For yet another time, the International Air Transport Association (IATA) has identified Nigeria as one of the most expensive countries globally for operating an airline business. The association pointed to elevated operational costs that persistently undermine the viability and expansion of domestic carriers.
IATA's Remarks at AGM in Brazil
Speaking yesterday at the IATA Annual General Meeting (AGM) held in Brazil, the association's Regional Vice President for Africa and the Middle East, Kamil Al-Awadhi, stated that despite ongoing reform efforts by Nigeria's Minister of Aviation and Aerospace Development, Festus Keyamo, to enhance the aviation sector, airlines in the country continue to face substantial cost burdens. Al-Awadhi noted that the high-cost environment has made it challenging for Nigerian airlines to stay competitive and profitable, thereby limiting the sector's ability to realize its full potential.
Excessive Taxes and Charges
Al-Awadhi emphasized that excessive taxes, charges, and other operational expenses persistently weigh down airlines across the region, with Nigeria ranking among the most challenging markets from a cost perspective. To tackle this issue, he urged member states of the Economic Community of West African States (ECOWAS) to adopt the proposed 25 percent reduction in aviation taxes and charges. He explained that such a measure would help lower the cost of air travel, stimulate passenger traffic, and enhance the competitiveness of airlines operating within West Africa.
Local Airline Executive's Concerns
Recently, the Chairman of United Nigeria Airlines (UNA), Professor Obiora Okonkwo, described Nigeria as one of the most over-taxed aviation jurisdictions on the continent. He argued that this situation continues to drive up ticket prices and distort competition in West Africa's airspace. Okonkwo lamented that the cumulative levies imposed on airlines in Nigeria far exceed those faced by operators in neighboring countries.
He said: "A passenger tax here in this airport is $100. In Ghana it's $60. I don't know why ours should be higher. Nigeria is probably one of the most taxed countries in Africa's aviation industry. Beyond passenger tax, there are so many deductions we make on every ticket sold. That is why fares are high."
Impact on Ticket Prices
According to Okonkwo, when all charges are aggregated, a Lagos-Accra return ticket carries about $116 in taxes alone, before the airline even prices the actual "flight service" component. He urged the government to play its part by reducing multiple taxes and creating a single-window approach to aviation finance, warning that high charges ultimately suppress economic activity. "If people cannot move, commerce cannot expand," he emphasized.
