The Chairman and CEO of Air Peace, Allen Onyema, has issued a stark warning regarding the future of Nigerian aviation, stating that a new wave of taxes and levies could see domestic ticket prices soar to ₦1 million and force major carriers out of business within months.
Speaking on ARISE NEWS on Sunday, Onyema revealed that the industry is currently “choking” under a regime of multiple and overlapping charges.
He noted that out of a typical ₦350,000 ticket, the airline only retains approximately ₦81,000, with the remainder being swallowed by various government agencies and regulatory fees.
The Burden of “Double Taxation” A primary point of contention is the reintroduction of Value Added Tax (VAT) and customs duties. While the 2020 Finance Act provided relief by removing VAT on ticket fares and imported aircraft parts, the new tax provisions reverse these gains.
“We are suffering multiple taxation,” Onyema stated. “The NCAA takes a mandatory five percent from every ticket. Now, under the new regime, we face 7.5 percent VAT on aircraft purchases and spare parts. On an $80 million aircraft, combined with bank interest rates of 35 percent, the financial burden becomes impossible to bear.”
Onyema argued that the current policy contradicts the International Civil Aviation Organisation (ICAO) guidelines, which suggest that aviation authorities should operate on a “cost recovery” basis rather than using the sector as a primary revenue generator for the state.
The Air Peace boss warned that the consequences of an aviation sector collapse would extend far beyond the runways. With airlines heavily leveraged, a shutdown would trigger banking sector strain, reduced connectivity and industry shutdown.
Onyema predicted that without immediate intervention, domestic airlines could “go down” in as little as three months.
Despite the Airline Operators of Nigeria (AON) presenting these concerns to the National Assembly and the tax reform committee, Onyema expressed frustration that their data-driven warnings have so far gone unheeded. “We submitted our facts, and while they saw reason with us, the implementation remains a threat,” he concluded.
Source: businessday
