Nigeria’s domestic aviation industry is facing a potential crisis due to newly introduced tax laws, according to Allen Onyema, Chairman and Chief Executive Officer of Air Peace. Onyema warned that if the laws are implemented from January 1, 2025, without review, domestic airfares could rise significantly, potentially reaching N1.7 million. This would force local carriers out of business within months, affecting passengers, banks, and the broader economy.

Onyema attributed high airfares to excessive taxes, levies, and charges on airlines. He dismissed claims that airlines are profiteering, explaining that most ticket revenue is lost to statutory deductions. The Air Peace CEO noted that the burden of the new tax reforms would ultimately fall on passengers, leading to a sharp rise in domestic fares.

The warning comes amid growing public anger over already high domestic airfares, which rose to between N250,000 and N450,000 for single-route flights during the Yuletide season. The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee has insisted that the new tax laws will take effect from January 1, 2026, despite calls for their suspension.

Onyema’s comments emphasize the need for a review of the tax laws to prevent a crisis in the domestic aviation industry. He stated that the implementation of the new tax reforms would lead to a significant increase in ticket prices, making air travel unaffordable for many Nigerians. The potential collapse of domestic airlines would have far-reaching consequences for the economy and the traveling public.

The Nigerian government has been urged to reconsider the implementation of the new tax laws to avoid exacerbating the already challenging situation in the domestic aviation industry. As the industry awaits the government’s decision, passengers are bracing themselves for potential fare increases. The developments highlight the need for a balanced approach to taxation, one that considers the impact on businesses and consumers alike.