By Chinelo Obogo
To lower airfares for Nigerian travelers, the federal government must address the excessive taxation and soaring foreign exchange rates that are driving up costs, asserts Prof. Obiora Okonkwo, Chairman of United Nigeria Airlines.
In an interview on Arise TV, Okonkwo, who also represents the Airline Operators of Nigeria (AON), criticised the heavy tax burden on domestic airlines. He highlighted that each ticket incurs over 20 different taxes, some of which are redundant. Despite the significant revenue the aviation sector generates for the government, Okonkwo expressed concern that these funds are not being reinvested to improve infrastructure and support for the industry.
He also pointed to the adverse impact of the foreign exchange rate, which is around N1,605 to one dollar, on local airlines. Operators are forced to purchase spare parts and repair aircraft in dollars, despite no increase in costs abroad.
“The government must create a supportive environment for the aviation sector, including access to affordable capital and a reduction in excessive taxes and charges, to prevent further increases in airfares,” Okonkwo stated. He noted that Nigeria remains among the highest-cost aviation markets globally, with local operators facing higher expenses than their international peers. The numerous deductions, up to 22 per ticket, further strain the industry.
Okonkwo also criticized the Nigerian Civil Aviation Authority (NCAA) for being one of the largest revenue contributors to the government without sufficient reinvestment into the sector. “The revenue collected from the NCAA comes at the expense of operators’ profits, which could otherwise be used to grow the industry. This situation harms both the industry and service quality,” he explained.
Despite these challenges, Okonkwo praised the resilience of domestic airlines, noting that their dedication has allowed them to weather significant obstacles. He also commended the NCAA’s leadership for upholding high safety standards, acknowledging that Nigeria boasts one of the most robust aviation regulatory bodies and exemplary safety records in the world.