The Chief Financial Officer (CFO) of Aero Contractors, Charles Grant, has warned that excessive taxation and policy inconsistencies are crippling Nigerian airlines and threatening the sector’s capacity to contribute meaningfully to the economy.
Speaking at a retreat organised by the Nigeria Civil Aviation Organisation (NCAA) in Lagos with the theme: ‘Strengthening Collaboration for Revenue Optimisation and Operational Efficiency,’ Grant said the government’s current fiscal approach was extractive rather than enabling.
He insisted that the sector could not survive under its present tax burden. According to Grant in his paper, ‘Fiscal Turbulence: Why Enabling Nigerian Airlines is Essential to Growing the Tax Base,’ the aviation industry was not a luxury, rather a platform for commerce, trade, and integration.
“One cannot tax what doesn’t survive. “You have to enable before you extract,” he said. Grant in his statistics revealed that domestic passenger traffic had dropped by about three per cent since 2022, despite increasing travel demand in a country of over 200 million people.
He attributed this decline to multiple taxes and rising operational costs, which he declared had pushed ticket prices beyond the reach of average travellers.
He explained that airlines currently pay several levies, including Ticket Sales Charge (TSC), Passenger Service Charge (PSC), Value Added Tax (VAT), customs duties, navigation and overflight fees and ground-handling charges.
These costs, he stated, made it difficult for the operators to remain profitable or expand their route networks. He said: “Passengers are being priced out while airlines operate on razor-thin margins. The outcome is fewer flights, grounded aircraft, and job losses across the value chain.”
Grant observed that while local carriers continued to struggle, foreign and regional airlines such as ASKY, RwandAir, Air Côte d’Ivoire and Ethiopian Airlines had built profitable networks, using Nigerian routes and passengers.
He described this as a strategic leakage, noting that the economic benefits tied to Nigerian demand, including maintenance contracts, training and forex earnings, are being captured abroad.
He, however, insisted that the indigenous operators were not asking the government for protectionism, rather were appealing to the government to formulate policies that allowed the country’s airlines to compete fairly using Nigerian demand.
He further criticised recent changes under Nigeria’s new Tax Act which is expected to commence from January 1, 2026, including the removal of the zero-VAT status for international travel and ambiguous definitions of taxable supplies that had created uncertainty over aircraft leases and spare parts.
He regretted that customs delays and inconsistent application of waivers continued to ground aircraft for weeks, thereby worsening airline losses.
He appealed to the government to restore VAT exemptions on aviation inputs, enforce customs waivers and eliminate overlapping taxes that make air travel more expensive in Nigeria than in most African markets.
Citing examples from Ethiopia and Rwanda that treat aviation as strategic infrastructure, Grant said Nigeria must reorient its fiscal policies to support growth, not suffocate it.
