Nigeria’s domestic aviation industry could face serious disruption as new tax measures threaten to push airfares beyond ₦1m (£700), according to the head of the country’s largest airline.
Allen Onyema, chairman and chief executive of Air Peace, said the sector was under severe financial pressure and warned that some airlines could be forced to suspend operations if urgent action is not taken.
Speaking to ARISE News on Sunday, Mr Onyema said Nigerian airlines were already struggling with multiple taxes, levies and regulatory charges, leaving operators with only a fraction of ticket revenue.
“On a ticket costing about ₦350,000, what actually comes to the airline is roughly ₦81,000,” he said. “Yet there is a public perception that airlines are making huge profits. That is not the reality.”
He criticised what he described as overlapping charges imposed by government agencies, including a mandatory five per cent deduction on every ticket by the Nigerian Civil Aviation Authority (NCAA).
Mr Onyema said the situation had worsened following the introduction of new tax laws that reversed incentives introduced in 2020. Those earlier measures had exempted imported aircraft, spare parts and engines from customs duties and value-added tax (VAT), and removed VAT on ticket sales to support the industry.
Under the new framework, a 7.5% VAT has been reintroduced on aircraft purchases and spare parts, significantly increasing operating costs for local airlines.
Nigeria’s aviation sector has long complained of high operating costs, volatile exchange rates and limited access to foreign currency, with industry leaders warning that rising fares could further reduce passenger numbers and threaten the survival of local carriers.
