Chief Executive Officer of Air Peace, Allen Onyema, has warned that Nigeria’s airline industry could collapse within three months if the new tax laws are fully implemented. He said the policies have reintroduced charges removed under the 2020 tax reforms.
Onyema made the remarks during an interview on Arise News on Sunday. He stressed that the additional costs would place unbearable pressure on local airlines.
VAT returns on aircraft and spare parts
According to Onyema, the new tax laws impose 7.5 per cent VAT on imported aircraft, engines, and spare parts. He explained that an aircraft valued at $80 million would now attract VAT running into billions of naira.
He added that airlines also pay VAT on spare parts purchased with borrowed funds. According to him, most airlines rely on bank loans with interest rates between 30 and 35 per cent.
Industry cannot absorb extra costs
Onyema said the aviation industry lacks the capacity to absorb the added financial burden. He warned that the reforms, if enforced without relief, could force Nigerian airlines out of business within months.
“If we implement this tax reform fully, Nigerian airlines will go down in three months,” he said. He urged the Federal Government to urgently review the policy.
Airlines to sanction unruly passengers
Meanwhile, Onyema disclosed that Nigerian airlines have resolved to stop tolerating unruly passenger behaviour from 2026. He said airlines would impose stricter sanctions, including blacklisting offenders.
He cited incidents involving passengers who allegedly upgraded themselves to business class, consumed alcohol excessively, and threatened crew members. According to him, airlines would no longer bow to external pressure to release offenders.
Lawmakers seek tax relief
The warning comes amid rising concern over domestic airfares. On December 10, the Senate summoned Aviation Minister Festus Keyamo and industry stakeholders for an emergency meeting.
Similarly, the House of Representatives on December 11 urged the Federal Government to reduce aviation taxes by 50 per cent to ease pressure on airlines and passengers.
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