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By Chinelo Obogo
The national president of the National Association of Nigerian Travel Agents (NANTA), Yinka Folami, has questioned recent claims about the number of taxes embedded in airline tickets, calling for a proper investigation into fare pricing in the aviation sector.
Speaking as a guest panelist on Creative Naija TV, Mainland FM on Thursday, Folami addressed two key issues which he said have dominated discussions about airline ticket pricing: seasonal fare increase and reports that airlines pay up to 18 government taxes per ticket. On the first issue, Folami stated that government taxes are not responsible for seasonal price increases. He said that airlines make business decisions based on seasonal demand factors that are separate from government taxation.
He said: “There are two issues at play. The first is that government taxes are responsible for the seasonal hikes, and our answer is no, because for example in December, the government didn’t increase taxes. In June, you could buy a ticket to Abuja for ₦145,000, but in December, you buy the same ticket for ₦255,000. And now, if you check the cost of flight for January to February, you would see that a one-way ticket has gone down to ₦125,000. So we need to end the speculation that government taxes are responsible for the seasonal hikes. Some of the airlines had taken business decisions that are outside government taxes because of the season.”
Addressing the second issue, Folami expressed skepticism about claims that airlines pay 18 taxes per ticket, stating that this contradicts NANTA’s industry experience: “The second issue is the assertion that there are 18 government taxes on every ticket. NANTA is 50 years old, and in our 50-year experience, that assertion is new to us. I am not saying that it is not true; I am only saying that that assertion is new to us.
“When you scan an average domestic ticket, you will find about four taxes. You will find QT, which goes to the fund. You will find NG, which goes to the government—that’s the CAA. You will see the basic fare, which is supposed to accommodate the airline costs and margins, and then you will see something called YQYR.
“An assertion has been made that airlines pay about 18 airline taxes, so we need to come together for that assertion to be deconstructed. There is a Nigerian ticket which has a total cost of ₦360,000, and it pays tax of ₦9,000 to FAAN, it pays ₦16,500 to the government, and the basic fare that goes to the airline is ₦46,000, while the YQYR is ₦288,000. What this shows is arbitrariness. YQYR is an emergency task that is applied by airlines, and it is being arbitrarily applied. It is this arbitrariness in the application of taxes that we should look at. If we address the issue of arbitrary imposition of taxes, everyone would be settled, and it would be in the interest of the government, the airlines, and the flying public.”
