Nigeria among world’s costliest markets for airline operations – IATA

Nigeria remains one of the most expensive countries in the world in which to operate an airline, according to the International Air Transport Association (IATA), a situation that continues to constrain the growth and profitability of carriers operating in the country. The disclosure was made by IATA’s Regional Vice President for Africa and the Middle […]

Nigeria remains one of the most expensive countries in the world in which to operate an airline, according to the International Air Transport Association (IATA), a situation that continues to constrain the growth and profitability of carriers operating in the country.

The disclosure was made by IATA’s Regional Vice President for Africa and the Middle East, Kamil Al-Awadhi, during the association’s Annual General Meeting held in Brazil, where industry leaders gathered to discuss the challenges and opportunities facing global aviation.

Al-Awadhi acknowledged ongoing efforts by Nigeria’s Minister of Aviation and Aerospace Development, Festus Keyamo, SAN, to reposition the sector through policy reforms and stakeholder engagement. However, he stressed that airlines in Nigeria continue to grapple with a high-cost operating environment that undermines their competitiveness and long-term sustainability.

According to him, operational expenses in Nigeria remain among the highest globally, placing significant pressure on airlines already contending with fluctuating fuel prices, foreign exchange constraints, infrastructure challenges, and rising maintenance costs.

“Nigeria is one of the most expensive countries in which to operate an airline,” Al-Awadhi said, noting that the burden of taxes, charges, and various regulatory costs continues to weigh heavily on operators.

The IATA executive explained that while African aviation has enormous growth potential due to its young population, expanding middle class, and increasing demand for connectivity, excessive taxation and regulatory charges are preventing many markets from realising those opportunities.

He identified high airport charges, navigation fees, passenger service charges, and multiple taxes imposed by different government agencies as some of the factors driving up the cost of doing business in the aviation sector.

The situation, he said, not only affects airlines but also impacts passengers through higher ticket prices, ultimately limiting air travel demand and restricting economic activity linked to aviation.

To tackle the challenge, Al-Awadhi renewed calls for member countries of the Economic Community of West African States (ECOWAS) to adopt and implement a proposed 25 per cent reduction in aviation-related taxes and charges across the region.

He argued that lowering the tax burden would make air travel more affordable, stimulate passenger growth, improve airline profitability, and strengthen regional connectivity.

According to IATA, reducing costs for airlines would create a ripple effect across the economy by encouraging greater movement of people, goods, and services, while supporting tourism, trade, and investment flows.

Meanwhile, the association has lowered its profit outlook for African airlines in 2026, projecting a combined net profit of $100 million.

This marks a significant reduction from the $200 million forecast issued in December 2025 and represents a sharp decline from the estimated $300 million profit recorded in 2025.

According to IATA’s Global Outlook for Air Transport – Energy in Crisis, African airlines are expected to remain the world’s fastest-growing aviation market in terms of passenger traffic. Demand, measured in Revenue Passenger Kilometres (RPK), is forecast to increase by 10% in 2026, slightly above the 9.8% growth recorded in 2025. However, rising operating costs and structural challenges are expected to erode profitability across the region.

The report projects that African airlines’ net profit margin will fall to just 0.2% in 2026, compared with 1.6% in 2025.

Earnings per passenger are also expected to decline significantly, dropping from $2.10 to $0.40. While airline capacity is projected to grow by 7.7% next year, it will still lag behind passenger demand growth.

IATA noted that fuel costs, currency volatility, weak infrastructure, and limited access to financing continue to weigh heavily on African carriers. The association also highlighted increasing jet fuel refining margins and global energy market disruptions as major cost drivers affecting airline operations.

Daily Trust reports that Nigeria’s aviation sector remains particularly vulnerable due to its dependence on imported aviation fuel and exposure to foreign exchange fluctuations. Airlines have faced mounting operational expenses, prompting some carriers to reduce flight frequencies, suspend routes, and adjust fares.

Although government interventions, including reductions in statutory charges and efforts to moderate Jet A1 fuel prices, have provided some relief, industry operators continue to grapple with challenging market conditions. The revised forecast underscores the difficulty African airlines face in translating strong passenger growth into sustainable profitability.