The Chairman of Air Peace, Allen Onyema, has warned that Nigerian airlines are operating under severe financial pressure, despite generating billions of naira in annual ticket sales.
Onyema said the high cost of borrowing, multiple taxes and aviation-related charges were making it difficult for airlines to remain profitable and sustain operations.
According to the Air Peace chairman, Nigerian airlines are sometimes forced to borrow money from banks at interest rates of about 30 per cent, while their annual profits can be less than $1 million. He argued that the situation was unsustainable for an industry that requires huge capital to operate and maintain aircraft.
He called for an urgent review of the financial obligations imposed on airlines, particularly the numerous taxes, levies and charges collected by government agencies and other aviation stakeholders.
Onyema’s concerns come amid wider complaints from operators over the growing cost of doing business in Nigeria’s aviation sector. The Airline Operators of Nigeria has also called for a review of the numerous charges imposed on domestic carriers, while other industry stakeholders have warned that the burden could undermine the growth of the sector.
The Air Peace chairman has previously warned that Nigerian airlines could struggle to survive under the prevailing economic conditions, citing rising operational costs and other pressures facing the industry.
The latest comments have renewed calls for government and aviation regulators to examine the cost structure of the sector and introduce measures that would enable local airlines to operate more sustainably.
For airlines, operators say the challenge is not necessarily a lack of passenger demand, but the high cost of financing, fuel, aircraft maintenance, taxes and other charges that consume a significant portion of their revenues.
