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Medview’s financials expose N300bn under-declared revenues

Monday, 20 November 2017


Med-View Airline Plc had reported that it posted a profit after tax of N1.197 billion for the third quarter ended September 30, 2017.
The airline, in a filing with the Nigerian Stock Exchange (NSE), said it posted profit after tax of N1.197 billion during the nine months as against a N1.274 billion reported in 2016, representing a drop of six per cent.

The airline’s profit before tax stood at N1.362 billion during the period under review as against a profit before tax of N1.450 billion posted in 2016. The airline said revenue rose by 47.98 per cent from N19.442 billion in 2016 to N28.772 billion in 2017.

But aviation analyst and aviation security consultant, Grp. Captain John Ojikutu (Rtd) told our correspondent that the N385 billion declared as total earnings of carriers operating in the country for 2015/2016 released last February, which he contested in April, is not consistent with international and domestic passenger traffic available in the agency and the Federal Airports Authority of Nigeria (FAAN).

The NCAA’s figure shows that for 2015 and 2016, revenue from both international and domestic carriers stood at N715.9 billion.

 He, however, stated that taking into consideration every other factor, the Federal Government expected revenue should be over N1 trillion from the 2015 and 2016 international and domestic passenger traffic, alleging that there was ‘under declaration of figures by the aviation regulatory body.”
Specifically, he said if each passenger of the eight million domestic passengers and three million international passengers traffic presented by NCAA paid an average of N15,000 and N300,000 respectively, the earnings will be over N1 trillion.

He noted that the International Air Transport Association (IATA) report that air transport contributed $8 billion to Nigeria’s Gross Domestic Product (GDP) also speaks volumes about the inaccuracies in the NCAA’s released figures of N385 billion and N330 billion for 2015 and 2016 respectively.

Ojikutu explained that with the figures of Medview alone that grossed N14 billion and N26 billion in 2015 and 2016, “We should accept that the contribution of Medview alone into the earnings of about 30 airlines for these two years is between four per cent in 2015 and seven per cent in 2016 where there are airlines such as British Airways, Emirates, Virgin Atlantic, Ethiopian Airlines, South African Airways and many others.”

His words: “This cannot be true. Something is wrong with the 2015/2016 total earnings of N385 billion and N330 billion calculated from two million international passengers and five million domestic passengers. In each year, passengers pay respectively N300,000 and N20,000 without any consideration for first and business class passengers.”

Besides, he alleged that there were some ambiguities in the passengers and air traffic data presented by NCAA, which he stated were very much at variance with other available statistics.

Ojikutu stated that the estimated figures for only the embarking passengers should be about 50 per cent of the cumulative passengers traffic figures, which should bring the earnings on ticket sales at the same rate per passenger to about N470 billion for each year. This, he said, was at variance with the figures bandied by NCAA.

He reiterated that the aviation regulatory body should have taken into consideration the figures available with the substantive custodians of passenger traffic and air traffic movement, which are the Federal Airports Authority of Nigeria (FAAN) and the Nigerian Airspace Management Agency (NAMA).

“For instance while NCAA recorded a cumulative 11 million passenger traffic in 2015, FAAN had a record of over 14 million passengers and 250,512 air traffic in the same year; a difference of over 3.8 million for passengers traffic and 13,667 for air traffic. These figures if comparatively taken into consideration, could have clarified whether the airlines earnings were estimates or actual”, he added.
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