At the unveiling of two Boeing 737-7800NG aircraft by United Nigeria Airlines (UNA) last week, aviation stakeholders charged the Federal Government to support indigenous carriers by reducing some of the charges and levies that have made Nigeria an expensive country to operate an airline business, OLUSEGUN KOIKI reports.

For many years, Nigerian airlines have continued to operate in one of the most challenging environments compared with their counterparts worldwide.

The country’s carriers spend billions of naira yearly on overseas aircraft maintenance, pilot and engineer training, fleet acquisition, insurance, and foreign-exchange operational expenses, yet government charges, which continue to climb, act as a major deterrent to investment.

Recently, the International Air Transport Association (IATA) ranked Nigeria as the most expensive country in the world to operate an airline.

Speaking at the IATA Annual General Meeting (AGM), in Brazil, IATA’s Regional Vice President for Africa and the Middle East, Kamil Al-Awadhi, said that despite ongoing efforts by Nigeria’s Minister of Aviation and Aerospace Development, Festus Keyamo, to reform and improve the aviation sector, airlines in the country still faced significant cost pressures.

According to him, the high-cost environment had made it difficult for Nigerian airlines to remain competitive and profitable, limiting the sector’s ability to reach its full potential.

He noted that excessive taxes, charges and other operational expenses continued to burden airlines across the region, with Nigeria ranking among the most challenging markets from a cost perspective.

To address the situation, Al-Awadhi urged member states of the Economic Community of West African States (ECOWAS) to implement the proposed 25 per cent reduction in aviation taxes and charges, which was expected to have taken effect in January this year.

This measure, he said, would help to lower the cost of air travel, stimulate passenger traffic and improve the competitiveness of airlines operating within West Africa.

The implication of a tough operating environment is far-reaching. Nigeria’s airlines are forced to contend with escalating operational costs while simultaneously trying to keep fares affordable for passengers.

Unlike many foreign airlines that enjoy government support, tax incentives, and access to low-interest financing, Nigerian carriers primarily rely on expensive loans at double-digit interest rates, which, unfortunately, increase their cost burden.

This situation, industry experts said, creates an uneven playing field in which local operators struggle to compete effectively with international airlines.

At the unveiling of two Boeing 737-800 Next Generation aircraft by United Nigeria Airlines (UNA) at the Murtala Muhammed Airport (MMA), Lagos, last week, industry experts and participants at the ceremony also raised the alarm of challenges confronting operators in the sector.

Different speakers emphasised that the future of Nigeria’s aviation industry lay in deliberate policy formulations and implementations by the government, aimed at supporting indigenous airlines.

They also warned that without this, the sector may continue to struggle to realise its full potential as a driver of economic growth, connectivity, trade and employment.

In his speech, the Chairman of UNA, Prof. Obiora Okonkwo, painted a stark picture of the realities confronting domestic operators.

Okonkwo confirmed Al-Awadhi’s statement that Nigeria’s airlines were operating in one of the most difficult aviation environments globally.

He therefore appealed to the government to revise the narrative by eliminating or reducing some of the charges currently imposed on operators.

For instance, he appealed to the government to review its revenue-sharing structure in the aviation sector by allowing aviation agencies to retain a larger share of internally generated revenue (IGR), rather than remitting most of it to the federation account.

According to him, the current arrangement leaves critical aviation agencies underfunded, limiting their capacity to provide the infrastructure and services necessary for efficient airline operations and thereby imposing unnecessary financial burdens on operators.

He said: “We are not happy that Nigeria is the most expensive place to operate for airlines, as said by IATA. We are hopeful that the government will listen to appeals for a reduction in charges.”

Also, in his comment, Executive Sales Director for Africa, Boeing, Moore Ibekwe Jr., warned that high interest rates were making it difficult for Nigerian airlines to compete globally.

He said that for the sector in Nigeria to compete, it must be on the global stage, excel in every sphere, and have funding available.

