August 08, (THEWILL) — The Chairman/Chief Executive Officer of Air Peace, Dr Allen Onyema, has raised the alarm about the possible demise of airlines if the current tax regime is allowed to continue.
Onyema said that with a very small profit margin, the five percent airlines pay for ticket fares to the Nigerian Civil Aviation Authority (NCAA) is affecting the airlines.
The operator gave the hint while speaking during the 2025 League of Airports and Aviation Correspondents (LAAC) Conference held on the 7th of August, 2025, in Lagos, with the theme: “Aviation Financing in Nigeria: The Risks, Opportunities and Prospects”.
He said, “So it is not as if you do not make a profit at all, but what is the margin of this profit? Again, taxation. The airline is going to have a tax death. We pay a lot of charges. And I keep on saying it, and I will say it as AON. The 5% we pay for ticket fares to the NCAA is affecting the airlines. Because you don’t make 5% gain. And they will tell you that money does not belong to you. It is the money you’re collecting from passengers, on behalf of us. No. It is already limiting your ability to charge for the tickets that you truthfully deserve. You can collect it directly from the passenger, so that whatever we collect from passengers will belong to us. So I am not saying that we should not pay anything to the government, but it has to be cost recovery. Even the ICAO principle is about cost recovery. What we are doing here today is a matter of legislation.
“The five per cent has been legislated. And even now, in current tax reforms, I don’t know who put it there, that we have to go back to the regime of paying customs duties for imported aircraft, customs duties for imported spare parts, VAT of 7.5% for imported aircraft, and even ticket fares. The airline would die within 48 hours.”
He, however, expressed happiness that the Minister of Aviation and Aerospace Development, Festus Keyamo, has taken it up, warning that if Customs duties on imported aircraft parts, VAT and other taxes are ever implemented from January next year, airlines would die.
Speaking about airlines’ performances, Onyema said, “Yes. The truth is, it could be better. When you talk about deliverables to the stakeholders, you have to look at the amount of investment, and then, whatever you are getting back, is it commensurate with the amount you have invested? If you invest $100 million in aviation, maybe at the end of the day, you are expecting 3% profit or 5% profit. If you take $100 million to agriculture or to importation, you may get up to 70% profit at the end of the day.
On the National carrier, Onyema said, “I have heard all this talk about the national flag carrier. It is a moribund idea all over the world. The government has no business doing business. It will fail like a pack of cards. The government has no business doing business. We can’t continue to do this to ourselves. And people are listening and thinking that is the truth. No.
“Air Peace is far bigger than some national carriers in Africa. Far bigger. Three times bigger. Do you know what it took Air Peace to go to London for seven years? You are fighting both internal conspiracies. You are fighting a foreign conspiracy. My country is stigmatised. What we should continue doing is to elevate our own. And we are carrying the burden of the entire industry. Because if we fail, the industry will continue to fail. It is my prayer. And may God Almighty accept my prayer that every Nigerian life should succeed.”
On alliances within the domestic carriers in the country, the Air Peace boss maintained that it is not true that Nigerian operators don’t cooperate with each other, emphasising that a Spring Alliance is already existing amongst the airlines.
“We do have alliances and cooperation. It is called Spring Alliance. If I have a problem, I can call Overland and take my passengers. It is happening. I don’t have to say it out loud. It is happening.
“The problem is that, remember, at any time you are calling the other airline, they may be full also. And we help each other. We do it”, Onyema stated.
Anthony Awunor, is a business correspondent who holds a Bachelor of Arts Degree in Linguistics (UNILAG). He is also an alumnus of the Nigerian College of Aviation Technology (NCAT), Zaria Kaduna State. He lives in Lagos.
