Professor Obiora Okonkwo, the spokesperson of Airline Operators of Nigeria and chairman of United Nigeria Airways, on this interview, speaks on the influence of recent tax regulation on the financial system, petroleum provide, naira alternate fee on the aviation sector in Nigeria in addition to what home fliers count on in 2026.
How would you assess the outgone 12 months 2025?
For me, 2025 had been a cocktail of various developments – positives and negatives.
So, it is dependent upon what side one chooses to deal with. For me, I can say that it had been a really fulfilling 12 months. It won’t have been a 12 months that you just received all the outcomes anticipated, however it’s that 12 months we began laying basis for the realisation of sure targets we had set out, however obstructed closely by different issues that had transpired within the final three to 4 years – the COVID disruptions, the instability of the alternate charges, and the flip-flop coverage of the federal government that threw up the Nigerian financial system right into a extremely turbulent state of affairs.
So, we noticed ourselves attempting to navigate and manoeuvre the stormy {economic} climate.
Now, we’ve got seen a bit of little bit of stability within the alternate fee, a departure from the fluctuations of the current previous. So, we began once more, reconstructing the method of attaining our set out targets, aims, and imaginative and prescient, because it issues us within the United Nigeria Airline enterprise.
That’s the reason you’ve seen us rising our fleet on the finish of final 12 months; we added six plane to our operations. After which, we enter into the 12 months 2026 with a complete lot of plans, which we hope to make public at our fifth anniversary occasion, round this February.
So, there might be quite a lot of large bulletins, I suppose, of targets that we’ve set out for ourselves.
Alternatively, 12 months 2025 additionally had seen a complete lot of presidency methods and plans, just like the almighty new tax regulation notably. And as a lot as I imagine that that motion is a part of governance, I strongly share the opinions and issues being raised about this new tax regulation, because it impacts some sectors, particularly aviation. The legislators are involved that there could have been some departure from the legislated side of the regulation, amongst so many others.
As a lot as I agree with Taiwo Oyedele that such a factor will favour some sectors, have an effect on some areas, the issues are worthy of very severe reconsideration.
If in any respect there may be nothing to them, the federal government must let the individuals know that there’s nothing to it, as a result of it’s good; tax is best achieved and picked up when there may be willingness to pay, when there’s a conviction that it won’t be for my very own good, however good of the nation.
All of us desire a very progressive, economically vibrant Nigeria. However from each the Act – the implementation side of the regulation – it’s kind of fairly intimidating and arm-twisting: Take over the individual’s belongings, promote the property inside two weeks. All these issues are loopy. You don’t do this; it is rather draconian.
I believe there may be presupposed to be a lot sensitisation. And that sensitisation mustn’t simply be just by phrase of mouth. It must be kind of an exposition of what we’ve got achieved with the tax you have got paid.
That is how clear we’re about it. That is what we intend to do with the extra tax we’re coming to ask from you. And we are going to see by the proof. So, now you already know it. We’re going to do that. This course of might take one to 2 years.
At this time, persons are not carried alongside; Nigerian persons are not carried alongside in our {financial}, fiscal insurance policies. There may be quite a lot of concern about which price range we’re implementing. The tax collected from an incredible part of our price range expenditure. How is it being structured? What’s it supposed to attain?
You see, Nigerians ordinarily would like to pay tax. It’s simple to go and duplicate what exists in different nations and put it right here. However in these nations, when you have a safety problem, you name 911. They’re there. When you’ve got a well being problem, you name an ambulance. They’re there.
You’ve gotten your roads infrastructure; you have got your lights supplied. What do you pay tax for?
That’s the query in lots of Nigerians’ minds. What can we pay tax for after we nonetheless present the whole lot for ourselves? We’re in my hometown now.
All of the infrastructures round us, ranging from the electrical poles, transformers to the roads and the road lights have been supplied by people. The place is authorities’s presence?
Authorities must, to begin with, present their presence within the lifetime of the individuals in order that they’ll get their buy-in and taxing might be simple as a substitute of these draconian methods that come like utilizing drive. That’s gangsterism form of stuff.
So, that side of the tax dialogue is elevating some concern. And for us in aviation, we are literally, regardless of the pushback that’s coming from totally different sectors of presidency, are involved that what we’re seeing on the paper is totally different from what the tax man is saying.
Oyedele says there isn’t any trigger for alarm with what he has. So, are we studying totally different tax legal guidelines? That’s the concern. That’s the query. Are we studying totally different tax legal guidelines?Did AON make these observations recognized to the Tax Reform Fee?
We truly had a gathering. I led the group of AON to satisfy with the committee. We defined the whole lot and we had no disagreement. We understood the travails of the sector and the necessity to unravel all these entanglements with taxes and levies round it. However what ultimately got here out was a departure from what we mentioned and the mutual concern we shared.
