Favori, SCAMA or IATA? Somali airlines petition Parliament over double charges

The airlines want clarity on which authority between Favori, IATA or SCAMA should collect flight charges

By T. Roble

SUMMARY:

  • 1995: IATA and ICAO agree to collect aviation fees and be put in an ICAO managed trust fund on behalf of Somalia
  • 2013: Somalia grants management and operation rights of Aden Adde Airport to Turkish company Favori LLC
  • July 16, 2017:Civil aviation authority (SCAMA) appeals to Transport Ministry to be granted rights to collect flight fees
  • Sept 11, 2017: Transport Ministry grants SCAMA its wish effective October 1, 2017
  • Nov 15, 2017: SCAMA directs airlines to remit all fees to IATA
  • June 27, 2019: FGS terminates ICAO-IATA 1995 deal, authorises SCAMA to collect all fees
  • Nov 19, 2019: Favori LLC writes to Transport Ministry over complaints from airlines of charges demanded by IATA
  • Dec 9, 2019: Airlines association petitions Parliament over the matter

A TUSSLE AND CONFUSION on who should collect airline fees between the Somali Government, IATA and the Turkish company Favori LLC has left airlines in the country at the risk of losing their certification by the global airlines’ association, IATA.

The association of airlines in Somalia is now petitioning Parliament to intervene in the matter which has, from various correspondences seen by Goobjoog News thrown the aviation industry into a quagmire.

The big problem, the airlines said, is that both Favori LLC and IATA are demanding to collect the fees on behalf of the government.

In their memorandum to Parliament, the airlines have complained over what they termed as double charges by the International Air Transport Association (IATA) and Favori LLC. An outstanding debt owed by the airlines to the government now in the upwards of $20million leaves airlines at the mercy of IATA which has the authority to decertify them over unpaid fees.

1995 PACT

The big problem, the airlines said, is that both Favori LLC and IATA are demanding to collect the fees on behalf of the government. But where did the rains start beating these airlines?

In 1995, the International Civil Aviation Authority (ICAO) entered into a pact with IATA to collect flight fees on behalf the Republic of Somalia which was by then steeped in political turmoil.

That agreement according to the recently released UN Panel of Experts (PoE) report ended in June 27, 2019 when the Federal Government agreed with both ICAO and IATA to terminate it. Henceforth, the new arrangement read, Landing, Navigation and Overnight Parking fees would be channeled to the Somali Civil Aviation and Meteorology Authority (SCAMA) account No. 1040 at the Central Bank.

Subsequently, following the June agreement, ICAO remitted the $6.5 million balance remaining in the ICAO trust fund to the Federal Government of Somalia.

CONFUSION

But a protest letter by Favori LLC to the Ministry of Transport and Civil Aviation indicates otherwise. The Turkish company says it had been collecting the fees from airlines since its inception in 2013.

“The airlines have been paying navigation fees to Favori since our inception in September, 2013,” says Favori in a letter addressed to Transport Minister Mohamed Salat dated November 19, 2019. “Everything has been running smoothly until earlier this year when we started receiving complaints that IATA is now charging airlines for the same service.”

In the letter, Favori LLC is seeking clarity noting, ‘we do not understand on what basis IATA is collecting fees whilst we have an agreement with the government to collect airport fees’.

According to Favori LLC, SCAMA directed airlines in a letter dated November 15, 2017 (ref:SCAMA/127/17) to pay the navigation fees to IATA.

SCAMA-FAVORI-MINISTRY TUSSLE

Prior correspondence between the Ministry, Favori LLC and SCAMA paint to an enduring struggle for control of millions of dollars flying into and out of the country. Each airline is charged $275 per flight. The airlines association says Aden Adde Airport now handles 30,000 flights annually.

It appears from the letters exchanged by the three parties that Somali government contracted Favori to collect the fees even though IATA was already doing so based on the 1995 agreement which accordingly remained in forced until mid this year.

But the push and pull between Favori and SCAMA went unabated. In a letter dated July 16, 2017, SCAMA Director General Yusuf Abulle wrote to the Ministry of Transport asking for authority to collect the fees since ‘it falls within our mandate’.

In response two months later in September 11, 2017, then Transport Minister Mohamed Salat ordered the fees be collected by the FGS- in effect, SCAMA. This would be effective October 1, 2017. “Favori LLC is hereby instructed to collaborate with SCAMA in this matter,” the Minister said.

But Favori LLC seems to have sought amends over this directive as indicative in its letter to SCAMA in October 21, 2017 indicating thus, “We hereby declare that we are willing to pay directly SCAMA 100,000 USD each month for 3 months (October, November and December 2017) from the total revenue and deduct from the government income, if allowed us to collect revenues landing, navigation and parking again as it was.”

 

 

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