The International Air Transport Association (IATA) has described Nigeria as one of the most challenging markets in the world for establishing and operating an airline, citing high operating costs, multiple taxes, expensive financing, and infrastructure constraints as major obstacles confronting indigenous carriers.
Speaking during the 82nd IATA Annual General Meeting and World Air Transport Summit in Rio de Janeiro, Brazil, IATA’s Regional Vice President for Africa and the Middle East, Kamil Al-Awadhi, said Nigeria ranks among the toughest countries globally for airline operations, alongside Afghanistan.
According to Al-Awadhi, while Afghanistan’s challenges are largely linked to security and political instability, Nigeria’s difficulties stem from the exceptionally high cost of doing business in the aviation sector. He noted that local airlines face a far more demanding operating environment than foreign carriers, which are exposed to only a fraction of the regulatory and operational costs borne by domestic operators.
Despite the challenges, Al-Awadhi commended Nigeria’s Minister of Aviation and Aerospace Development, Festus Keyamo, for efforts to improve the industry’s operating environment. He said significant progress had been made within a short period, particularly in stabilising aspects of the sector and addressing some longstanding concerns.
The IATA executive pointed to several structural issues affecting Nigerian airlines, including insurance premiums that are substantially higher than global averages due to the country’s risk classification, as well as commercial lending rates that can exceed 25 percent. He also highlighted the burden of multiple airport charges, passenger service fees, fuel levies and other statutory costs, which continue to erode airline profitability.
Al-Awadhi argued that aviation in Nigeria is often viewed as a revenue-generating source rather than a catalyst for economic growth and connectivity. He added that challenges such as currency volatility, the historical issue of trapped airline funds, and infrastructure limitations further complicate airline operations and investment decisions.
He stressed that the industry requires policies that encourage growth and competitiveness rather than excessive taxation and regulatory costs, warning that sustainable airline operations will remain difficult unless the sector is allowed greater financial and operational flexibility.
Beyond Nigeria, Al-Awadhi also expressed concern over the slow implementation of the Single African Air Transport Market (SAATM), describing it as a major barrier to aviation growth across the continent. He said many African countries continue to sign liberalisation agreements without fully implementing them, limiting connectivity and restricting opportunities for airlines to expand within the continent.
According to him, it remains easier and, in many cases, cheaper to travel from African cities to destinations in Europe or the Middle East than between neighbouring African countries. He attributed this to restrictive Bilateral Air Services Agreements (BASAs), protectionist policies, and limited commitment to market liberalisation.
The IATA official further criticised the slow adoption of the Economic Community of West African States (ECOWAS) directive aimed at reducing regional air transport taxes, charges and levies by 25 percent to lower ticket prices and improve connectivity across West Africa. He revealed that only one ECOWAS member state has so far implemented the directive, despite its potential to reduce travel costs and stimulate regional air traffic.
Al-Awadhi maintained that improving air connectivity, lowering operational costs and fully implementing regional aviation agreements would be critical to unlocking Africa’s aviation potential and enabling local airlines to compete more effectively on both regional and global routes.
