Chairman and Chief Executive Officer of Air Peace, Allen Onyema, has called for an urgent review of taxes and charges imposed on airlines, warning that Nigeria’s aviation survival crisis could worsen if operators continue to face mounting cost pressures without corresponding policy support.
Speaking during an interview on the challenges confronting the aviation industry, Onyema said airline operators plan to seek an audience with President Bola Tinubu to discuss what they describe as an aviation survival crisis driven by multiple taxes, rising fuel costs, expensive financing and operational constraints.
Central to those concerns, he said, is the five per cent Ticket Sales Charge (TSC), which airlines collect from passengers on behalf of government.
According to Onyema, the issue is the cumulative burden of aviation taxes and fees in an industry where profit margins are already thin.
“The truth we have to tell the president is that the 5 per cent passenger TSC that they charge the airline,” Onyema said.
“We refuse to accept. If I charge N100,000, TSC will take 5 per cent. If I charge N200,000, TSC will take 5 per cent of N200,000. Aviation itself does not give you 5 per cent gain.”
The Air Peace chairman said the aviation survival crisis requires immediate government attention, warning that unless industry charges are reviewed, more airlines could struggle to remain viable.
He called for the establishment of an Aviation Taxes and Charges Review Committee comprising government officials, aviation experts and airline operators.
“We want Mr President to set up Aviation Taxes and Charges Review Committee,” he said. “It is very important so that it doesn’t look as if we are trying to fool the government.”
The call comes amid growing concern about the operating environment for airlines in Nigeria. Onyema referenced comments attributed to the International Air Transport Association (IATA), which recently highlighted the difficulties of operating an airline in the country due to the cost structure facing operators.
“That comment wasn’t complimentary of anybody in this country,” Onyema said. “But we welcome it because over the years airlines in Nigeria have been crying to governments over time.”
Inside the Aviation Survival Crisis
According to him, the aviation survival crisis facing Nigerian carriers has been intensified by developments in the global aviation market, particularly rising fuel prices linked to geopolitical tensions in the Middle East.
“Since the advent of the US-Israel-Iran war, the aviation world has been adversely affected,” he said.
“You can see that airlines have been closing down operations worldwide. Some of the biggest airlines in the world are cutting up to 20,000 flights in order to survive because of the rise in cost of jet fuel.”
While airlines globally are grappling with higher fuel costs, Onyema argued that the aviation survival crisis is more severe in Nigeria because operators contend with significantly higher operating expenses.
He said aviation fuel prices in Nigeria rose from about N900 per litre to as much as N3,300 per litre at one point, forcing airlines to rely heavily on bank financing to sustain operations.
“No Nigerian airline is smiling now,” he said. “We’ve all borrowed and borrowed billions just to buy fuel and fly.”
Providing an example of the pressure on airline finances, Onyema said fuel that previously cost about N3 million for a flight now costs between N12 million and N13 million for the same operation.
The aviation survival crisis, he added, is further compounded by the high cost of borrowing in Nigeria.
According to him, airlines in developed economies often obtain financing at interest rates of between three and four per cent, while Nigerian operators borrow at rates ranging from 29 to 33 per cent.
“So the Nigerian airline is actually dead-on arrival,” he said.
Beyond immediate cost concerns, Onyema urged policymakers to view aviation as a strategic sector capable of stimulating wider economic growth.
“Aviation is a catalyst of national strategic importance,” he said. “There is no UAE without Etihad and Emirates.”
According to him, airlines create value through tourism, trade, investment and economic integration, making them critical contributors to national development.
“They might not be making money for themselves, but they are doing other things that are engineering the ecosystem to make money for the country,” Onyema said.
The Air Peace chief argued that addressing the aviation survival crisis requires a shift in policy thinking, away from viewing airlines primarily as revenue sources and toward recognising their broader economic importance.
As an example of the limited support available to local operators, Onyema recalled that during the COVID-19 pandemic, all 34 airlines in Nigeria shared a N4 billion intervention package.
“During COVID, America donated billions of dollars to their airlines,” he said.
“The entire 34 airlines in Nigeria were given N4 billion. Some airlines got N8 million only. Tell me what you’re going to do with that.”
He also pointed to the high failure rate within the sector, noting that more than 70 airlines have ceased operations in Nigeria over the years.
“Over 70 airlines have come and gone in this country. Nigeria has the highest mortality rate of airlines worldwide,” Onyema said.
Despite the challenges, Onyema acknowledged recent efforts by the Federal Government to improve conditions in the sector, including moves to implement the Cape Town Convention and plans to establish an aircraft leasing company.
“Thanks to President Tinubu and Festus Keyamo,” he said. “The government is trying to establish a leasing company now.”
However, he maintained that resolving the aviation survival crisis will require broader reforms, particularly a comprehensive review of aviation taxes and charges.
“We are patriotic citizens of this country,” Onyema said. “They need to listen more to us and get to know the pain points that are hitting these airlines.”
For Onyema, addressing the aviation survival crisis is no longer simply about protecting airline balance sheets. It is about preserving jobs, safeguarding investments and ensuring the long-term sustainability of a sector he believes is critical to Nigeria’s economic growth and connectivity.