However, we had made one other engagement with them led by the Vice President of AON. And we put all these items down, drew his consideration to a few of these issues and so they have been fairly understood. They promised that it needs to be seemed into within the realisation that the sector (aviation) is a really essential sector that should not be ignored, however get all the required consideration.
So, we might be joyful if we’ve got no trigger for alarm. However probably the most outstanding of essential points that stood out from that’s his current pushback.
We’re speaking about 7.5 per cent VAT. But, there was an announcement that nothing new was added to what was current. How can anyone say that VAT is sweet for us on a median value of an plane? Allow us to say you purchase a brand-new plane at $80 million relying on the dimensions of the plane or $100 million with funds borrowed at 35 per cent from the {bank}. When the plane arrives, it’s a must to search for one other 7.5 per cent to pay VAT. But, there may be zero proportion obligation on the plane.
The place is the VAT coming from?
“YOU SEE, NIGERIANS ORDINARILY WOULD LOVE TO PAY TAX. IT IS EASY TO GO AND COPY WHAT EXISTS IN OTHER COUNTRIES AND PUT IT HERE. BUT IN THOSE COUNTRIES, IF YOU HAVE A SECURITY CHALLENGE, YOU CALL 911. THEY ARE THERE.”
That 7.5 per cent, should you calculate it, is a few tens of millions of {dollars}. After which anyone says, I’ll pay it and you come it to me later. What am I claiming? What do I want to say?
In our assembly with the taxman, we raised this situation. We stated it’s not in our curiosity to say any VAT. No one claims something from the Nigerian authorities.
Why ought to I’m going and borrow cash and pay 35 per cent on the borrowed cash that can by no means be claimed? Who has ever claimed something from the Nigerian authorities? Assuming that claiming is essential, why ought to I’ve to attend to pay and declare? Does it make any sense?
The difficulty is getting funds, elevating income that serves you right this moment, however kills you tomorrow. It’s not a smart resolution. So, we in aviation, the selections or insurance policies of 2025 gave us concern about the way forward for aviation in 2026.
There is a matter which you stated has thrown up issues about inflation and its cross-cutting influence on funds in relation to the difficulty of removing of gas subsidy, as a result of these points are tangential to the operation of the AON. How do all these pan out?
Nicely, we’re grateful to Alhaji Aliko Dangote and his refinery, Dangote Refinery. As an affiliation, we’re actually marveled and shocked on the antagonism in opposition to the Dangote Refinery coming from these opposing what has introduced a brand new life to totally different sectors of this nation and even the financial system.
Personally, as an economist and a participant in several sectors in Nigeria, I do know fairly effectively that with out the Dangote Refinery, a few of the {economic} wins we’re experiencing now can by no means be nearly as good as it’s. A number of the {economic} indicators and the indices which might be very optimistic can’t be nearly as good as they’re.
Due to this fact, I might have thought that there ought to quite be a form of synergy and extra help. I imply, what the federal government couldn’t do, the personal sector has achieved it. It is rather like coming into our personal sector of aviation. The federal government in most components of the world has failed in aviation, together with Nigeria. And the personal sector initiative and participation is taking our aviation to the next peak.
As such, understanding that aviation shouldn’t be about who owns it, however as a catalyst and an enabler to the federal government. Take in the future or one week of no flight in Nigeria, the whole lot ends. Folks ought to perceive that reality.
As a spokesperson of AON, the individuals I signify will not be solely those that purchase their tickets and fly; they embrace these individuals working additionally within the oil sector. The core of our financial system is the oil sector. With out aviation providers within the oil sector, there might be no exploration, as a result of over 90 per cent of our oil exploration is offshore. And the entry to that offshore is thru air providers, helicopter providers and all are members of AON.
So, the query is, what else?
Even the blind and the dumb ought to know that this sector must be taken with all the eye and help that it wants. With out aviation, there would have been nothing like Dubai, United Arab Emirate (UAE) and Doha. There would have been nothing about their location on the earth. They strategically deliberate find out how to get individuals from all around the world to converge of their place.
That’s why once you take a look at their sort of plane, they’re large physique plane that may take off from wherever and fly for 18-20 hours. So, they perceive the necessity and the aim of the aviation business.
“THE ISSUE IS THAT FOR WHATEVER REASON YOU COME TO THE AIRPORT, YOU’VE GOT TO BE CIVILISED. THAT’S OUR OWN THING. WE DON’T PROVIDE NATIONWIDE SECURITY. WE DON’T HAVE OUR OWN AVIATION SECURITY. WE ARE JUST PROVIDING THIS SERVICE.”
