Air Peace Chairman and Chief Executive Officer, Allen Onyema, has warned that Nigeria’s domestic aviation industry could face serious disruption if newly introduced tax laws are implemented, cautioning that airfares within the country may rise beyond ₦1 million and force some airlines out of business.
Onyema said Nigerian airlines are already burdened by multiple taxes, levies and charges, which significantly reduce the revenue operators earn from ticket sales. He explained that out of an average ticket costing about ₦350,000, airlines may receive less than ₦100,000 after statutory deductions.
He criticised the reintroduction of value-added tax on imported aircraft, spare parts and ticket fares, noting that the 2020 tax reforms had previously removed such charges and provided relief to the struggling aviation sector. According to him, an aircraft valued at $80 million would now attract a 7.5 per cent VAT under the new regime.
The Air Peace chairman said high borrowing costs, with bank interest rates ranging between 30 and 35 per cent, have further compounded the challenges facing airline operators, making business operations increasingly unsustainable.
He warned that unless the tax policy is urgently reviewed, the added financial pressure would be passed on to passengers, leading to sharp increases in ticket prices, possible airline collapses and wider economic consequences, including losses for Nigerian banks.
