The Chief Executive Officer of Air Peace, Mr. Allen Onyema, has raised a grave alarm over the Federal Government’s proposed tax reforms, warning that if fully implemented, domestic airline ticket prices could skyrocket to as high as ₦1 million, while Nigerian airlines risk collapsing within three months.
Onyema’s warning, coming from one of the most influential figures in Nigeria’s aviation sector, has reignited concerns about the fragile state of the industry and the unintended consequences of fiscal policies on critical national infrastructure.
Onyema’s Warning
According to Onyema, the aviation industry is already burdened by multiple taxation, high operating costs, foreign exchange volatility and exorbitant charges imposed by various government agencies. He argued that introducing additional taxes under the new reform regime would push airlines beyond their survival threshold.
“If the new tax reform is implemented as proposed, ticket fares could rise to as much as ₦1 million, and Nigerian airlines may not survive beyond three months,” Onyema reportedly warned.
He explained that airlines operate on thin margins, and any further increase in taxes would inevitably be transferred to passengers, making air travel unaffordable for the average Nigerian while shrinking demand and crippling airline operations.
Matters Arising
1. Rising Cost of Air Travel
A potential ₦1 million domestic airfare would effectively exclude most Nigerians from air travel. This would reverse years of progress in making aviation accessible and could force passengers back to unsafe road travel, increasing road accidents and security risks.
2. Threat to Indigenous Airlines
Nigeria’s aviation sector has witnessed the collapse of several local airlines over the years, largely due to high costs and regulatory pressures. Onyema’s warning highlights fears that indigenous carriers—already struggling with fuel costs, aircraft maintenance abroad and FX scarcity—may be wiped out, leaving the sector dominated by foreign airlines.
3. Job Losses and Economic Impact
The collapse of Nigerian airlines would result in massive job losses, affecting pilots, engineers, cabin crew, ground staff and allied service providers. This would further strain an economy already grappling with unemployment and rising living costs.
4. Policy Contradiction
The warning raises questions about policy coherence. While government policies often emphasise support for local industries, excessive taxation could undermine indigenous airlines, contradicting broader goals of economic growth, local content development and national pride.
5. Need for Stakeholder Engagement
A key issue arising from Onyema’s statement is the apparent gap in consultation. Industry experts argue that meaningful engagement with aviation stakeholders is essential before implementing tax reforms that could destabilise a strategic sector critical to national integration and economic activity.
Calls for Urgent Review
Onyema and other industry players are urging the Federal Government to review the tax reform proposals as they affect aviation, harmonise existing charges, and adopt policies that support—not stifle—local airlines. They stress that aviation should be treated as an enabler of economic growth rather than a revenue-harvesting sector.
As debates over the tax reform continue, Onyema’s warning serves as a stark reminder that poorly calibrated fiscal policies could have far-reaching consequences. The coming weeks may determine whether Nigeria’s aviation industry is stabilised through reforms or pushed into another cycle of airline failures with devastating economic and social implications.
