Nigerian Carriers Push for Overhaul of 5% Ticket Levy as Fuel Costs Cripple Operations
Nigeria's aviation sector is once again at a crossroads, as the Airline Operators of Nigeria (AON) has formally called on the National Assembly to scrap the long-standing five per cent Ticket, Charter and Cargo Sales Charge (TSC) and replace it with a flat-fee model similar to the Passenger Service Charge collected by the Federal Airports Authority of Nigeria (FAAN). The proposal, tabled during a House of Representatives public hearing on Thursday, could reshape how the country's airlines are financed and how travel businesses across the region plan their Nigerian operations.
Presenting AON's position, former Managing Director of the Nigerian Airspace Management Agency, Roland Iyayi, argued that the current percentage-based levy places an unfair burden on domestic carriers and creates distortions in airline earnings. Under the existing framework, airlines are required to deduct five per cent from every ticket, charter and cargo sale and remit it to the Nigerian Civil Aviation Authority (NCAA), which then shares the proceeds among several aviation agencies. AON believes a flat, unit-based charge would create a level playing field regardless of route pricing, protecting airlines that operate on thinner margins.
The push for reform is inseparable from the harsh economic realities facing Nigerian carriers. AON pointed to a staggering 270 per cent surge in local aviation fuel prices, which now swallows roughly 40 per cent of airline operating budgets. Since March, this fuel crisis has made regular remittance of the TSC virtually impossible, prompting several operators to suspend collection on behalf of the NCAA. Faced with mounting costs on scheduled routes, many domestic airlines have quietly pivoted towards charter operations, where they retain greater control over pricing and margins.
For sub-Saharan Africa's travel trade, this shift carries real consequences. Reduced scheduled capacity on Nigerian domestic routes translates into tighter seat availability, higher fares and less predictable connections for tour operators building itineraries into Lagos, Abuja, Port Harcourt and Kano. Corporate travel planners, in particular, are watching the situation closely, as reliable scheduled lift is essential for business travellers moving between West African commercial hubs.
AON's submission went beyond the levy issue, raising sharp questions about how aviation revenues are managed. The association highlighted that despite the NCAA collecting more than 10 billion naira in mast application fees over the past two decades, critical low-level navigation charts have still not been produced. This gap prevents the safe conduct of night helicopter flights, leaves segments of the national airspace underused, and restricts commercial aircraft utilisation to roughly six hours per day, well below the international standard of eight to ten hours. The result is expensive assets flying fewer hours than they should, driving up the cost per seat and squeezing airline profitability further.
Looking to structural solutions, AON urged lawmakers to consider a broader reform of industry financing. The association proposed that aviation sector revenues be removed from the Consolidated Revenue Fund under the Treasury Single Account and redirected into a dedicated Aviation Development Fund. Such a ring-fenced pool of capital, they argued, would allow steady reinvestment into airports, navigation infrastructure, safety systems and workforce development, rather than leaving essential upgrades hostage to competing national budget priorities.
The hearing also revealed tensions among aviation agencies themselves. NAMA has been lobbying for a bigger share of the current five per cent levy, while the NCAA has cautioned against any further reduction in aviation funding. This tug-of-war underscores just how strained the ecosystem has become and how urgently a modern financing framework is needed.
For African travel professionals, the developments in Nigeria offer both a warning and a lesson. Nigeria remains one of the continent's largest aviation markets, and any disruption ripples across West Africa's connectivity, cargo flows and tourism pipelines. Whether Parliament embraces the AON's proposals or crafts a compromise, the outcome will shape the cost of doing aviation business in Nigeria for years to come, influencing fares, route networks and the pace at which African skies truly open up.
