CPPE welcomes airline debt relief, urges sweeping cost reforms in aviation sector

THE Centre for the Promotion of Private Enterprise (CPPE) has commended President Bola Ahmed Tinubu for approving a 30 percent discount on outstanding debts owed by Nigerian airlines, describing the move as timely relief for operators facing mounting financial pressures.

In a statement signed on Sunday by its Chief Executive Officer, Dr Muda Yusuf, CPPE said the intervention would provide short-term respite for airlines grappling with escalating and unsustainable operating costs across the sector.

The group also praised the Minister of Aviation and Aerospace Development, Mr Festus Keyamo, for his proactive engagement with stakeholders, noting that his efforts have been impactful in addressing industry concerns.

However, CPPE warned that the debt relief does not resolve the deeper structural challenges affecting the aviation industry, particularly the high cost burden imposed by multiple taxes, fees and levies.

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According to the organisation, charges from key agencies, including the Nigerian Civil Aviation Authority (NCAA), Federal Airports Authority of Nigeria (FAAN), and Nigerian Airspace Management Agency (NAMA), account for as much as 35 percent of airline revenues, a level it described as unsustainable given the typically thin profit margins in the aviation business.

CPPE stressed that Nigeria’s aviation sector remains critical to economic connectivity, trade facilitation, investment flows and national integration. It added that growing insecurity on roads has further increased reliance on air travel as a safer alternative for many Nigerians.

Despite its strategic importance, the sector continues to experience a high rate of airline failures, reflecting what the organisation described as a hostile operating environment.

The think tank therefore called on the Nigerian government to undertake a comprehensive review and rationalisation of aviation-related charges. It listed multiple cost components, including ticket and cargo sales charges, passenger service fees, landing and parking charges, aircraft inspection fees, administrative and facility costs, boarding bridge charges, fuel-related levies, and import duties on aircraft and spare parts, as overly burdensome and fragmented.

CPPE argued that reducing both the number and scale of these charges would significantly improve the viability, competitiveness and resilience of domestic airlines. It also warned that excessive financial strain on operators could have unintended implications for safety standards.

The organisation concluded that government intervention in the aviation sector must go beyond debt relief, urging broader reforms to create a more sustainable cost structure, enhance service quality and stabilise ticket prices in the long term.