Airfares may rise as NAMA set to raise levy by 800%

Amid complaints by the Airline Operators of Nigeria over multiple taxation, the Federal Government has expressed its intention to further raise its charges.

The Managing Director of the Nigerian Airspace Management Agency, Umar Farouk, announced this on Friday at the League of Airports and Aviation Correspondents seminar themed “Aviation Survivability amidst a Challenging Macro-Economic Environment,” held in Ikeja, Lagos.

He stated that the agency would raise its en-route navigational charges from N2,000 and N6,000 to N18,000 and N54,000 per flight. Similarly, the airspace agency increased the extension of service hours to airlines from N50,000 to N450,000, representing an 800 per cent increase per extension to enable the agency to recover the cost of diesel and other logistics during the extension period.

This means that airfares might also skyrocket by 800 per cent.

In January, NAMA and the Nigerian Civil Aviation Authority held a strategic meeting with some airline operators to review what has been described as the outdated N16,000 terminal en-route navigational charges.

He said, “The Nigerian Airspace Management Agency relies on statutory fees for the management of the airspace (remember that aviation takes place only in the air). These funds are generated from services we provide to the flying community. Without these funds, NAMA can’t discharge its responsibility of ensuring the safety of our airspace effectively. We mainly generate these funds through the airline companies.”

Farouk also noted that in 2023, NAMA had an expenditure of about N21 billion in personnel costs alone, over N12 billion in capital costs, and over N10 billion in overhead costs, adding that all these were to be funded without the Federal Government budgetary allocation.

He said NAMA had been charging as low as N11,000 per flight when a one-way domestic ticket cost only N16,000.

He mentioned that while ticket prices today have gone up astronomically to as high as between N150,000 to N200,000 for a one-way economy ticket owing to the prevailing economic circumstances, NAMA navigational charges had remained the same since June 2008.

“Currently, our unit rate for international flights charged for service provision is about $70, and domestic flights are charged N6,000. While NAMA recognises the difficult economic environment in which aviation operates in Nigeria, it is equally a part of the ecosystem.

“It goes to the same market to procure equipment and other services like training. If NAMA is to survive and continue to guarantee safety and efficiency in the airspace, it must breathe.

“Even though most costs in the economy have increased by more than 1,000 percent, NAMA has proposed to increase its fees by 800%. The new rates for en-route and terminal navigation charges are to be reviewed from N2,000 and N6,000 to N18,000 and N54,000 per flight.

“Also, the extension of service hours is to be reviewed from N50,000 to N450,000 per extension to enable the agency to recover the cost of diesel and other logistics during the period of extension”.

“The largest percentage of NAMA’s revenue comes from en-route navigation charges (domestic and international flights) and terminal navigation charges (domestic and international flights). While international flights pay in US dollars, domestic flights pay in the Nigerian currency.”