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•Domestic operators lose N32.4bn yearly to aircraft underutilisation
By Chinelo Obogo
For decades running, Nigerian airlines have lamented a predatory operating space where sky-high charges, taxes and levies put them at a highly disadvantaged position compared to their foreign competitors who enjoy greater support from their host countries.
This, they said, grossly erodes their profitability and perpetually leaves them vulnerable.
The perennial challenge, which seems to have defied solutions, was again raised on the second day of the 2025 Federal Airports Authority of Nigeria (FAAN) National Aviation Conference (FNAC) held this week in Lagos, themed, “Elevating the Nigerian Aviation Industry Through Investment, Partnership and Global Engagements,”. At the event, the Managing Director of Ibom Air, George Uriesi, said that without a reduction in the number of charges, domestic airlines will not be profitable and will keep folding up after a relatively short operating cycle.
Uriesi, who presented a paper titled “Airline Profitability and Cost Optimisation,” enumerated the costs they have to bear, with aircraft acquisition taking a huge chunk of operating costs. Though he acknowledged the efforts made by the Federal Government in waiving import tariffs on aircraft parts, he said that Nigerian airlines pay high insurance costs despite the fact that they use the same equipment type as their international competitors. He said that Nigerian airlines pay twice the insurance cost compared to their peers and that they also operate in a very difficult environment with infrastructural limitations.
Citing the Lagos–Accra route as an example of how high the charges are, he said that before any airline fixes the price of its ticket, it already has taxes worth $185 to pay. He then pointed out that by December 1, 2025, the Nigerian Civil Aviation Authority (NCAA) would add additional taxes which will bring the cost of the charges they have to pay to $200. When other costs such as fueling, ground handling, and overflying charges are added, the ticket price would have gone beyond the reach of the average Nigerian.
He also pointed out that while airlines earn in naira, their major costs, such as maintenance, insurance, and purchase of spare parts, are carried out in dollars. In addition to that, they are expected to pay Value Added Tax (VAT), pension contributions, and contribute to the National Social Insurance Trust Fund (NSITF) and the Industrial Training Fund (ITF). He then advised airlines that, in order to compete and remain profitable, they should not stay small for too long as it will be a disadvantage to their operations.
While comparing the challenges that Nigerian airlines face with their competitors, he said that European carriers can secure aircraft financing at three or four percent interest for over 15 years, while Nigerian operators often pay around 30% interest for a maximum of seven years. “The same Airbus A220 my colleague in Europe pays $100 monthly for, I am paying $500,” Uriesi said.
He also revealed how the cost of maintenance abroad has become unsustainable. Any airline that wants to carry out C-checks should have a minimum of $1.5 million, but it often rises to between $3 and $4 million once the checks are completed. Uriesi also spoke on how Nigerian airlines suffer losses from the underutilization of their aircraft. He said that while international airlines usually use their aircraft for up to 10 hours per day, the average time in which Nigerian airlines use theirs is between five to six hours a day, which results in 720 fewer flights per aircraft annually. With each flight generating approximately N5 million, he said the annual loss suffered is N3.6 billion per aircraft. Ibom Air, with nine aircraft, loses about N32.4 billion annually from underutilization alone.
Uriesi is not a lone voice in this cry for help.
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Last week, the Chairman of United Nigeria Airlines, Prof. Obiora Okonkwo, said multiple charges are suffocating domestic airlines and called on the Federal Government to intervene before they are taxed to death. Okonkwo, who is the spokesperson of the Airline Operators of Nigeria (AON), lamented that the situation is worsened by airlines having to pay for every government service, from inspections to certification renewals. At the event marking the UNA Nigeria–Ghana inaugural flight, which held last week, Okonkwo said that the most pressing challenge remains the lack of access to affordable financing. According to him, the AON is demanding single-digit loans and a special forex window as a breather. He said that domestic carriers want the government to recognise aviation as a vital economic pillar and catalyst, not just a business for the owners.
