Allen Onyema, Chairman and Chief Executive Officer of Air Peace, has issued a stark warning that the recent reintroduction of taxes on the aviation sector could trigger a catastrophic collapse of local airlines and push the cost of a single economy class ticket to an unprecedented ₦1.7 million.
Speaking in an interview on ARISE NEWS on Sunday, Onyema described the current fiscal environment as a “looming crisis already buckling under the weight of multiple levies and charges. He urgently called on the government to revert to the more favourable provisions of the 2020 Tax Act to avert an industry-wide disaster.
Onyema detailed the severe financial burdens crippling Nigerian carriers. He revealed that from a typical ticket priced at ₦350,000, the airline81,000 after mandatory deductions, including a compulsory 5% charge on every ticket sold to the Nigerian Civil Aviation Authority (NCAA).
“We are suffering multiple taxation, multiple charges… This runs contrary to international standards set by ICAO (International Civil Aviation Organization), which advocates for cost recovery, not revenue generation, from airlines,” Onyema stated.
The Air Peace CEO2020 Tax Act had provided vital relief by removing Customs Duties and Value Added Tax (VAT) on imported aircraft, spare parts, engines, and ticket fares. This, he argued, was a progressive’s strategic role in economic growth and national integration.
“The new tax law has brought those things back. All of them,” he lamented. “Now, importing an $80 million aircraft attracts a 7.5% VAT. Spare parts are similarly taxed. Combined with exorbitant bank lending rates of 30-35%, these policies make sustainable operations impossible.”
Onyema warned that the accumulated financial pressure would inevitably be passed on to the flying public, drastically reducing demand and crippling the sector.
“With this new tax regime… ticket fares will hit ₦1.7 we implement that tax reform, Nigerian airlines will go down in three months. Within one month, some will go down,” he predicted. He further cautioned that the collapse of airlines would have a devastating ripple effect, inflicting significant financial losses on the Nigerian banks that financed their aircraft.
Onyema confirmed that the Airline Operators of Nigeria (AON) has repeatedly engaged with the National Assembly and the government’s tax reform committee, presenting detailed facts on the sector’s precarious state. He reported that lawmakers and consultants were often “surprised” and “worried” by the revelations.
Appealing to the business-friendly stance of President Bola Tinubu, Onyema pleaded for a review of the policy. “We’re not asking them to give us money… AON is asking let us go back to the 2020 Act. That Act respected aviation.”
He concluded with a call for supportive policies: “The government should clearly favour locally supported aviation practices through targeted fiscal, regulatory, and infrastructural support. That is the way forward for the Nigerian aviation industry.”
