Allen Onyema, chief executive officer (CEO) of Air Peace, has said passengers in Nigeria still enjoy the cheapest domestic airfares globally, despite the high operating costs faced by local airlines.
Onyema made the assertion during an interview with Arise News on Sunday, where he compared domestic air travel costs in Nigeria with those in the United States. According to him, even short-haul flights abroad attract significantly higher fares.
He cited a one-hour journey between Atlanta and Charleston in the US, noting that such flights can cost more than $400.
“Do one way, you will get $399 for two weeks time, maybe in the morning. In the afternoon, it’s about $400 and something, but the basics is $399,” he said.
Onyema explained that when converted to naira, the fare becomes prohibitive for the average Nigerian.
“When you multiply that by N1,500, you’re getting over N600,000. If it’s $400, you’ll be getting almost N800,000.
“In Nigeria we still have ticket for N125,000, we have tickets for N115,000 which is less than $60.”
He attributed the disparity partly to the unique cost pressures Nigerian airlines face, including expensive aircraft financing, the absence of nearby maintenance facilities, and the high cost of ferrying aircraft and engines. Onyema added that although aviation costs are denominated in dollars worldwide, Nigerian operators bear additional logistical burdens.
The Air Peace boss also raised concerns over what he described as excessive taxes and charges imposed on airlines, saying these significantly reduce their revenue.
Onyema disclosed that from a ticket priced at N350,000, airlines retain only a fraction of the amount.
“Nigerian airlines are heavily overburdened by taxes, levies, and all manner of charges. Just take a ticket of about N350,000. What comes to the airlines? About N81,000,” the CEO said.
He dismissed the perception that airlines are making excessive profits, urging the federal government to intervene.
“And everyone is talking about the airlines as if they’re making a kill. It’s not true. The government has got to look into the excessive multiple taxation. We’re suffering multiple taxation and multiple charges.”
Onyema singled out the Nigerian Civil Aviation Authority’s (NCAA) five percent charge on tickets, suggesting that if the levy is indeed paid by passengers, it should be collected directly at airports.
“For example, the NCAA’s 5 percent for every ticket, and they will tell you that it’s the passenger that is paying.
“And we, the airline industry, are saying that if it is the passenger, maybe you have to set up a desk at the airport and collect directly from the passengers.
“Because when you take 5 percent from what we charge, it reduces demand.”
He said airlines are not opposed to paying for regulatory services but warned against turning aviation charges into revenue-generation tools for government.
“There are so many other charges. And that does not mean you don’t pay the NCAA for whatever service they render. ICAO, the International Civil Aviation Organization, says that you are not supposed to go into revenue generation for government.
“What you do is cost recovery. That is, you charge according to the costs of the services you render to the airlines. Not that at the end of the year, the NCAA will become the second largest donor to the country’s treasury.
“Who are the ones suffering it? The airlines.”
Onyema concluded that the accumulation of multiple charges has stalled the growth of Nigerian airlines.
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