…as Okonkwo says union derailed TSC payment deal with NCAA
By Dickson Omobola
Vice Chairman of the Airline Operators of Nigeria, AON, Allen Onyema, Thursday, disclosed that no domestic airline makes $1 million in annual profit, saying the high cost of operating in the country and the burden of multiple taxes, fees and charges imposed on carriers are responsible for the situation.
Onyema, who is Chairman of Nigeria’s largest airline, Air Peace, also said the country’s airlines used to borrow money from banks at 33 per cent interest, which later came down to 30 per cent and then 29 per cent.
He spoke at the 30th Annual Conference of the League of Airport and Aviation Correspondents, themed: ‘Towards Sustainable Aviation Industry: Balancing Government Revenue Demands with Sector Growth,’ held in Lagos.
He urged government to allow revenues generated by agencies in the sector to remain with them for the development of the industry, saying the remittance of over 25 per cent was hurting the agencies.
According to him, a percentage of whatever was generated through the airlines should remain with government agencies to enable them develop the industry.
He said: “The airlines of Nigeria are advocating that for the airline industry to succeed in this country, there must be a review of the bills, the charges, the fees and taxes being paid by airlines of Nigeria.
Unless and until that is done, forget it, airlines will continue to wobble and stumble in this country.
“Go and look at the books of these airlines. I don’t think there’s anyone that makes over a million dollars every year as profit. None of them. If Air Peace, the biggest carrier, the biggest revenue generator, did not make one million dollars at the end of 2025, I don’t think there’s any other airline that would do that. It is as bad as that.
“The airlines of Nigeria borrow money from Nigerian banks at 33 per cent, 30 per cent, they come down to 29 per cent. Let me make this clear. The airlines of Nigeria, we are not against funding government agencies. We support them.
“In fact, we call on government to allow revenues or whatever is coming to these agencies to remain for the development of the industry. The remittance of over 25 per cent or whatever, I think, is hurting those agencies too. So, AON believes that the retention of a good percentage of whatever is generated through these airlines should remain with those government agencies for them to actually develop the industry, without which there will be infrastructural decay.”
Meanwhile, the executive chairman of United Nigeria Airlines, Professor Obiora Okonkwo, dismissed allegations that domestic operators failed to remit the five percent Ticket Sales Charge, TSC, to the Nigeria Civil Aviation Authority, NCAA, insisting instead that Nigerian airlines had maintained full compliance with the regulatory agency before recent labour disputes.
He also spoke at the LAAC Conference.
Okonkwo said prior to February this year, all airlines were meeting their financial obligations to the government without issue.
According to him, payment difficulties emerged only when airlines began to have issues with the cost of aviation fuel which had increased to N3,300 as a result of the US-Iran crisis.
He said: “Before February this year, there were no payment problems. All airlines were paying. The AON issue only became a problem because of the Gulf crisis. AON was the first to cry out. We wrote to the President, explaining that we could no longer pay these charges. We requested either a complete suspension of charges or temporary relief during the aviation crisis, and the request was granted. The President agreed and waived 30 per cent.
“We met with NCAA and the Minister. We held several meetings. In one decisive meeting, NCAA requested that airline operators pay 10 per cent of the legacy debts within a specified period, and then pay the rest in installments over a period of time and each airline was to meet with NCAA’s director of finance.
“The airlines complied with this directive. The airlines did this. The director met with operators in Lagos and Abuja, and we developed a payment plan. This plan was in place. When you have a payment plan in place, it does not mean you will default. We were making regular payments according to the agreement we had with the NCAA until we heard about the labour union problem.
“At United Nigeria, to ensure no issues, we opened joint accounts with the NCAA at Nigerian banks. The account was structured so the NCAA could withdraw funds directly without asking us.”
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