CPPE Warns Multiple Taxes Threaten Survival Of Nigerian Airlines

The Centre for the Promotion of Private Enterprise (CPPE) has warned that Nigeria’s domestic airlines are under severe financial strain due to multiple taxes, statutory charges and regulatory levies, saying the current cost structure threatens the sustainability of the aviation industry.

In a statement, the Chief Executive Officer of CPPE, Muda Yusuf, said airlines lose about 35 per cent of their ticket revenue to charges imposed by aviation agencies before they can access the funds.

According to him, fees collected by the Nigerian Civil Aviation Authority (NCAA), the Federal Airports Authority of Nigeria (FAAN) and the Nigerian Airspace Management Agency (NAMA) have become excessive and are no longer sustainable for operators.

Yusuf said the charges, which include ticket sales charges, passenger service charges, cargo fees, landing and parking fees, inspection charges, and import duties on aircraft and spare parts, are particularly burdensome given the aviation industry’s traditionally low profit margins.

He acknowledged the Federal Government’s decision to grant airlines a 30 per cent discount on statutory debts owed to aviation agencies but described the measure as temporary, urging authorities to address the underlying structural issues affecting the sector.

The CPPE boss called on the government to streamline the existing tax regime, arguing that reducing the financial burden on airlines would improve their viability and could ultimately result in lower airfares for passengers.

Echoing the concerns, Chairman and Chief Executive Officer of Air Peace, Allen Onyema, said domestic airlines retain only a small portion of ticket revenue after statutory deductions.

He cited a domestic airfare of N350,000 as an example, claiming that airlines receive only about N81,000 after deductions, from which they must still cover operational costs such as aviation fuel, maintenance, staff salaries and aircraft financing.

Onyema also criticised the NCAA’s five per cent Ticket Sales Charge, arguing that the levy unfairly reduces airline earnings because it is deducted directly from ticket revenue. He suggested that the charge should instead be collected directly from passengers.

According to him, between 65 and 70 per cent of airline revenue is consumed by taxes, levies, fuel costs and other operating expenses, leaving operators with limited resources to sustain their businesses.

He further identified high borrowing costs and rising aviation fuel prices as additional challenges confronting the industry.

To address the situation, Onyema urged President Bola Tinubu to establish an Aviation Taxes and Charges Review Committee comprising government officials, regulators and airline operators to review the country’s aviation fee structure.

However, the NCAA dismissed claims that taxes are responsible for rising airfares.

The agency’s Director of Public Affairs and Consumer Protection, Michael Achimugu, maintained that airfare increases are largely driven by market forces, particularly increased demand during peak travel periods.

Meanwhile, governance analyst Joe Abah said passengers remain the biggest losers, arguing that while airlines and government agencies may benefit from higher fares, travellers bear the financial burden.

Industry stakeholders have continued to call for comprehensive reforms, noting that Nigerian airlines contend with more than 50 different taxes and charges, significantly higher than those faced by operators in several other African countries.

They stressed that a more balanced and transparent regulatory framework is essential to ensure the long-term sustainability of the country’s aviation industry while making air travel more affordable.