Airline Operators Groan over Heavy Taxation, Kick against Levies on Flight Tickets

Chinedu Eze

Airline operators have decried the huge levies paid on each ticket in domestic travel, which according to them, builds up the cost of airfares and serves as disincentive to air travel in Nigeria.

For more Nigerians to travel by air and for airlines to operate profitably and grow, they said taxes have to be reviewed downwards by government, insisting that the major reason why less than one per cent of Nigerians travel by air is the high cost of ticket.

According to them, without the high number of passengers travelling by air, airline operation cannot be profitable.

The operators said that the high mortality rate of airlines in Nigeria was due to high cost of operation, low passenger volume occasioned by high airfares, inhibiting airlines to record high passenger throughout the year.

With over 32 airports connecting most parts of Nigeria, the number of Nigerians that travel to domestic destinations has never surpassed 12 million. The highest recorded of air travel in Nigeria was 16 million in 2022, which includes domestic and international passenger movement.

According to the Chairman of United Nigeria Airlines and the spokesman of Airline Operators of Nigeria (AON), Professor Obiora Okonkwo, Nigerian airlines are being taxed to death.

“I am the spokesperson of AON. I’m telling you that we are being taxed to death. It is too much to the extent that we cannot even breathe anymore. It is suffocating us. We are only urging them (government) to apply only the taxes charged to airlines in other progressive countries because airline business is global and follows the same standards,” Okonkwo said.

He gave kudos to the federal government for the tariff waiver on importation of aircraft and spares, but noted that to further help the airlines, government should facilitate a system whereby the airlines could access credit facility from banks at single digit interest rate.

Access to credit, he said, will boost the nation’s economy because airlines serve as catalyst to the growth of any economy.

He said this was why government in many countries are fully involved in aviation development because of its pivotal role in providing the fastest means of movement for bureaucrats, top businessmen and women and others who determine the economic nuances of any nation.

“When we talk about single-digit loans, we are bearing in mind that aviation is the same worldwide, and the competition in aviation sometimes can be very, very high. And when we are in Nigeria, and competing in the same market with other large carriers, legacy carriers, you know them, British Airways, American Airlines, Lufthansa, Qatar, just name them. You know that when you go to their country, they have loans as little as three per cent interest, not even a special window loan, but a market situation. Those loans have very long-term period. It could easily take you a long time of 10 years and 20 years.

“Compare with our market, where we have to go to foreign exchange market, access the product at the existing commercial rate that’s already over 30 per cent interest rate, and then face all the other charges that are related to that. Business must be able to preserve sustainability, and must be viable to attract assets. That is what exists in other countries. And we’re just asking them to do what exists in other places for us. So, we expect you to please join hands in achieving this because it is for the industry, for the nation. It will also reduce capital flight,” Okonkwo explained.

Speaking, the Chief Finance Officer of Aero Contractors, Mr. Charles Grant said government treats air travel as luxury, “but it is actually a fundamental for any nation’s economic growth and should be given all the support it deserves.”

Grant explained that the major reason why airlines in Nigeria have short life span was because they carry heavy tax burden from government, “but government ought to recognise the critical role air transport plays in any country and support it.”

“Aviation isn’t a luxury—it’s a platform for commerce, trade, and integration.

Presently the Nigerian aviation sector lags behind its peers and persistently struggles for survival,” Grant said.

“My appeal is not about avoiding tax. It’s about growing the pie first—so we all get more in the long run. Because in aviation, just like in agriculture or power—you cannot extract what you haven’t enabled,” Grant said.

He regretted that instead of growing, the passenger volume on domestic travel is declining, which signals a sector that is underperforming.

Grant said Nigerian airlines are losing while regional operators are gaining, “and some policies of government, which are inimical to growth of domestic operators ostensibly favour foreign airlines.”

 He said there was misalignment between aviation realities and how fiscal policy is being applied.

“We’re seeing fragmented decisions, limited coordination, and policies that weren’t built with airline economics in mind. If that continues, we won’t just lose passengers, but we’ll also lose jobs, tax potential, and our place in the region’s aviation future. When aviation stalls, it affects broader economic momentum,” he remarked.

He also observed that there is increasing number of Nigerian passengers on international destinations but Nigerian carriers are not benefiting well from the market.

“One of the most ironic dynamics in West African aviation today is this: Nigerian demand is thriving — just not on Nigerian carriers. Airlines like ASKY, RwandAir, Air Côte d’Ivoire, and Africa World Airlines have built viable business models around Nigerian traffic. They’ve turned Lagos, Abuja, and Port Harcourt into core nodes in their regional networks — not because of bilateral planning, but because the market has allowed it.”