No Nigerian airline made $1 million in profit in 2025, according to Air Peace CEO Allen Onyema, who said high operating costs continue to leave local carriers with thin profit margins. Onyema made this known while delivering the keynote address at the 30th annual conference of the League of Airport and Aviation Correspondents (LAAC) in Lagos on Thursday, themed “Towards a Sustainable Aviation Industry: Balancing Government Revenue Demands with Sector Growth.”
He said expensive aviation fuel and numerous taxes, fees and charges are putting significant pressure on airline finances, making it difficult for operators to remain profitable and competitive. What Allen Onyema is saying
Onyema said Air Peace, Nigeria’s largest airline, could not make $1 million in profit in 2025 and questioned whether any other Nigerian carrier achieved that level given the cost of operations. “If Air Peace, the biggest carrier and the biggest revenue generator, could not make $1 million in profit at the end of 2025, I don’t think there is any other airline that would have done so. None of them.
It is as bad as that,” Onyema said. He said the direct operating cost of running an airline in Nigeria is about N180,000 per seat, while aviation fuel accounts for more than 40% of operating costs. Onyema also said airlines face about 54 taxes, fees and charges across the NCAA, FAAN, NAMA and the Nigeria Revenue Service, with several charges directly built into passenger tickets. He said the cumulative cost makes it difficult for airlines to keep fares affordable while maintaining sustainable margins. High costs weigh on passenger demand
Onyema said the cost of taxes, fees, charges and aviation fuel is ultimately reflected in higher ticket prices, which can weaken passenger demand. He said high fares are increasingly pushing middle-class passengers away from air travel, despite the security risks associated with road transportation. Companies and government agencies have also reduced travel budgets, with some replacing trips between Lagos and Abuja with virtual meetings.
Six major charges are directly built into tickets, including Passenger Service Charge, CUTE charge, Passenger Terminal Facility Charge, 5% Ticket Sales Charge, 5% Excess Baggage Charge and a $20 security levy. An APIS levy of $11.50 was introduced in December 2025. Onyema said these charges can add about N25,000 to domestic tickets, while international charges can reach $150 to $180. He said the resulting cycle of higher costs, higher fares and weaker demand makes it harder for airlines to generate sufficient profits to reinvest in their operations. LAAC seeks stronger industry consultation
LAAC Chairman Suleiman Idris called for stronger engagement between government, aviation agencies, airlines, airport operators, labour and other stakeholders before major fiscal and regulatory decisions affecting the industry are implemented. He said the issue was not whether government should generate revenue from aviation, but how much the sector could reasonably bear without undermining its growth. “The more important question is: How much revenue can the sector reasonably bear without undermining its capacity to grow?” he said.
Idris also called for meaningful consultation with industry stakeholders, particularly on the 5% Ticket Sales Charge, Cargo Sales Charge, infrastructure development and the use of funds collected from aviation operators. He said consultation should involve dialogue before policies are finalised rather than simply informing operators of decisions that have already been taken.
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What Onyema wants government to do
Onyema called for the harmonisation of aviation taxes and levies to eliminate multiple and overlapping charges on airlines. He also asked the National Assembly to scrap the existing 5% Ticket Sales Charge, Cargo Sales Charge and charter sales charge and replace the percentage-based system with a fixed unit cost per ticket. He said a fixed charge would provide airlines with a more predictable cost structure. He cited the reduction in corporate income tax from 30% to 25% under recent tax reforms as a positive development. He called for further measures to eliminate double taxation across the aviation industry.
He supported greater use of public-private partnerships to upgrade airport infrastructure and safety facilities. Onyema said aviation should be treated as an economic catalyst rather than primarily as a source of government revenue because a stronger industry supports tourism, trade, employment and other businesses. Get up to speed
Nairametrics had earlier reported that United Nigeria Airlines’ Chief Commercial Officer, Adedayo Olawuyi, also called for lower aviation charges and taxes to make air travel more affordable. Olawuyi made the call while speaking at the AeroWest conference in Lagos, where he said high financing costs, low passenger demand on some regional routes and other operating pressures were making it difficult for domestic airlines to sustain their businesses.
“How many of you would take a loan of 30% to invest in a business that gives you less than 5% profit?” Olawuyi asked. He also warned that excessive demands on airlines could undermine the sector’s long-term sustainability. What you should know
West Africa has the highest average tax on air passengers in Africa, at about $110 per departure, compared with $32 for comparable short regional journeys in Europe, according to the Atlantic Council. The International Air Transport Association has also identified Nigeria as one of the more expensive markets in which to operate an airline. The Atlantic Council’s August 2026 brief identified high taxation, restrictive regulation, blocked airline revenues and fuel import dependence as major barriers to aviation growth. The Centre for the Promotion of Private Enterprise said taxes, fees and regulatory levies can account for as much as 35% of airline revenues.
ECOWAS announced plans in December 2025 to abolish air ticket taxes across the sub-region from January 1, 2026, to reduce airfares and improve connectivity. As of September 2026, the proposed abolition had not taken effect. The continued pressure from taxes, charges, fuel and other operating costs remains a major concern for Nigerian airlines seeking to improve profitability while keeping air travel affordable.
