Excessive Taxes Ground Nigerian Aviation Sector, Making Airfares Unaffordable

On November 25, 2024, Mr. Kay sat in his living room, his forced smiles unable to hide his disappointment. The retired secondary school administrator had spent months preparing to attend his only child’s graduation at the University of Nigeria, Nsukka. Yet, he missed the event—unable to afford the flight, despite weeks of desperate attempts to gather funds.

Even with a rebate offered by a former student turned airline executive, the cost was out of reach. Shockingly, the taxes alone accounted for over 40% of the ticket price.

Though fictional, Mr. Kay’s story reflects the harsh reality many Nigerian travelers face, as excessive taxation continues to push airfares beyond the reach of the average citizen.

Mounting Complaints

Airline operators have long voiced concerns about the crippling effects of multiple taxes on the aviation sector. In 2017, Air Peace CEO Allen Onyema decried the excessive charges, noting they numbered over 37 different taxes, eroding profits and destabilizing operations.

By 2025, the situation remains dire. Domestic airlines now pay at least 16 taxes, including terminal navigation, enroute navigation, clearance, and extension charges. These payments go to multiple entities, such as the Federal Airports Authority of Nigeria (FAAN), Nigerian Civil Aviation Authority (NCAA), and Nigerian Airspace Management Agency (NAMA), among others.

A Peculiar Market

Captain Ado Sanusi, Managing Director of Aero Contractors, highlights Nigeria’s unique aviation challenges. He explains that high taxes force airlines to inflate ticket prices, making air travel inaccessible for many Nigerians.

“If we reduce taxes, ticket prices will come down, enabling more people to fly. This will organically grow the market,” Sanusi said.

The goal is to make domestic air travel accessible to at least 10% of Nigerians—around 25 million passengers annually. Achieving this requires ticket prices that align with the average Nigerian’s purchasing power, which hinges on reducing operational costs driven by taxation.

Misplaced Priorities

Despite its challenges, the NCAA is among the top 10 contributors to federal revenue, generating over ₦400 billion annually. However, Captain Sanusi criticizes the lack of corresponding improvements in infrastructure and airline sustainability.

“It’s ironic that the industry contributes so much to federal coffers while struggling to survive. The average lifespan of Nigerian airlines is only 10–15 years, and many are barely hanging on.”

Sanusi advocates for unifying taxes, ensuring airlines pay a consolidated fee rather than multiple charges. This reform would align Nigeria’s aviation system with global cost-recovery practices.

Calls for Genuine Reform

Sindy Foster, Principal Managing Partner at Avaero Capital Partners, emphasizes the need for action, not just discussions. While VAT exemptions on aviation were a step forward, she stresses the importance of comprehensive tax reform to alleviate the sector’s burden.

“There’s nothing new to say. What remains outstanding is action,” Foster asserted.

A Path Forward

The Nigerian aviation industry requires urgent reforms to address its taxation structure. Unified taxes, cost-recovery models, and sustainable policies could reduce ticket prices, grow the market, and ensure long-term stability.

Without decisive action, the sector risks continued decline, leaving millions unable to access safe and efficient air travel.