Allen Onyema, Air Peace Chairman and CEO, has warned that Domestic Flights could cost up to N1 million naira in January 2026
Allen Onyema, Air Peace Chairman and Chief Executive Officer (CEO), has hinted at the prices of domestic flights that may rise up to one million naira following the new tax laws imposed on businesses.
Speaking at an interview with ARISE TV on Saturday, Onyema has called for government intervention to prevent an aviation industry-wide crisis on domestic flights, as the new tax laws may push domestic flights to hit one million naira, thus resulting in less patronage and forcing some airlines to shut down.
He further stated that the industry is currently being stretched by current taxes, levies, rising operational costs, and interest on loans. Any further financial burden on the aviation industry could result in a collapse, which would affect the economy.
The Air Peace CEO also took his time to discredit the rumors that airlines are profiting heavily from the high fares on domestic flights and international flights. He stated that just a small portion comes to the airlines.
Onyema said, “Take a ticket of about ₦350,000. What comes to the airline is about ₦81,000,” he said, stressing that deductions and statutory charges swallow most of the fare.”
He spoke about the mandatory five percent deduction on all tickets by the Nigerian Civil Aviation Authority (NCAA), and even beyond the NCAA fees, there are other levies and fees that are also embedded in passenger tickets.
According to Onyema, this goes to show that this approach contradicts international best practice, noting that the International Civil Aviation Organisation (ICAO) recommends cost recovery rather than revenue generation.
“You charge according to the cost of the services you render. That’s not what is happening here, and that’s why airlines are not growing,” he said.
He also stressed that airlines are borrowing between 30% and 35% while being taxed at 7.5%, and with the new tax laws, this would eventually make the airlines pass the cost to passengers, resulting in a rise in the price of domestic flights.
Onyema said, “At 35 per cent interest, we are choking,” he said, warning that airlines would inevitably pass the cost to passengers.
“If we implement that tax reform, Nigerian airlines will go down in three months. Some will go down in one month,” he said, adding that banks heavily exposed to the sector would also feel the shock.”
He went on to praise President Bola Tinubu’s willingness to listen to industry stakeholders but also urged him to make a return to the 2020 tax framework, warning that the cost of inaction could be catastrophic for Nigeria’s aviation sector and economy.
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