You can’t be speaking a few $1 trillion financial system sooner or later and not using a thriving aviation business. The one individuals that may carry, facilitate, and crystallise that’s the transport system, which aviation performs a essential function. All you assume they’ll supply is taxes, levies, contravening all the opposite current protocols – IATA (Worldwide Air Transport Affiliation) and ICAO (Worldwide Civil Aviation Organisation).
That is what we thought, however after we discuss it as a result of these companies are within the arms of the personal sector, they take a look at it as if you’re saying one thing to guard your corporation. That’s not what it’s. We are attempting to attract consideration to the significance of this enterprise to the financial system for a lot of who have no idea.
However Prof, sorry to chop in once more. When you are at it on this situation of recent tax regulation and all that, innovation counts in conditions like this. Have there been any concerted efforts for the AON to unite or attain an Contract with Dangote as to essentially bridge the vitality value?
Oh, sure. I need to imagine that we’re all utilizing Dangote Jet A1. We had a gathering with Dangote. And we’re additionally trying into different revolutionary methods within the new 12 months to cut back prices. So these issues are ongoing. Curiously, he – Dangote – is sort of open and prepared to be of any particular help, the place we are able to profit extra with the refinery’s existence right here in Nigeria for optimum providers and all that. So, we had understanding and it’s figuring out.
Nicely, for us. You identified this situation of flotation of the naira and the volatility of the alternate fee. How does this influence on procurement and pricing within the airline business?
Nicely, you see, the difficulty is that the naira has been secure inside a sure margin, tolerable margin, plus minus. So, you possibly can work inside that threshold. That’s all we want. If naira goes to be N2,000, let it’s 2,000 not less than for one 12 months so we are able to plan.
We’re all witnesses to the times once you get up within the morning, you name for alternate, and so they’re telling you that is the worth by 10 o’clock. In case you name by 12 o’clock, it has modified.
So, the soundness has helped our planning. It has helped our technique. It has helped our development. There should be stability. So, in that space, we’re high quality.
However, sadly, these items are all constructed in the midst of operation and so they all mirror on the ultimate product value. And should you don’t worth your providers effectively, you’re out of enterprise.
You’ve gotten payments to pay. You’ve gotten operational prices to cowl. We’ve talked about aviation gas. You purchase and pay. If it prices me a sure sum of money to gas the plane from Lagos to Abuja, and Abuja to Lagos, I need to be capable of promote a specific amount of ticket to recoup the price of Jet A1 and different issues.
So, if I don’t worth effectively, if I carry you to Anambra throughout this Christmas, you see, I’ve 100 per cent patrol in a 180-seat plane. And I’m taking the plane again to Lagos with two passengers, two, one, ten; it’s costing me the identical gas coming and the identical gas going.
How am I going to pay Dangote? Will I’m going and inform them, ‘Market was not good right this moment. Please, forgive me.’ Is that what persons are ?
Are you saying that Nigerians misunderstand the airline business?
No, there may be a lot for Nigerians to know in regards to the airline business, even when they know. There are individuals who have no idea as a result of sure engagements turn out to be an eye-opener to lots of people who say, ‘Wow, they didn’t know.’ There are individuals who in all probability know, however they assume that what they know doesn’t matter. However what they count on should be the fact. But, these stuff you don’t management it. What it’s, is what it’s.
And there are individuals who know, however their very own form of hate, animosity, is like ‘these individuals we should carry them down.’ We see that form of, not even animosity, it’s a form of hate, envy. So, they arrive from a place of even when they know and so what? Carry them down.
So, because of this generally you’ve seen individuals, more often than not they’ve turned the airport to motor parks the place individuals begin combating at any slightest occasion. We bend backwards to supply Nigerian passengers what they can’t get in any a part of the world.
There’s no a part of the world the place you purchase an area ticket for a one-hour flight and the airline places you within the lodge. However we do this. There’s no a part of the world the place there may be drive majeure, situation of climate. They shut the airport for sundown. You get a 50 per cent low cost in your subsequent flight.
If I’ve AOG (Plane on Floor), there will not be many components of the world which have AOG on an plane.
They cancel your entire flight on that plane and proceed with the opposite flights on the plane which might be flying. And also you as a passenger train your proper and privilege of refund or different issues as established by regulation. And this regulation shouldn’t be Nigerian regulation, it’s worldwide regulation.
However right here, we begin accommodating. We begin flying additional hours. We begin stressing the crew. We begin stressing the bottom employees in order that the individuals will get to their locations. But, it’s not appreciated.
So, our pondering this 12 months (2026) is to say sufficient is sufficient. We’ll do our greatest to offer providers. However should you can’t play by the foundations, don’t fly. We’ll be joyful should you use different technique of transportation.
However the general public utilizing air journey now cite insecurity. How a lot influence has insecurity on the operation of the airline business?
