The Chairman of Air Peace, Allen Onyema, has called for an urgent review of taxes, charges and other financial obligations imposed on airlines in Nigeria, warning that borrowing costs of up to 30 per cent are making it increasingly difficult for carriers to survive and compete.
Onyema made the call while speaking at the 30th Annual Conference of the League of Airport and Aviation Correspondents (LAAC) in Lagos, themed “Towards a Sustainable Aviation Industry: Balancing Government Revenue Demands with Sector Growth.”
The Air Peace chairman argued that the persistent challenges confronting Nigerian airlines could not be addressed without listening to the concerns of operators and creating an environment that supports their survival and growth.
He questioned why Nigeria continues to experience a high rate of airline failures despite many airline owners having successful businesses outside aviation.
“Why do we have the highest mortality rate of airlines worldwide?” he asked, arguing that the challenges were deeper than simply attributing airline failures to poor governance.
According to him, airline operators are frequently advised to be resilient despite operating in what he described as an “extremely hostile environment.”
He said complaints by airlines about excessive revenue demands from government and aviation agencies should not be interpreted as attacks on individuals or institutions.
“When the airlines cry about issues of excessive revenue demands from government agencies or aviation agencies, we are being treated with a lot of disdain,” he said.
Onyema called for an open-minded approach by government agencies, ministries and other stakeholders in addressing the challenges facing the industry.
He said the Airlines of Nigeria had consistently advocated greater access to capital and a review of the bills, charges and taxes imposed on airlines.
“Unless and until that is done, forget it, airlines will continue to wobble and stumble in this country,” he warned.
Onyema also painted a grim picture of airline profitability, saying the financial returns in the industry were significantly lower than commonly perceived.
“Go and look at the books of these airlines. I don’t think there is anyone that makes over a million dollars every year as profit, none of them,” he said.
He claimed that even Air Peace, which he described as Nigeria’s biggest carrier and revenue generator, did not make $1 million in profit at the end of 2025.
“It is as bad as that,” Onyema said, stressing that airlines were nevertheless making significant contributions to employment and the wider economy.
He argued that the industry’s contribution should be considered when government agencies determine the financial burdens placed on operators.
Onyema cited International Air Transport Association (IATA) figures indicating that aviation contributes about $2.5 billion annually to Nigeria’s Gross Domestic Product (GDP) and supports more than 217,000 jobs.
He said aviation’s economic impact extends beyond airlines to supply chains, tourism, hospitality and other interconnected sectors.
“Aviation is a vital economic catalyst for any country, including Nigeria,” he said.
The Air Peace chairman also pointed to the role played by national airlines in the economic development of countries such as Ethiopia and the United Arab Emirates.
He cited Ethiopian Airlines, Emirates and Etihad as examples of airlines that received significant support and served as catalysts for national and economic development.
“I don’t think there would be an Ethiopia without Ethiopian Airline. There would not be Dubai without Emirates, and there would not be UAE without Etihad,” he said.
30% borrowing cost puts airlines at disadvantage
Onyema further highlighted the disparity between financing available to Nigerian airlines and their international competitors.
According to him, Nigerian airlines borrow from local banks at interest rates that can reach 30 per cent, although rates have recently declined to around 29 per cent.
He said the high cost of financing makes it difficult for Nigerian airlines to acquire aircraft and compete with foreign carriers whose financing costs can be as low as three or four per cent.
“We are expected to compete at the same level with the other people who are getting their financing at 3% and 4%. What kind of country are we in?” he asked.
He said airlines have also presented evidence of their financing costs to aircraft manufacturers and other Original Equipment Manufacturers (OEMs) to demonstrate the difficult financial environment in which Nigerian carriers operate.
Onyema maintained that airlines cannot sustainably operate on profit margins of five per cent or more, stressing that the economics of the industry are particularly challenging in Nigeria.
The Air Peace chairman clarified that airlines were not opposed to funding government agencies or the collection of legitimate revenues.
Rather, he called on government to ensure that revenues generated from the aviation industry are retained and reinvested in the sector.
“Let me make this clear. The airlines of Nigeria, we are not against funding the government agencies. We support them,” he said.
He urged government to allow revenues accruing to aviation agencies to remain available for the development of the industry, arguing that reinvestment would strengthen infrastructure, airspace management and regulatory capacity without placing unsustainable pressure on airlines.
Onyema said the debate over aviation sustainability must therefore encompass both the economic survival of airlines and the financial sustainability of airport operations, airspace management and regulatory institutions.
He stressed that the objective should be to fund critical aviation institutions without choking the airlines that drive the sector’s growth.
