- Air Peace Chairman Allen Onyema has warned of an impending crisis in Nigeria’s aviation sector, citing excessive taxation and proposed tax reforms.
- He said airlines operate on very slim margins and cautioned that if new taxes are implemented, domestic economy airfares could rise to as high as ₦1.7 million, worsening the already high cost of travel.
Allen Onyema, Chairman and CEO of Air Peace, has raised an alarm over a potential “major crisis” in Nigeria’s aviation sector.
In a Sunday interview with Arise News, he warned that the industry is “choking” under excessive taxation and that new tax reforms could push domestic economy class tickets to ₦1.7 million.
The warning comes as Yuletide airfares already reached record highs of ₦250,000 to ₦450,000 for single-route domestic flights, sparking public outrage.
Onyema dismissed claims that airlines are profiteering from high fares, explaining that statutory deductions leave operators with very thin margins.
“People talk as if airlines are making a killing. It’s not true. Just take a ticket of about N350,000. What comes to the airlines is about N81,000.”
He highlighted the reintroduction of charges that the 2020 Finance Act had previously removed, such as 7.5% VAT on aircraft parts and ticket fares, alongside a mandatory 5% deduction to the NCAA for every ticket sold.
The Air Peace boss cautioned that if the new tax laws which include customs duties on imported aircraft and spare parts are implemented without review, the financial burden will be passed directly to the consumer.
“With 7.5 per cent on ticket fares, ticket fares will hit N1.7 million soon. If we implement that tax reform, Nigerian airlines will go down in three months. At the end of the day, economy class tickets will go for about N1.7 million if it happens.”
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