…Harsh Taxes, High Insurance Could Ground Nigerian Airlines
Chairman of Air Peace, Dr. Allen Onyema, has issued a stark warning that Nigeria’s airline industry could collapse within 48 hours if proposed tax and customs reforms are implemented, urging government and stakeholders to address crippling fiscal and operational challenges urgently.
Speaking during a panel session at the 29th League of Airport and Aviation Correspondents (LAAC) Conference in Lagos, Onyema decried the suffocating tax regime and cost barriers Nigerian carriers face, describing them as “industry killers” that erode profitability and threaten survival.
“If the new tax measures custom duties on imported aircraft and parts, 7.5% VAT on airfares, and other levies come into effect in January, airlines will die within 48 hours,” Onyema cautioned. “This has never been done anywhere before, and it will destroy the sector.”
The Air Peace boss stressed that Nigerian airlines operate in one of the toughest environments globally, facing multiple charges from the NCAA, FAAN, and other agencies, in addition to exorbitant insurance premiums caused by the country’s negative international image.
According to him, the insurance cost for a single Nigerian-registered aircraft equals the premium for five to eight aircraft elsewhere, a disparity driven by “unfair and baseless” safety stigma.
Onyema also challenged the narrative that foreign airlines outperform Nigerian carriers, urging the public to appreciate the resilience of local operators battling both domestic and international conspiracies.
“Air Peace is bigger than some national carriers in Africa. Yet, we face the burden of carrying the industry while being unfairly compared to foreign operators. We need to stop demonizing our own,” he said.
On the issue of financing, Onyema backed calls for industry-specific funding support, including government-backed single-digit interest loans and sovereign guarantees to enable carriers to access cheaper credit internationally.
He commended Aviation Minister Festus Keyamo for championing the creation of a government leasing company to provide aircraft to Nigerian airlines at affordable rates.
“If we get single-digit funding, no airline will fail in Nigeria,” he asserted. “But before borrowing, operators must conduct self-introspection know your market, your model, and borrow only what you need.”
The Air Peace chairman further identified lack of airport transit facilities, excessive border controls for connecting passengers, and inadequate hub infrastructure as barriers to Nigeria’s competitiveness in the West African market.
He stressed that with the right infrastructure and policy reforms, Nigerian carriers could rival Ethiopia and other leading African aviation hubs within a decade.
Despite the challenges, Onyema remains optimistic. “The government is now listening. In the next 22 months, I believe Nigeria will have airports and policies we can be proud of. But we must act fast to save our airlines from suffocation,” he concluded.
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