, however, warned that the system would not be effective if airlines continued to accumulate fresh debts.

He proposed an automated settlement system that would deduct government charges whenever tickets are sold.

According to him, about 70 percent of domestic flight tickets are sold online, making it possible for the five percent ticket sales charge to be automatically remitted to the designated NCAA account while the remaining 95 percent goes to the airline.

He said the automated transactions would be completed within microseconds and would not cause noticeable delays in airlines receiving their funds.

QuickAir Demonstrates Ticket Settlement Platform

During the technical session, QuickAir demonstrated its existing ticket distribution and settlement platform, which it said could connect with the systems of Nigeria’s 14 active domestic airlines.

The company also showcased its accounting backend, including transaction records and revenue generated through the platform.

Oyebolu said QuickAir was ready to deploy the infrastructure once airlines under the Airline Operators of Nigeria agree to the arrangement.

QuickAir Chairman Suleiman Ibrahim said the company was prepared to work with the ministry and other aviation stakeholders to address recurring financial disputes between government agencies and domestic airlines.

He said the company’s objective was to help eliminate the points of financial conflict between government and domestic carriers.