Airlines on cliffhanger

The Nigerian aviation industry is often described as a quagmire—a complex, sticky situation where every attempt to solve one problem seems to trigger another. This goes beyond just high prices; it is a structural trap involving debt, taxes, and a lack of local technical self-sufficiency, writes WOLE SHADARE

 

To say Nigerian airlines are on a cliffhanger is a perfect metaphor for the suspense and high stakes of the carriers. This month marks a major turning point as new, aggressive regulatory policies collide with a long-standing financial crisis.

Last year painted a grim picture for airlines, despite intermittent policy-related rays of hope that may not bear fruit immediately. 2026 is expected to be grimmer, as carriers will need to think outside the box to survive.

The biggest cliffhanger is the NCAA’s Zero Debt Strategy, which officially rolled out this month. Airlines must now provide Advance Payment Guarantees (APG) to the Nigeria Civil Aviation Authority (NCAA). They can no longer fly first and pay regulatory fees later.

For airlines already operating on thin margins, this removes their “informal credit.” If they can’t pay upfront, they are grounded. Several smaller carriers are currently scrambling to meet these requirements to keep their Air Operator’s Certificates (AOC) active.

Death throes

While some analysts warn that the carriers are in their death throes, a range of structural and fiscal measures are currently being debated, as they have come to realise that astronomical airfares without proper restrictions on their operations mean nothing.

Despite punishing airfares during and after the Yuletide, it is still far from what is needed to make them sustainable and remain in operation.

The proposed solutions focus on three pillars: Fiscal reform, operational efficiency, and regional integration.

The sector is seeing a dramatic thinning of the herd. Many iconic names are essentially hanging by a thread.

Once the giant of West Africa, Arik reported in late 2025 that it had about three operational aircraft due to maintenance debt and receivership issues. Under current regulations, an airline with only one plane should be grounded, making every day a cliffhanger for the survival of many Nigerian carriers.

Most domestic planes are currently due for “C-Checks” (heavy maintenance). Because Nigeria still lacks a fully functional, large-scale MRO (Maintenance, Repair, and Overhaul) facility, airlines must find millions of USD to fly planes abroad. Those who can’t find the forex are simply parking their planes, leading to ghost fleets.

The reintroduction of VAT on aircraft parts and the removal of various tax exemptions (as of Jan 2026) have sent operating costs through the roof.

Air Peace’s owner, Mr Allen Onyema, is overwhelmed by the challenges he and others face as airline operators recently warned that domestic economy tickets could reach ₦1,000,000 this year.

He has, however, forgotten that, rather than focusing on how much airfare would cost, he and others need to know they have their work cut out for them.

Will passengers pay? Domestic traffic has already slumped significantly. If fares reach the million-naira mark, the industry faces a complete collapse of the middle-class market, leaving airlines with planes they cannot afford to fuel and passengers who can no longer afford to fly.

Passengers are financially constrained and see no reason to travel by air. The alternative will be for those who can’t afford airfare to use road transport, despite the many risks posed by the country’s road network.

Traffic slump

The traffic figures from the Federal Airports Authority of Nigeria (FAAN) for 2022–2024 reveal a tale of two skies.

While international travel has hit a three-year high, the domestic sector is in a steady decline, exposing profound structural weaknesses in the nation’s aviation economy.

Data from the agency reveals a stark contrast between international and domestic air travel.

The data show a clear divergence: the upper class and international travellers are flying more, while the shrinking fleet size worsens the decline. Local airlines are struggling to secure foreign exchange for spare parts and maintenance, leading to frequent flight cancellations and delays (one in four flights in 2024 were disrupted).

While international travel grew steadily, the domestic market declined significantly during this period.

Shrinking fleet size

A shrinking fleet size worsens the decline. Local airlines are struggling to secure foreign exchange for spare parts and maintenance, leading to frequent flight cancellations and delays (one in four flights in 2024 were disrupted).

While international travel grew steadily, the domestic market declined significantly during this period. Lagos and Abuja remain the primary hubs, accounting for over 90% of international traffic and a significant portion of domestic movement in 2024.

In 2024, total domestic movements dropped to 12.54 million, down from 14.52 million in 2022. Conversely, international travel has defied broader economic pressures, growing from 3.75 million to 4.33 million over the same period.

For the year 2022 to 2023: Domestic traffic fell from 14,519,565 to 13,409,701, representing a 7.6 per cent decrease.

In 2023 to 2024, traffic fell further to 12,543,153, a 6.4 per cent decrease.

The total three-year Impact indicates that since 2022, the domestic aviation market has declined by 13.6 per cent, resulting in a loss of nearly 2 million passengers.

Rising airfares

While airline fares have risen sharply, especially during the Yuletide, passengers are beginning to show resistance by either cutting down on the number of trips or by embracing a difficult alternative of travelling by road despite its attendant dangers.

As roads remain a security concern, the inability to afford air travel is creating a mobility crisis where people simply stop travelling between cities, further starving airlines of the volume they need to survive.

On a short route such as New York to Philadelphia, demand is highly elastic because travellers can readily switch to a train or car. On a transoceanic flight, demand is more inelastic as there are few alternatives.

This also applies to routes such as Lagos-Abuja, Owerri, Enugu, and Asaba, which are one hour by flight.

Experts’ views

The Managing Director of Aero Contractors, Capt. Ado Sanusi warned that the sector could experience a 10–25% decline in its contribution to Gross Domestic Product (GDP) this year if specific tax waivers are not reintroduced.

Director at the Centre for International Advanced and Professional Studies (CIAPS), Prof Anthony Kila, said airlines must cast a reflective eye upon themselves, adding that in Nigerian aviation, customer-centricity remains more a gleam in the eye than a daily reality.

“Prices are shrouded in mystery, refunds are a veritable quest, and the quality of service often falls short of the fare’s grandeur. When demand soars and options are few, it’s tempting—though utterly indefensible—to treat passengers as captives rather than cherished guests.”

Kila further stated that if the government genuinely wants lower airfares, it need not resort to price fixing.

“Instead, it should recalibrate incentives—revise agency charging models, cap or decouple percentage-based fees, impose efficiency benchmarks on self-financing entities, and bolster consumer protection oversight. Most importantly, it must articulate a clear policy—backed by decisive action—that aviation is nothing less than vital transport infrastructure, not a luxury.”

Last line

The industry is no longer in a slow decline; it is in an active shakeout. By the end of this quarter, we will likely see fewer airlines, but the ones that remain will have been forced into a much stricter, “pre-paid” financial model.

Google+