Aviation

NCAA, NAMA disagree over proposed revenue sharing formula

NCAA, NAMA disagree over proposed revenue sharing formula

A proposed amendment to Nigeria’s aviation revenue-sharing formula has sparked a disagreement between the Nigerian Civil Aviation Authority (NCAA) and the Nigerian Airspace Management Agency (NAMA),...

Nigeria ends third-party visa processing in U.S., directs applicants to embassy, consulates

Aviation3 weeks ago

Nigeria ends third-party visa processing in U.S, directs applicants to embassy, consulates

The Nigeria Immigration Service (NIS) has terminated its partnership with Online Integrated Solutions (OIS Services), ending the company’s role as the official third-party provider for Nigerian...

NIS issues updated guidelines for contactless passport renewal for Nigerians abroad

Aviation3 weeks ago

NIS issues updated guidelines for contactless passport renewal for Nigerians abroad

The Nigeria Immigration Service (NIS) has released updated guidelines for its Contactless Passport Application System, providing Nigerians living abroad with a simplified process for renewing their...

Aviation3 weeks ago

Could you prove that bag is yours? The precautions that could protect you from a travel nightmare

By Elizabeth Nta For many travellers, what begins as a routine journey can quickly turn into a legal nightmare if their luggage becomes linked to...

Nigeria’s domestic aviation sector is under fresh financial pressure following the introduction of a new 5% federal levy on air tickets, intensifying concerns over rising operating costs, fragmented taxation, and expensive aircraft leasing arrangements that airlines say are threatening industry sustainability. The new levy, introduced as part of aviation revenue reforms, is collected alongside existing statutory charges imposed by multiple agencies. Airline operators say the additional deduction further compresses already thin profit margins in an industry already weighed down by high jet fuel prices, regulatory fees, and foreign-exchange–linked obligations. Industry stakeholders warn that the cumulative effect could push up ticket prices, dampen passenger demand, and worsen liquidity challenges for domestic carriers already struggling with cash flow constraints. Rising Tensions Between Regulators and Airlines The financial strain has coincided with renewed friction between the Nigeria Civil Aviation Authority (NCAA) and the Airline Operators of Nigeria (AON), following disputes over the remittance of statutory charges and the delivery of regulatory services. Operators say the situation reflects deeper systemic liquidity stress across the sector, where airlines are increasingly unable to meet overlapping obligations imposed by aviation agencies while maintaining operational stability. A Layered and Fragmented Tax System At the centre of industry complaints is what operators describe as a “multi-layered and excessive” taxation structure involving the NCAA, the Federal Airports Authority of Nigeria (FAAN), and the Nigerian Airspace Management Agency (NAMA). Airlines such as Air Peace, Ibom Air, and United Nigeria Airlines are subject to a range of compulsory charges, including the 5% ticket levy, passenger service charges, value-added tax on tickets and aviation inputs, and other operational deductions collected at different stages of the value chain. Industry players argue that the system creates cash flow distortions because several charges are collected upfront or deducted at source, leaving airlines with reduced working capital for day-to-day operations. Beyond ticket-based deductions, carriers also face landing fees, parking charges, overflight fees, navigation levies, and ground handling costs. Combined with jet fuel, which accounts for a significant share of total operating expenses, analysts say profitability on many domestic routes has been severely constrained. Leasing Constraints and Foreign Exchange Pressure Airlines’ challenges are compounded by difficulties in aircraft acquisition and leasing, which remain essential for fleet expansion in the absence of strong local financing options. Most carriers rely on wet and dry lease arrangements from international lessors. Wet leases, which include aircraft, crew, maintenance, and insurance, allow quick capacity deployment but are costly and typically paid in foreign currency. Regulatory limits also restrict their use to short-term arrangements. Dry leases offer more operational control and long-term stability but are increasingly difficult to secure. International lessors often view Nigeria as a high-risk environment due to concerns over aircraft repossession and currency volatility, resulting in higher insurance premiums, security deposits, and financing costs. As a result, airlines are frequently forced into short-term leasing agreements, exposing them to exchange-rate fluctuations and operational disruptions that contribute to flight delays and cancellations. Fuel Costs Deepen Financial Strain Jet A1 fuel remains one of the largest cost drivers in the sector, further squeezing margins across domestic routes. With fuel expenses, taxes, and leasing obligations combined, industry analysts say many airlines are operating with extremely narrow or unstable margins. Operators warn that without coordinated policy reforms, sustained profitability and expansion in the sector will remain difficult. Calls for Structural Reform Aviation stakeholders are calling on the federal government to streamline overlapping charges, review the newly introduced 5% levy, and consider removing VAT on aviation inputs to ease cost pressures. They are also advocating for reforms to centralise fee collection processes, improve transparency in regulatory charges, and support more stable aviation fuel supply mechanisms. In addition, industry groups are pushing for the development of a local aircraft leasing framework to reduce dependence on expensive international markets. Outlook While policymakers continue to explore potential incentives, including tax relief measures and leasing reforms, airlines say they are already adjusting operations through capacity cuts, route optimisation, and tighter financial controls. For now, Nigeria’s domestic carriers remain under significant pressure, navigating what industry players describe as one of the most financially challenging periods in recent years.

Aviation1 month ago

Heading through the storm: Multiple taxes, complex leasing drag on Nigerian carriers

Nigeria’s domestic aviation sector is under fresh financial pressure following the introduction of a new 5% federal levy on air tickets, intensifying concerns over rising operating...

Aviation1 month ago

Federal High Court orders Virgin Atlantic to pay ₦13m over wrongful denial of boarding

The Federal High Court sitting in Lagos has ordered Virgin Atlantic Airways Limited to pay over ₦13 million in damages and legal costs to a passenger,...

Aviation1 month ago

Airlines, NCAA clash over ₦20 billion ticket sales charge debt

A dispute between the Nigeria Civil Aviation Authority (NCAA) and domestic airlines over the remittance of statutory charges has exposed growing tensions within the aviation...

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NCAA, NAMA disagree over proposed revenue sharing formula

Nigeria ends third-party visa processing in U.S, directs applicants to embassy, consulates

NIS issues updated guidelines for contactless passport renewal for Nigerians abroad

Could you prove that bag is yours? The precautions that could protect you from a travel nightmare

Heading through the storm: Multiple taxes, complex leasing drag on Nigerian carriers

Federal High Court orders Virgin Atlantic to pay ₦13m over wrongful denial of boarding

Airlines, NCAA clash over ₦20 billion ticket sales charge debt