Travel News Africa reports that the International Air Transport Association (IATA) has warned African governments against “milking aviation.” At its 81st Annual General Meeting (AGM) in New Delhi, IATA urged Africa to stop the excessive taxation that is stifling the continent’s aviation sector.
While acknowledging the 9% surge in passenger traffic that Africa has witnessed in early 2025, IATA’s Director General, Willie Walsh, argued that the continent’s high fees and restrictive policies are undermining the industry’s potential, despite the positive growth trajectory.
According to African Week, the IATA called for a “strategic reset” that resonates with the challenges peculiar to African aviation. The IATA urges governments to recognise aviation as an engine for economic growth rather than a mere source of revenue. The IATA advocates lowering fees, investing in infrastructure, and liberalising airspace to create a more conducive environment for airlines to thrive.
Walsh stated that while governments understandably seek to generate revenue from the aviation sector, excessive taxation can be counterproductive. It hinders growth, discourages investment, and ultimately limits the industry’s long-term revenue potential.
Open skies policies are another key recommendation from IATA. Walsh stated that by removing restrictions on air traffic between countries, open skies agreements can stimulate competition, lower fares, and dramatically improve connectivity.
Government overtaxation of the African aviation sector poses significant problems and impairments, hindering the industry’s growth and potential contribution to economic development. Industry bodies like the International Air Transport Association (IATA) and the African Airlines Association (AFRAA) have consistently highlighted this issue.
ALSO READ:
- ECOWAS Sets Ambitious 10 Million Intra-Regional Tourists Target by 2029
- Africa’s Travel Indaba 2025 Gives Continent’s Tourism an Auspicious Showcase
- IATA Launches a Swathe of Data Solutions to Optimise Africa’s Aviation
Beyond direct taxation, the overall cost of operating in Africa is higher. IATA has pointed out that fuel prices can be significantly higher (17% above the global average), and airlines also face elevated costs for air navigation services (10% higher), maintenance, insurance, and capital. These inherent costs, compounded by high taxes, severely squeeze airline profit margins, making it difficult to reinvest in fleet modernisation, route expansion, and service improvements.
As air travel is often price-sensitive, when taxes artificially inflate ticket prices, it significantly dampens demand, making air travel a luxury service rather than an accessible mode of transport for a broader segment of the population. This restricts not only leisure travel but also business travel, which is crucial for economic activity.
Over-taxation also discourages airlines from launching new routes or increasing frequencies, particularly on intra-African routes, which are often thin and economically challenging. This results in poor connectivity within the continent, forcing passengers to take indirect routes, often via hubs outside Africa, increasing travel time and cost.
Given that air transport is a vital enabler of trade, tourism, and regional integration, high aviation taxes are a barrier to these. They make it more expensive to conduct business, transport goods by air, and attract tourists. This, in turn, negatively impacts economic diversification and development. Plus, the African Continental Free Trade Area (AfCFTA) and the Single African Air Transport Market (SAATM) initiatives, which aim to boost intra-African trade and travel, are undermined by such fiscal policies.
A concerted effort by African governments, including Nigeria, to reduce the heavy burden of taxation on the aviation industry could unlock significant potential within Nigeria’s tourism and travel sector. Experts and industry stakeholders suggest that such a move, long advocated by bodies like the International Air Transport Association (IATA) and the Economic Community of West African States (ECOWAS), could lower airfares, boost passenger traffic, and create a ripple effect of positive economic impacts.
Currently, air travel in many parts of Africa, including Nigeria, is characterised by high costs, a significant portion of which is attributed to a complex web of taxes, fees, and charges. IATA has consistently highlighted that African airlines face operating costs (including fuel, taxes, and charges) 12-15% higher than in other regions.
The Nigerian government has acknowledged the issue of multiple taxation in its aviation sector. Recent statements from the Minister of Aviation and Aerospace Development indicate an ongoing commitment to create a more favourable operational environment, linking secure and efficient aviation directly to tourism growth and GDP contribution.
