Taxes consume 35% of airline revenues – CPPE

Nigeria’s aviation sector is under growing strain as taxes, charges and regulatory levies consume up to 35 per cent of airline revenues, the Centre for the Promotion of Private Enterprise (CPPE) has warned.

In a statement on Sunday, Muda Yusuf, the organisation’s Chief Executive Officer said the heavy cost burden imposed by aviation agencies is eroding profitability and threatening the survival of domestic carriers.

The CPPE noted that multiple charges from regulators including the Nigerian Civil Aviation Authority, Federal Airports Authority of Nigeria and Nigerian Airspace Management Agency have created a difficult operating environment for airlines already grappling with thin margins.

“Industry estimates suggest that these charges collectively account for as much as 35% of airline revenues, a level that is clearly incompatible with the economics of the aviation business,” Yusuf said.

He stressed that the sector remains critical to economic growth, trade and national connectivity, warning that excessive charges could lead to higher ticket prices, weaker service delivery and potential safety risks if operators cut costs aggressively.

The group acknowledged the Federal Government’s recent 30 per cent relief on statutory fees owed by airlines but said the measure offers only temporary respite.

According to the CPPE, broader structural reforms are needed to reduce the multiplicity of charges and create a more sustainable operating environment for airlines.

Nigeria’s aviation industry has long struggled with high operating costs, exacerbated by rising fuel prices, foreign exchange volatility and limited access to financing, factors that have forced several domestic carriers out of the market in recent years.