High Revenue Deductions Weakening Aviation Sector – Airline Operator

The chairman of United Nigeria Airlines, Professor Obiora Okonkwo, has called for a comprehensive review of the aviation remittance framework, warning that heavy deductions from industry-generated revenues are undermining the sector’s growth and efficiency.

Okonkwo made the appeal in Lagos during the unveiling of the airline’s newly acquired 2 Boeing 737-800NG aircraft, saying the current financial structure leaves key aviation agencies underfunded and unable to effectively discharge their statutory responsibilities.

According to him, regulators and service providers, such as the Nigerian Civil Aviation Authority (NCAA) and the Federal Airports Authority of Nigeria (FAAN), require greater financial autonomy to address operational and infrastructure gaps across the industry.

“I am hopeful that government, in view of that report, will want to consider a number of issues that we have consistently raised over the years,” he said.

He argued that aviation revenues should be largely retained within the agencies that generate them rather than being heavily deducted and remitted to the Federal Government, a practice he said weakens institutional capacity.

“We are telling the government that until aviation revenues are retained within the aviation agencies, the sector will continue to face serious challenges. The money accrued to the NCAA should remain in NCAA accounts. The money accrued to FAAN should remain in FAAN accounts,” he stated.

Okonkwo stressed that predictable and adequate funding is essential for aviation bodies to maintain safety standards, upgrade infrastructure, and meet growing operational demands across Nigeria’s aviation ecosystem.

“I say this because it is no secret that a significant percentage of the revenue generated by these agencies is remitted to the Federal Government. This leaves the agencies with limited resources to perform their duties and develop critical infrastructure,” he said.

He further noted that strengthening the financial base of aviation institutions would improve oversight, enhance airport facilities, and support safer and more efficient operations.

The United Nigeria Airlines chairman also highlighted the broader economic importance of aviation, noting that the sector plays a critical role beyond passenger transportation, particularly in supporting oil and gas operations and other strategic industries.

“Consider the role aviation plays in the economy. Much of the oil and gas industry, particularly offshore operations, depends on aviation services to transport personnel and equipment. Without aviation support, many of these activities would be difficult, if not impossible, to sustain,” he explained.

He added that aviation should be viewed as a core pillar of national development rather than a standalone commercial industry.

“Therefore, when we talk about aviation, we are not merely talking about a business sector. We are talking about a critical component of national development. This includes all the operators and service providers whose activities support key sectors of the economy,” he said.

Okonkwo also advocated for improved access to affordable financing for local operators, saying high interest rates remain a major barrier to expansion and fleet modernisation.

“In conclusion, we would also like to see policies that provide access to single-digit interest loans for aviation operators. As things stand today, loans from commercial banks are extremely expensive, making it difficult for operators to invest and grow their businesses,” he said.

He expressed optimism that addressing both the aviation remittance structure and financing constraints would significantly strengthen the sector and improve its contribution to economic growth.

“If these issues are addressed, the aviation industry will be in a much stronger position to contribute to economic growth and national development,” he concluded.