Nigeria’s aviation sector has entered a period of heightened fiscal uncertainty following the implementation of a new tax regime on January 1, 2026. The shift comes as fresh data from the Federal Airports Authority of Nigeria (FAAN) reveals a significant contraction in the domestic market, with passenger traffic dropping from 14.52 million in 2022 to 12.54 million in 2024.
This 13.6% decline highlights a growing crisis where millions of Nigerians are being priced out of air travel due to a combination of currency volatility and an intricate web of regulatory levies. Industry stakeholders warn that the accumulation of 54 separate taxes, fees, and charges now threatens to bankrupt domestic carriers.
The new tax framework, aimed at consolidating national revenue, includes the reintroduction of 7.5% Value-Added Tax (VAT) on aircraft and spare parts. This move reverses previous 2020 concessions and has drawn sharp criticism from operators who argue that the domestic market cannot absorb additional costs.
Air Peace CEO Allen Onyema recently raised alarms that ticket prices could surge toward ₦1 million, noting that roughly 35% of a typical fare is currently consumed by government levies. These include the 5% Ticket Sales Charge (TSC) collected by the NCAA and the newly introduced $11.50 Advance Passenger Information System (APIS) levy, which was activated in December 2025 to fund a digital security window.
Beyond the visible ticket taxes, airlines are burdened by approximately 18 separate payments to FAAN, ranging from boarding bridge fees of $250 per use to high-altitude office rents in Abuja and Lagos. The Nigeria Revenue Service (NRS) maintains that the reforms will eventually assist airlines through VAT recovery mechanisms and digitalized filing systems designed to minimize fraud.
However, to ensure immediate compliance, the NCAA has activated a “Zero Debt Strategy” this month, requiring airlines to provide mandatory advance payment guarantees for all regulated charges before flight operations are cleared.
The Federal Government’s 2026 budget proposal reflects this tightening environment, with the Ministry of Aviation’s allocation slashed by 23% to ₦87.3 billion. With the government increasingly looking toward private capital and airport concessions to manage infrastructure, the domestic airline industry remains at a crossroads.
Operators are currently urging a total review of the “multiple taxation” model, while international bodies like IATA and ECOWAS have called for a reduction in air ticket taxes by early 2026 to prevent a total collapse of regional air connectivity.
 reveals a significant contraction in the domestic market, with passenger traffic dropping from 14.52 million in 2022 to 12.54 million in 2024.){kind=link}