Why Air Peace CEO Claims Nigerian Domestic Flights Are the World's Cheapest

Air Peace Chief Executive Officer Allen Onyema has asserted that Nigerian citizens enjoy the cheapest domestic flight fares globally. Onyema made this claim during a recent television interview. The CEO's comments came amid public scrutiny over alleged unjustified increases in airfares during the Yuletide season.

Global Airfare Comparison

Onyema defended the pricing structure of local carriers. He argued that Nigerian tickets, even with recent increases, remain low compared to international routes. He provided a specific comparison to illustrate his point. A short flight, like Delta Air Lines from Atlanta to Charleston (ATL-CHS), costs significantly more.

He noted a one-way ticket on the Atlanta to Charleston route could be priced around $399 for a main cabin. This short US domestic journey is comparable in duration to a Nigerian route like Lagos to Owerri. At the prevailing exchange rate of N1,500 per dollar, $399 translates to over N600,000.

In contrast, Nigerian domestic airfares were still available for as low as N115,000 to N125,000. This lower price point is less than $60 at the same exchange rate. The National Bureau of Statistics (NBS) reported the average domestic airfare was N124,693.40 in September 2024. Onyema stressed that aviation is a global industry with dollar-denominated costs.

High Nigerian Airline Operational Costs

The Air Peace CEO Allen Onyema linked the low fares to the high airline mortality rate Nigeria. He stated that over 80 airlines have failed in the country due to unsustainable margins.

Nigerian carriers face unique and severe operational challenges. These issues drive up their dollar-based expenses significantly. The lack of local Maintenance, Repair, and Overhaul (MRO) facilities is a major factor.

• Aircraft Maintenance MRO Challenges: Airlines must ferry aircraft abroad for base maintenance (C-checks). The cost to ferry an aircraft alone is about $400,000. Returning an engine can cost up to $1.5 million. Foreign MROs often prioritize their own airlines, causing delays. Nigeria loses an estimated $1 billion to $2.5 billion yearly to offshore maintenance.
• Financing and Taxes: Local airlines borrow money at rates as high as 35%. This is vastly different from the 2% rates enjoyed by some foreign carriers. Furthermore, aviation multiple taxation and levies account for 65% to 70% of the ticket price. This leaves airlines with a small margin from the total fare.

Industry Impact and Future Outlook

Onyema argued that the high operational costs and low fares make the business model unsustainable. He called on regulators and the public to understand these financial pressures. The CEO announced that Air Peace is building one of Africa’s largest MRO facilities in Lagos. This project aims to address the critical maintenance gap. A local MRO could drastically reduce the capital flight and aircraft turnaround times. The CEO’s remarks underscore the delicate balance. Airlines must maintain financial viability while providing affordable travel. This challenge is critical for the future of commercial aviation news in the region (https://flying.flights). The high cost of dollar-denominated spares and fuel, coupled with a volatile Naira, continues to strain the sector.

Regulatory Environment

Onyema specifically mentioned the Nigerian Civil Aviation Authority (NCAA) 5% charge. He suggested the NCAA collect this charge directly from passengers. This change would reduce the burden on airline finances and ticket pricing. The debate highlights the need for regulatory support. This support is vital for the long-term health of Nigerian air transport.