Similarly, the Ministry of Tourism has been actively engaging with aviation and other relevant ministries to enhance the traveller experience, including recent efforts to reduce visa fees for African travellers.
Reducing aviation taxation would immediately impact decreased airline operating costs. For this to benefit the tourism sector, it is crucial that airlines pass these savings on to consumers in the form of lower airfares. Should this occur, the benefits for Nigeria’s tourism and travel sector could be manifold.
Lower ticket prices directly stimulate demand. ECOWAS, for instance, projects that its regional strategy to eliminate non-ICAO-compliant taxes and reduce airport passenger service and security charges by 25% (targeted for implementation by January 2026) could increase air travel demand in the subregion by as much as 40%. With Nigeria’s large population and significant diaspora, this could translate into a substantial rise in domestic and international passenger numbers.
Plus, more affordable air travel would make Nigeria a more attractive destination for international tourists and encourage domestic tourism. This influx would directly increase tourist expenditure on accommodation, food, transportation, entertainment, and souvenirs. IATA data indicates that tourism supported by aviation already contributes significantly to Nigeria’s GDP (USD 454.1 million according to a pre-pandemic IATA report, with international tourists contributing an estimated USD 760.2 million annually).
A thriving tourism sector is an offshoot and a powerful engine for job creation. Increased tourist activity would necessitate more staff in hotels, restaurants, tour operations, transportation services, and various other allied industries. This is particularly crucial for Nigeria, with its large youth population.
Lower travel costs would also improve Nigeria’s price competitiveness compared to other tourist destinations within and outside Africa. This could attract a larger regional and global tourism market share.
A sustained increase in tourist demand can be a powerful incentive for private sector investment in tourism infrastructure, such as hotels, resorts, and leisure facilities. It could also encourage public sector investment in enabling infrastructure like better roads to tourist sites and improved public utilities.
Reduced taxation on the African aviation sector, particularly if Nigeria embraced and effectively implemented it, presents a compelling opportunity to catalyse growth in its tourism and travel industry. By making air travel more affordable and accessible, Nigeria can attract more visitors, generate substantial economic revenue, create much-needed jobs, and enhance its overall global appeal.
For more updates on airline developments in Nigeria, visit Rex Clarke Adventures – Airline News.
FAQs
1. Why is IATA warning African governments about overtaxing aviation?
IATA warns that excessive taxes, fees, and charges on aviation in Africa are stifling the sector’s growth. They make air travel more expensive and less accessible, which limits connectivity and economic benefits. High taxation discourages airlines from expanding routes and reduces opportunities for travel agents and passengers alike.
2. How do taxes and fees in Africa compare to other regions?
In Africa, taxes, fees, and charges are 12–15% higher than in other regions. Air navigation charges are about 10% higher, and maintenance, insurance, and capital costs are 6–10% more expensive. This contributes to higher operating costs for African airlines compared to global averages.
3. What impact does over-taxation have on African airlines and passengers?
Over-taxation drives up ticket prices significantly; in some cases, passengers pay more taxes and fees than the base airfare, such as a $100 ticket carrying $60–$70 in charges. This pricing out of travellers hurts demand and airline profitability, threatening the viability of carriers and limiting air connectivity across the continent.
4. What are the main cost challenges African airlines face besides taxation?
Fuel costs are a significant burden, accounting for up to 40% of operating costs in Africa, compared to 25% globally. Fuel prices are about 17% higher than the global average due to limited refining capacity and supply chain inefficiencies. These high fuel costs and elevated taxes and charges severely strain airline profitability.
5. What solutions does IATA propose to improve African aviation?
IATA urges African governments to stop treating aviation as a cash cow and adopt policies that nurture the sector. This includes reducing excessive taxes, implementing the Single African Air Transport Market (SAATM) agenda, encouraging intra-African connectivity, investing in world-class infrastructure, and harmonising regulations to foster sustainable growth and economic development.
