April 22, (THEWILL)- The Nigerian government and its agencies amassed over N134.78 million as taxes on the fully booked maiden London flight of Air Peace Airline on Saturday, March 30, 2024 — investigation has shown.
The amount which comprises ‘Taxes’ and ‘Fuel Surcharge’, were imposed on the 260 passengers who travelled on the Boeing 777 jet operated by Nigeria’s largest carrier from Lagos to London Gatwick Airport in the United Kingdom (UK) as revealed in the tickets.
In an unprecedented move, Air Peace had pegged its economy class return ticket at N1.2 million, thereby slashing fares on the route while a return business class ticket sold for N4 million. The airline also offered a special 15 percent rebate on the already reduced economy fare to Nigerians studying in the UK.
The average cost for a return economy class ticket on a foreign airline at the time was about N3 million, while business class went for about N8 million or more.
However, data gleaned from the one-way economy tickets for the historic Air Peace Lagos-London trip showed that each passenger was charged a total of N518,400 consisting of N32,400 and N486,000 as Taxes and Fuel Surcharge respectively, while N173,700 was stated as ‘Fare’.
Industry experts explained that the ‘Taxes’ consist of “components of taxes” such as sales tax and airport service charge, while the ‘Fuel Surcharge’ is paid to the Federal Airport Authority of Nigeria (FAAN) – the landlord of the airport; all borne by the passengers as taxes while a paltry percentage of the total fare goes to the airline.
“This is why air transport is exorbitant in Nigeria. There are a series of taxes imposed on the passengers while the wrong impression is created among the public that the entire fare or a large chunk of it goes to the airlines,” said Amara Ekeh, a frequent air traveller at the Muritala Muhammed International Airport, Lagos.
THEWILL could not obtain copies of tickets issued in the business class or the discounted student fare categories, hence it was assumed that all the 260 passengers travelled on economy class – for the purpose of this report, in calculating the total taxes (260 x N518,400) imposed on the passengers
Another frequent traveller, Mrs Victoria Williams, expressed satisfaction over what she called tremendous improvement in the Nigerian airports, especially the Muritala Muhammed International Airport in Lagos which she described as the major gateway to the country.
“Yes, N518,000 tax may appear a huge amount, Nigerians would not bother if it is used judiciously for the purpose it was raised without having it frittered into personal pockets because Nigeria’s corruption is deep in her DNA’, Mrs Williams said.
She observed with displeasure that former President Muhammadu Buhari neglected the airports to pursue the nebulous Nigeria Air project which has eventually become a pipe dream. According to her, if these huge taxes imposed on the travellers were rightly dedicated to improving the airport facilities, we would not be where we are today.
THEWILL had reported that Nigerians expressed excitement as Air Peace on March 30, recorded a full flight to London. The airline which operated a Boeing 777 for the maiden flight, held a brief ceremony at the Muhammed International Airport (New Terminal) to celebrate the occasion.
Some of the dignitaries present at the occasion include Festus Keyamo, the Minister of Aviation and Aerospace Development, Doris Uzoka-Anite, Minister of Industry, Trade and Investment, and Chris Najomo, Acting Director, General, NCAA amongst others.
The elated passengers on the Air Peace flight to London said the flight was a much-awaited one and signals a new phase in Nigeria’s travel industry. They described it as a new dawn for travellers who were tired of exploitative fares charged by foreign carriers.
They noted that Air Peace is changing the narrative to air travel with the maiden flight at a drastically reduced fare which has led to a steep reduction in international flight fares.
Airfares for travels from Nigeria to other countries have seen a significant drop, following the appreciation of the naira and the competition arising from Air Peace’s debut on the Lagos-London route. The pressure on the foreign exchange market has eased as naira continues to appreciate, though foreign airlines had not shown the enthusiasm to reduce fares despite pressure from the authorities.
Foreign airlines had failed to reduce fares despite a warning by the Nigeria Civil Aviation Authority (NCAA) that lower ticket inventories (cheaper tickets) be released.
However, airfares in the last two years had risen by over 400 percent as a result of accumulated trapped funds of foreign airlines in Nigeria caused by the lingering foreign exchange scarcity in the country.
Reacting to the development, the Association of Foreign Airlines and Representatives in Nigeria (AFARN) has debunked reports implying that foreign airlines in Nigeria reduced fares because of Air Peace’s debut flight to London.
Kingsley Nwokoma, the president of AFARN was reported as saying that fares reduction on the London route and other destinations was not because of competition by Air Peace but a drop in the foreign exchange rate and the repatriation of trapped funds.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
