Roland Iyayi, the former Managing Director of the Nigerian Airspace Management Agency, has argued that the current five percent Ticket Sales Charge (TSC) imposed on domestic airlines is not viable. Collected by carriers for the Nigeria Civil Aviation Authority, the levy is viewed by Iyayi as an inappropriate burden for the local market.
As a trustee for the Airline Operators of Nigeria, Iyayi contends that the sector lacks the maturity to sustain an ad valorem tax model. He highlighted that even the world’s most profitable airlines rarely reach profit margins exceeding 2.5 percent, making a five percent charge inherently distortionary. With fuel costs now consuming nearly 40 percent of operating expenses, he stressed that local carriers are struggling significantly.
Iyayi characterized the existing TSC as a failed mechanism that has strayed from its original objective of infrastructure development. He proposed replacing it with a dedicated Aviation Development Fund. This fund would be separated from general government revenue and strictly earmarked for sector-specific infrastructure projects. By shifting to this model, he believes the industry could achieve sustained growth over the next decade without relying on erratic government budgetary support.