The issue of multiple charges, levies, and taxation is also a problem on the African continent and is not limited to Nigeria. An aviation consultant and former Managing Director of Africa World Airlines, Sean Mendis, who penned a piece in *VoyagesAfriq* last week, said that across the continent, policymakers still behave as if air travel is a luxury for the elite that should be priced and taxed accordingly, and that when taxes and fees swell the final ticket price beyond the reach of ordinary travellers, demand shrinks into the subset of those who can absorb the pain.
He said: “The ‘tax’ that strangles demand isn’t a single line item. It’s a stack: passenger taxes and levies, airport and air navigation service charges, security and health surcharges, visa and insurance fees. Then there are the quasi-taxes—opaque border controls, duplicative inspections, and compliance schemes priced far above the cost to deliver them. Each layer may look modest in isolation, but together they build a wall that many would-be passengers choose to never climb. “Consider Tanzania. In 2024, visitors to Zanzibar were hit with a mandatory health insurance fee. Despite the modest extra charge, tourist numbers still grew, a testament to Zanzibar’s strong pull and pent-up demand. Emboldened, a similar scheme is now being expanded to mainland Tanzania. On top of that, a new airport tax is being introduced for international travellers, ostensibly to fund a digital border control system, but priced well above the apparent cost of the system itself. By 2026, every visitor will be paying roughly $200 more than they were in 2024. Is tourism demand for Tanzania so inelastic that it can absorb increase after increase indefinitely? Time will tell, but history usually turns out to be less forgiving than budget projections.
“Kenya, too, is reviewing airport taxes upward. Nigeria has signaled increases to fund an Advance Passenger Information (APIS) system. Let’s be clear: funding modern systems and better infrastructure is not optional. The question is whether we can calibrate the price of progress without pricing out the very travellers and airlines who are supposed to benefit. Push too far and you end up taxing the promise out of the project.
“Sierra Leone is a cautionary tale hiding in plain sight. Freetown today boasts a gleaming new terminal, a new national airline, and an industry unrecognisable from the dark days of conflict two decades ago. Yet the market remains stifled by high charges and user fees. Fly the 40-minute hop from Freetown to Monrovia and back: you will pay around $450 in taxes and fees on top of the ticket itself. For airlines, the stack at Freetown, landing fees, ground handling, fuel, and so forth, can be double or triple those at other airports in the region.
Regulators defend the regime as the cost of recouping private investment in infrastructure, but the end result is an airport that is underserved and underutilised. Build it and they will come, unless you charge so much at the gate that they turn back and go home instead.
“Now, flip the coin. Ghana shows how underpricing a core user fee can also backfire. For various reasons, the domestic Air Passenger Service Charge has been stuck at 5 cedis, about forty US cents, for well over a decade. The intent was affordability, but the consequence has been underfunded operations. Ghana Airports Company Limited (GACL), struggling to cover basic costs at domestic airfields, constrained operating hours for years until recently to save on electricity bills and labour costs, dimming the network at precisely the hours when connectivity matters for commerce. A fee that never moves may be politically comfortable, but it can leave infrastructure and service quality frozen in time too.
“So, where’s the sweet spot? It starts with acknowledging that aviation is an economic enabler first and a revenue line second. If your goal is full planes, frequent schedules, and thriving tourism, you don’t treat your passenger like a dairy cow ready to be milked. Aviation generates every kind of revenue that governments say they want, VAT on downstream tourism, corporate taxes from a busier value chain, jobs that generate income tax, and yes, even sustainable airport surpluses to service debt. The fastest way to collect more is often to charge less and let growth do the heavy lifting.”
Mendis said Africa cannot afford to treat the sky as a cash register and the passenger as an ATM. He said the continent has built better terminals, safer systems, smarter airlines, and more professional regulators than ever before, and what it needs is “the courage to price connectivity for what it is, a necessity for a modern economy, not a gilded indulgence.”
