The Vice Chairman of the Airline Operators of Nigeria (AON) and Chairman of Air Peace, Allen Onyema, has warned that many local airlines may stop operations within the next 30 days unless the Federal Government steps in to help with the problems facing the aviation industry.
Mr Onyema said the industry is in a serious crisis due to high operating costs and many financial responsibilities.
He spoke on Wednesday in Lagos during the launch of "Pathways, Pilgrimage & Destiny: The Biography of Alhaji Muneer Bankole," the story of the founder of Med-View Airline.
"Going into aviation is not a piece of cake. It is an industry that is not very rewarding. It is capital-intensive, yet less rewarding. Today, we are facing a phase that poses existential threats. Except something drastic is done very quickly within the next 30 days, a lot of airlines might go extinct," Mr Onyema said.
His warning comes as Nigerian airline operators express worries about the cost of aviation fuel, various regulatory charges, access to funding, and the financial obligations placed on airlines.
Mr Onyema also criticized the planned picketing of airlines by aviation unions over the non-payment of the five percent Ticket Sales Charge (TSC). He warned that such actions could cause wider issues in domestic air travel.
He said airlines would support each other if any airline was picketed. "If they picket any airline, others will go because there’s no need for that. There is nowhere in the world that government agencies use unions to talk about issues of debt."
The five percent TSC is a legal charge collected by the Nigerian Civil Aviation Authority (NCAA) on tickets sold in Nigeria. The NCAA says the charge is taken under the Civil Aviation Act and shared with other aviation agencies, including the Nigerian Airspace Management Agency, the Nigerian Meteorological Agency, the Nigerian College of Aviation Technology and the Nigerian Safety Investigation Bureau.
The NCAA has also recognized the issues surrounding timely payment of the charge. In February, the authority met with AON about its requirement that airlines give advance payment guarantees to ensure timely payment of the charge.
The NCAA said this measure was meant to protect funds collected from passengers and help improve the funding of aviation agencies. They later postponed the implementation of this requirement for 90 days to allow airlines to sort out any outstanding payments.
Mr Onyema, however, argued that the financial burden on airlines must be addressed through a larger review of government charges and the industry’s working conditions.
"The airlines are not against helping the government generate revenue. But no airline in the world is taxed directly for revenue. The airlines indirectly provide revenue for the government," he said.
Mr Onyema explained that the problems in the industry are not just about the TSC. He mentioned the high costs of maintaining aircraft and daily operations as major concerns.
He said that airlines need urgent government action, not measures that could add to their financial problems. "Everybody pities Nigerian airlines, yet nobody wants to do anything about their situation," he said.
He also noted the industry’s history shows how hard it has been for local airlines to stay in business for a long time. He pointed out that over 50 airlines have left the Nigerian market over the years.
AON has previously mentioned the collapse of more than 50 Nigerian airlines over the last 30 years as proof of the industry’s ongoing financial problems.
The sector is still under pressure from rising aviation fuel costs, foreign exchange issues, aircraft maintenance costs, and financing expenses.
In June, Mr Onyema warned that airlines were borrowing from banks to buy aviation fuel and cutting down on flights to limit their losses. He also called for a review of aviation taxes and charges, especially the five percent TSC.
More recently, he said many airlines have had to reduce operations because of the high costs of keeping aircraft running. He warned that these financial pressures could lead to more airline failures.
Mr Onyema’s latest warning adds to the growing calls from airline operators for the government to rethink the financial and regulatory environment for local carriers.
The AON has sought direct talks with President Bola Tinubu about aviation taxes and charges, arguing that the combined burden is hurting the survival of local airlines.
Mr Onyema called for an aviation taxes and charges review committee in June to look into the different charges on airlines and suggest ways to improve the industry’s future.
This discussion is happening as the government continues to defend reforms in the aviation sector and insists that airlines must meet their legal obligations.
The NCAA has stated that the five percent TSC is not an arbitrary charge but a legal fee taken from passengers and paid through airlines to support key aviation agencies.
For the airlines, though, this issue is part of a bigger concern about the costs of doing business in an industry where buying and maintaining aircraft, fuel, and financing are mostly dollar-based.
Mr Onyema said that if urgent actions are not taken to tackle the pressures facing operators, more airlines could be forced to shut down.
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