Nigeria’s domestic airlines are facing mounting financial pressure as multiple taxes, statutory charges and regulatory levies continue to erode their revenues, with the Centre for the Promotion of Private Enterprise (CPPE) warning that the current cost structure is undermining the sustainability of the country’s aviation industry.
In a statement issued by its Chief Executive Officer, Dr. Muda Yusuf, the economic policy think tank said industry estimates indicate that as much as 35 per cent of airline ticket revenue is absorbed by taxes, statutory fees and regulatory charges before operators can access the funds needed to run their businesses.
According to the CPPE, charges imposed by the Nigerian Civil Aviation Authority (NCAA), the Federal Airports Authority of Nigeria (FAAN) and the Nigerian Airspace Management Agency (NAMA) have become excessive for an industry that traditionally operates on very thin profit margins.
The organisation noted that airlines contend with a wide range of financial obligations, including Ticket Sales Charges, Passenger Service Charges, landing and parking fees, cargo charges, inspection fees, navigation charges and import duties on aircraft and spare parts, all of which significantly increase operating costs.
While acknowledging the Federal Government’s decision to grant airlines a 30 per cent discount on outstanding statutory debts owed to aviation agencies, Yusuf described the measure as welcome but insufficient to resolve the industry’s deeper structural challenges.
He argued that meaningful reform should focus on simplifying Nigeria’s aviation tax regime and reducing the multiplicity of charges, adding that a more sustainable cost structure would improve the financial health of indigenous airlines and could ultimately translate into lower airfares for passengers.
The concerns raised by the CPPE mirror those of airline operators, particularly Air Peace Chairman and Chief Executive Officer, Dr. Allen Onyema, who has repeatedly criticised what he describes as excessive regulatory deductions from ticket sales.
Using a ₦350,000 domestic ticket as an illustration, Onyema claimed that airlines retain only about ₦81,000 before paying for fuel, aircraft maintenance, staff salaries, insurance, financing and other operational expenses.
He specifically questioned the NCAA’s five per cent Ticket Sales Charge, arguing that because it is calculated as a percentage of the airfare, airlines effectively surrender a larger portion of their earnings as ticket prices rise.
According to Onyema, the cumulative effect of multiple taxes and levies leaves domestic carriers with limited resources to invest in fleet expansion, safety improvements and service delivery, despite rising operating costs driven by fuel prices, foreign exchange pressures and expensive aircraft financing.
The CPPE maintained that reducing the industry’s tax burden would not only strengthen airline sustainability but also enhance the competitiveness of Nigeria’s aviation sector by encouraging investment, improving operational resilience and making air travel more affordable over the long term.
The renewed calls for tax reform come as Nigeria’s aviation industry continues to grapple with high operating costs, making the review of statutory charges an increasingly important issue for both regulators and airline operators seeking to ensure the sector’s long-term growth and stability.