Nicely, I don’t know the explanation individuals fly. However I additionally know that within the midst of that insecurity, the street is jammed with lots of people travelling by street. So, it’s a selection anyone makes to fly. There could also be insecurity, everyone knows. However the truth that there may be insecurity doesn’t imply that there aren’t any autos on the street. That there’s insecurity doesn’t vitiate your means to pay for the service. I additionally know that luxurious buses are 100 per cent full. Different floor transports are 100 per cent full. Lots of people I do know had come from one vacation spot or the opposite in their very own automobiles. So, what are we speaking about?
That shouldn’t be the explanation you now come to the airport and count on from me, as a result of all these plane operated by Nigerian Airways weren’t supplied to rescue or evacuate individuals.
However once more, past insecurity, different components of the world, America is the most important nation for aviation vacationers even internally. Does it imply that their roads will not be good? Does it imply that there’s insecurity on their roads? No, it doesn’t.
What it means is that aviation nonetheless offers important providers. It’s nonetheless a way of journey. There are nations that journey by practice. There are some nations that may nonetheless journey by sea, by water internally. However aviation continues to be there.
You can not inform me tomorrow if there may be 100 per cent peace in Nigeria, if there may be 100 per cent security on the roads, then Nigerian aviation will collapse. Is that what you imply?
The difficulty is that for no matter motive you come to the airport, you’ve received to be civilised. That’s our personal factor. We don’t present nationwide safety. We don’t have our personal aviation safety. We’re simply offering this service. And we’ve got a accountability to create an enabling atmosphere for our employees to work. These are youngsters of some individuals. These are wives. These are relations. You don’t simply come and begin molesting anyone.
We go all over the world. I journey as a lot as any Nigerian. I imply I’m within the first class of vacationers in Nigeria, whether or not it’s internationally or regionally even earlier than I turned a part of an airline.
And there’s nothing that’s occurring now that I don’t see wherever. Nevertheless, what I don’t see is how Nigerians react to conditions on the airport. I don’t see it wherever on the earth. And these people who do react additionally see these items round and preserve quiet.
Over the last Christmas season, we noticed individuals who landed in Nigeria with a international provider. And for 2, three, 4 days, they didn’t even know the placement of their baggage. However it is a particular interval that folks journey with additional baggage.
And we’re speaking about people who find themselves seasonal vacationers, who journey every year, as soon as in two years, and even three years. So, they arrive with all types of baggage. So, if that’s taken off from a specific origin, whether or not it’s America or Europe, plane, for security causes, have some weight restrictions. You need to need to have most weight of take-off and most weight of touchdown.
So, if the crew calculates that they’ll’t take greater than this as a result of the passengers have their very own weight, as a result of this is likely one of the uncommon events you have got 100 per cent full. Due to this fact, when you have much less passengers, you have got extra room to accommodate baggage. But when the passengers are there, you are taking them and drop some baggage.
For these passengers, it would take them 5 days to obtain their baggage from their international provider coming into Nigeria. Nicely, after they decide it up from Lagos or Abuja, after which need an onward journey to wherever within the Southeast, and in the event that they land on the airport and their baggage didn’t observe them on the airport, they begin combating. They might not even need you to board one other plane in the event that they don’t have their baggage with them there. In the meantime, they got here in from abroad. They didn’t have their baggage for 5 days. They did nothing. But when it’s a home flight they begin combating. We’re not going to tolerate that any extra. You need to play by the foundations, as a result of it’s the identical rule that we apply.
Have Synthetic Intelligence (AI) and machine studying any function to play to mitigate a few of these challenges these within the aviation business face?
I can let you know that we’re up-to-date with all of the technological improvements in aviation. As a matter of reality, aviation is one all around the world, as a result of should you don’t, you can’t combine or join.
So, the methods we’re utilizing will not be totally different from the methods you see all over the world. On the aspect of the plane, I imply, you possibly can see that even operators are shopping for model new plane. And people issues are solely integratable with fashionable methods. We’re utilizing state-of-the-art plane in our fleet.
You’ll be able to’t simply function if you’re not updated, as a result of the identical plane you have got right here can take off and land in London. It ought to land in America. Have a look at Air Peace that goes to America and to totally different components of the world. In case your system shouldn’t be updated and integratable, you can’t function.
So, I believe we’re nervous that possibly the bottom providers, the stationary amenities won’t be as up to date as attainable, as a result of in lots of airports of the world, you possibly can land the plane with zero facility, zero visibility.
You’ll be able to land the plane with tools assist. And our plane have all of the supporting integration, however we don’t have the bottom help. That’s why, if the climate is unhealthy in Asaba, it’s a must to look ahead to one or two, three hours for the climate to enhance, checking each hour on the hour. And by the point you already know you might be three hours behind your schedule, after which the passengers are blaming you for not being on time.
We’re not pleased with all these items.