Air Peace Boss Raises Alarm Over New Tax Rules, Says Airfares Could Hit ₦1m
Story: written by Uzuh Rita December 29,2025
Chairman and Chief Executive Officer of Air Peace, Allen Onyema, has cautioned that Nigeria’s aviation industry is facing a serious threat, warning that newly introduced taxes and levies could drive domestic airfares as high as ₦1 million and push major airlines out of operation within months.
Onyema made the disclosure during an interview on ARISE NEWS on Sunday, where he described the sector as being overwhelmed by numerous and overlapping charges imposed by government agencies and regulators.
He explained that airlines retain only a fraction of ticket revenues, noting that from an average ₦350,000 fare, carriers are left with about ₦81,000 after statutory deductions, fees, and charges are applied.
According to Onyema, the reintroduction of Value Added Tax (VAT) and customs duties has worsened the situation. He recalled that the 2020 Finance Act had removed VAT on ticket sales and imported aircraft parts, offering some relief to operators, but said the new tax regime has effectively reversed those benefits.
He pointed out that airlines are already required to remit five percent of every ticket sold to the Nigerian Civil Aviation Authority (NCAA), while the new rules impose an additional 7.5 percent VAT on aircraft purchases and spare parts. Onyema added that when these costs are combined with bank interest rates of up to 35 percent, the financial pressure becomes unsustainable, especially for aircraft valued at around $80 million.
The Air Peace CEO argued that the policy runs contrary to International Civil Aviation Organisation (ICAO) standards, which recommend that aviation authorities operate on a cost-recovery basis rather than treating the industry as a major revenue source.
He warned that a collapse of the aviation sector would have ripple effects across the economy, including stress on the banking system, reduced national connectivity, and widespread job losses. Onyema said many airlines are highly indebted and could shut down within three months if urgent action is not taken.
Despite engagements by the Airline Operators of Nigeria (AON) with the National Assembly and the tax reform committee, Onyema expressed concern that the industry’s data-backed submissions have yet to translate into policy relief.
