Former Managing Director of the Nigerian Airspace Management Agency (NAMA), Roland Iyayi, has called for a comprehensive review of the five per cent Ticket Sales Charge (TSC), arguing that the current levy has become unsustainable for domestic airlines and no longer serves its original purpose.
Iyayi, who is also a trustee of the Airline Operators of Nigeria (AON), urged the Federal Government to replace the existing system with an Aviation Development Fund dedicated exclusively to financing critical infrastructure projects across the country’s aviation industry.
The Ticket Sales Charge is a statutory levy collected on every airline ticket sold in Nigeria by carriers on behalf of the Nigeria Civil Aviation Authority (NCAA). Speaking on the issue, Iyayi said Nigeria’s aviation market lacks the level of profitability and maturity required to sustain an ad valorem charging system, noting that many local airlines are already under severe financial pressure.
According to him, the five per cent levy has become counterproductive, describing it as a policy that has failed to deliver the infrastructure improvements it was originally intended to support. He argued that airlines are operating in a challenging environment where rising operational costs, particularly aviation fuel, continue to threaten business sustainability.
“The structure of that TSC should be changed completely,” Iyayi said, explaining that the global airline industry operates on thin profit margins, with even the world’s most profitable carriers recording margins of about 2.5 per cent. He maintained that imposing a five per cent ad valorem charge on airlines in an emerging aviation market like Nigeria creates distortions that the industry cannot absorb.
Iyayi pointed to the recent increase in aviation fuel costs as an example of the financial strain facing operators, noting that airlines have had to borrow funds to purchase fuel, which accounts for roughly 40 per cent of their operating expenses depending on aircraft type.
He also questioned the continued comparison of Nigeria’s aviation market with those of developed countries, insisting that local realities require policies tailored to the country’s stage of economic and industry development. Reflecting on the history of the levy, Iyayi said the Ticket Sales Charge was introduced more than four decades ago but later became embedded in the legal framework governing the NCAA during the 2006 legislative process.
Rather than maintaining the existing structure, he proposed creating an Aviation Development Fund that would operate independently of government revenue accounts, ensuring that all proceeds are reserved solely for aviation infrastructure projects.
According to him, such a funding model would provide a sustainable source of financing for airports and other critical facilities over the next decade, reducing dependence on annual government budget allocations. He added that a dedicated infrastructure fund would allow the aviation sector to grow steadily while enabling Nigeria’s airports to meet international standards without placing additional pressure on public finances.