According to him, aviation is inherently a global business, and no airline could thrive if forced to rely on prohibitively expensive financing.

He observed that foreign competitors enjoy access to massive, cheaper capital (single-digit loans), allowing them to expand fleets, improve services and invest in technology at a pace Nigerian operators struggle to match.

According to him, Africa would require approximately 12,000 aircraft in the coming years to meet growing demand, making affordable financing indispensable for sustainable growth.

To the Chairman of Air Peace, Allen Onyema, supporting indigenous businesses was essential for national economic growth.

Onyema expressed that when the government begins to support indigenous investments, the country’s economy will start to make a meaningful impact and drive growth.

He emphasised that the success of one airline should be viewed as a victory for the entire industry and appealed to the government to shelve some of the charges.

“It is my prayer that all Nigerian airlines succeed. It is my prayer that no Nigerian airline should ever fall out of the sky again.

“We can compete and still be friends. We can compete and still do things the right way. But we need government support to succeed and continue to operate.”

Moreover, Onyema lamented Nigerians’ tendency to judge local airlines more harshly than foreign carriers.

He cited examples of serious operational disruptions involving foreign airlines that attracted little public attention compared to relatively minor incidents involving domestic operators.

According to him, passengers often overlook similar or even worse experiences abroad while quickly condemning local operators.

Onyema recounted instances in which foreign airlines delayed passengers for hours or experienced technical issues without facing the same level of public criticism as Nigerian carriers.

The Air Peace chairman urged Nigerians to support indigenous airlines while still holding them accountable to high standards of safety and service.

Also, an aviation expert, Charles Amokwu, said that government support for indigenous airlines was not about protectionism, but about creating a level playing field.

He expressed that such support for operators should include access to affordable financing, retention of aviation revenues within the sector, reduction of multiple charges, improved infrastructure, implementation of leasing initiatives, expanded international route opportunities and continued regulatory reforms.

Amokwu maintained that the unveiling of United Nigeria Airlines’ new aircraft was more than a corporate milestone, saying it was a symbol of what indigenous enterprise could achieve when allowed to thrive and supported by the system.

He said: “As Nigeria continues to seek to diversify its economy and strengthen non-oil sectors, aviation is one of the industries capable of driving transformation.

“Whether Nigeria’s airlines emerge as strong regional and global players may depend on one critical factor – the willingness of the government to consistently support and empower the indigenous operators carrying the nation’s flag in the skies.”

The importance of policies
However, the Federal Government said it has begun implementing policies to strengthen indigenous operators.
The Minister of Aviation and Aerospace Development, Festus Keyamo, said at the event that every aviation policy currently being formulated was evaluated based on its impact on indigenous operators.

The minister emphasised that Nigeria may not currently have a national airline, but it possesses several indigenous carriers that effectively serve as flag bearers for the country.

Keyamo further mentioned reforms, including the implementation of the Cape Town Convention and the Irrevocable Deregistration and Export Request Authorisation (IDERA), measures designed to boost investor confidence and facilitate aircraft acquisition.

According to him, these reforms had encouraged financial institutions to reconsider aviation financing after years of reluctance.

He also mentioned presidential approval for a national aircraft leasing company as one way to ease operations for indigenous airlines.

The initiative, according to him, is expected to provide government-backed guarantees that would enable Nigerian airlines to access aircraft under more favourable lease arrangements.

Keyamo also observed that foreign carriers accounted for about 90 per cent of the country’s international passenger market, saying this translated into huge revenue outflows.

To reverse the sordid situation, he explained that the government was exploring opportunities to allocate more international routes to indigenous operators.

Such opportunities, he posited, would allow local carriers to retain more passenger revenue within the country, while strengthening their global competitiveness.

The minister discussed that the government was also pursuing plans to transform Lagos into a major regional aviation hub connecting West and Central Africa.

“Once this is done, the initiative will significantly boost passenger traffic and create new growth opportunities for Nigerian airlines,” he said.