Experts: High Taxes Militating against Growth of African Airlines

Chinedu Eze

Industry experts have posited that despite the immense contribution of the aviation sector in the development of African economies, Nigeria inclusive, air travel is still considered as luxury in Africa.

According to them, the motive behind the high taxes imposed by African governments, explains why the cost of air ticket is high in African countries, adding that if the taxes and charges are passed to travellers they will not be able to afford it.

Recently, the International Air Transport Association (IATA) to warn African governments, stating that excessive taxes and charges on air travel are stifling the continent’s aviation growth and impeding its vital contribution to economic development.

The association urged a re-evaluation of current fiscal policies, emphasising that the economic benefits of aviation are catalytic, not a source of revenue to be overtaxed and added that aviation is not a luxury, but an economic and social lifeline.

Air travel significantly benefits a nation’s economy by driving trade, tourism, job creation, and investment, acting as a catalyst for overall GDP growth through efficient transport of high-value goods, connecting global markets, fostering innovation, and supporting diverse sectors like agriculture and manufacturing, ultimately boosting productivity and living standards. 

The CEO of ASKY Airlines, Esayas Woldemariam Hailu, said heavy taxation on Africa’s aviation sector is stifling economic growth, undermining job creation, and fuelling youth unrest across the continent, noting that when you buy a ticket in Africa, one-third of the cost goes to taxes and fees. Only two-thirds goes to the airline to cover all operational expenses.

In Nigeria, while the argument rages over high fares, travellers are not privy to the huge taxes and charges airlines and other airport users pay to aviation agencies. The details of the taxes and charged are contained in a document titled, “Aviation Taxes, Fees and Charges,” seen by THISDAY.

It revealed about 54 taxes, fees and charges spread across four major government agencies – the Nigeria Civil Aviation Authority (NCAA), the Federal Airports Authority of Nigeria (FAAN), the Nigerian Airspace Management Agency (NAMA), and the FIRS and built to the air tickets payable by travellers by the airlines.

The charges according to the document are split into aeronautical and non-aeronautical revenues.

FAAN alone collects about 18 separate payments from airlines.

These range from electricity and counter usage charges – $7 per hour to boarding bridge fees pegged at $250 per use, rent per square meter (office) – Abuja N75,000, Lagos N50,000 and Port Harcourt N55,000 and Service Recovery Charge 20 per cent.

Airlines also pay for Common User Terminal Equipment (CUTE) at $1.40 per passenger, along with Passenger Service Charges (PSC) of N2,000 for domestic and $150 for international passengers, according to the document.

Other payments include: Apron pass (Abuja) – N250,000, (Lagos) – N150,000 and Port Harcourt – N125,000 per vehicle and it’s paid annually. Registration fee per annum – N500,000; On-Duty Card (ODC) – N25,000 per staff. Extension charges – N100,000; Air Charge Cargo (ACC) – N5 per kg; Cargo registration fee -N250,000 (non-refundable); Non-refundable processes – N50,000 and port charge – N7 per kg.

Other charges include trans-shipment – N5 per kg; Export charge – N5 per kg; Courier/tarmac/pre-release – N20 per kg; Landing charge – N16,000 (day) and N24,000 (night) and parking charge – .0315k by aircraft weight and multiply by hours of parking.

For the Nigerian Airspace Management Agency (NAMA), the airlines pay five different charges, which are: en route – between N7,751.80 and N15,150,23; terminal navigation – N6,788.23, and over flight charges, clearance charges and extension charges, which are paid per flight basis.

Also, the airlines pay to the Nigerian Revenue Service corporate income tax – 30 per cent on profit on income above N100 million yearly.

Besides, the airlines pay about 30 taxes, fees and charges to the NCAA regularly and annually.

The charges are five per cent Ticket Sales Charge (TSC); five per cent Cargo Sales Charge (CSC); five per cent Excess Baggage Charge (EBC); Medical certification issue/renewal fee – N5,000 per crew; Cabin crew license issue/reissue – N7,500; Aircraft type inclusion on license – N5,000 (per type); Cabin crew license replacement/change of name – N7,500; and NCAA examination -N5,000 per exam.

Others are cabin instructor authorisation/renewal fee – N7,500 (per instructor); cabin instructor inclusion on authorization – N7,500 (per inclusion); training facility validation – N50,000; inspection/approval for training facilities in United Kingdom for pilots – N1,272,500.00 (2 years) and approval learning centre – N50,000 (2 years);        

Also on the list for the NCAA are: Airline Transport Pilot Licence (ATPL) – N12,500; Commercial Pilot License (CPL) – N12,500, renewal instrument rating – N7,500; initial validation – N10,000; revalidation – N10,000; air law exam – N4,000; medical – N7,500; additional aircraft type – N10,000, replacement of Licence – N7,500, while simulator training is free.

Other fees paid to NCAA include: Certificate of Airworthiness (C of A) renewal charges – N320,000; Aircraft Engineer Licence Validation – N10,000; Aircraft Engineer Licence Validation Renewal (foreign engineer) – N10,000; Approved Maintenance Organisation (AMO) charges – $13,440; Air Operators Certificate (AOC) fee – N200,000; reservation of registration mark charges – N500,000; import charge – five per cent of total amount; export charge – 5% per cent and import royalty – 10 per cent.

Out of the 54 taxes, fees and charges, six are directly built into every air ticket sold in Nigeria by the airlines.

The charges are Passenger Service Charge (PSC) – domestic and international (FAAN), Common User Terminal Equipment (CUTE) fee (FAAN), Passenger Terminal Facility Charge (FAAN), Ticket Sales Charge (TSC) – five per cent (NCAA), Excess Baggage Charge (EBC) – five per ent (NCAA) and $20 security levy (NCAA), while another Advanced Passenger Information System (APIS) levy of $11.5 is set to commence operation by December 1, 2025.

These can add between N18,000 and N25,000 to the cost of a domestic ticket, depending on the route and airline, while for international flights, these charges can run into about $150 to $180, making Nigerian tickets among the most expensive in the world.

But many travellers are not privy to these taxes and charges and when they complain about high fares they only hold airlines responsible.

The Vice President of IATA in Africa and the Middle East, Kamil Al Alwadi, said research showed that Nigeria ranks highest in airport charges in Africa.

Alwadi added that Abuja Airport remained the most expensive airport in Africa, closely followed by Lagos Airport.

He said: “In a recent research conducted by web, it discovered that the most expensive airport in Africa is Abuja airport, followed by Lagos airport. With all these exorbitant charges, Nigerian airlines can’t compete with their foreign counterparts.

“Africa has put itself in a place where it cannot help its own: expensive fuel, excessive charges, leasing and insurance cost through the roof, the airlines need to be financially viable too. The airlines contribute to the country’s economy, but Nigeria needs to decide what to do to them to survive.”

Industry experts insist that airlines in Nigeria cannot operate profitably if these taxes and charges are not reviewed by government.