Air Peace Warns Tax Reform Could Cripple Nigerian Airlines in Three Months

 

Allen Onyema, Chief Executive Officer of Air Peace, has warned that the newly proposed tax reform laws could collapse Nigerian airlines within three months if implemented.

Speaking in an interview with Arise News on Sunday, Onyema said the reforms would reintroduce levies that the 2020 tax laws had removed. These include customs duties on imported aircraft, engines, and spare parts, as well as VAT on airline tickets.

“There is now VAT on the importation of aircraft. So, if you buy an aircraft for $80 million, you are expected to pay 7.5 percent of that amount,” Onyema explained. “Do the mathematics — loans from banks carry 30 to 35 percent interest. You bring in spare parts, you pay 7.5 percent on those. The airline industry cannot sustain these extra costs.”

Onyema stressed that such taxes would further burden airlines already struggling with operational costs. “If this tax reform is enforced, Nigerian airlines will go down in three months,” he warned.

Crackdown on Unruly Passengers

Onyema also announced that Nigerian airlines would no longer tolerate unruly passenger behaviour starting from January 2026.

“What Nigerian airlines tolerate abroad, they should not do here,” he said. “Some passengers from London upgraded themselves to business class without paying and brought alcohol onboard, causing disturbances. When we were contacted, I told the caller that the law, not the airline, must deal with them. We will blacklist offenders.”

He added that the British authorities confirmed that over 200 flights were diverted due to bad weather on that day, countering viral claims that Air Peace mishandled the situation.

Government Response to Aviation Concerns

Earlier this month, the Senate summoned Festus Keyamo, Minister of Aviation, alongside key stakeholders, over soaring domestic airfares. The House of Representatives also urged the federal government to reduce aviation taxes by 50 percent to make air travel more affordable.

Onyema’s warnings highlight the increasing tension between government fiscal policies and the survival of Nigeria’s aviation industry.