In a move that is likely going to stir the waters of Nigeria’s aviation industry, the Nigerian Airspace Management Agency (NAMA) has announced a substantial increase in en-route navigational charges. The new fees, which see domestic flight charges rise from N2,000 to N18,000 and international charges soar from N6,000 to N54,000 per flight, represent a significant shift in the cost structure for airlines operating in and out of Nigeria.
This change, revealed by NAMA’s Managing Director, Umar Ahmed Farouk, at the League of Airports and Aviation Correspondents (LAAC) conference in Lagos, aims to address the rising operational costs and the need for improved airspace management.
He said, “NAMA relies on statutory fees for the management of the airspace (remember that aviation takes place only in the air). These funds are generated from services we provide to the flying community, without these funds NAMA can’t discharge its responsibility of ensuring the safety of our airspace effectively. We majorly generate these funds through the airline companies.”
Tekedia Mini-MBA edition 15 (Sept 9 – Dec 7, 2024) has started registrations; register today for early bird discounts.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
Additionally, NAMA has adjusted the fees for extending operational hours at sunset airports, raising the cost from N50,000 to a staggering N450,000 per extension. This increase, intended to cover the rising costs of diesel and other logistical needs, has sparked concerns among travelers and industry stakeholders. The fear is that these hikes could translate into even higher ticket prices for both domestic and international flights, compounding an already steep increase in airfare costs.
Since 2015, the cost of flights within Nigeria has increased significantly, with some reports indicating a rise of about 1150%. International flight prices have also surged, with the same percent increase over the same period. This trend has been driven by various factors, including currency devaluation, rising fuel prices, and increased operational costs.
Earlier this year, NAMA, in collaboration with the Nigerian Civil Aviation Authority (NCAA) and representatives from the Airline Operators of Nigeria (AON), reviewed the outdated N16,000 Terminal Enroute Navigational Charges (TNS). This review, held in Abuja, aimed to update the charges to reflect the current economic realities. Airlines have acknowledged how necessary these changes are, citing the need for the fees to match the services provided and the costs incurred by NAMA.
In defense of the new charges, Farouk highlighted the critical role of efficient pricing in the aviation sector. He emphasized that NAMA’s operations are primarily funded through these fees, as the agency does not receive financial allocations from the federal government.
In 2023 alone, NAMA faced expenditures of N21 billion for personnel, over N12 billion in capital costs, and more than N10 billion in overhead costs. Farouk said despite these rising expenses, NAMA’s charges had remained unchanged since June 2008, even as ticket prices for one-way domestic flights soared to between N150,000 and N200,000.
The Many Challenges of the Nigerian Aviation Industry
The increase in en-route navigational charges comes amid other challenges that the aviation industry is grappling with.
Dr. Thomas Ogungbangbe, Chairman of the conference and CEO of CITA Aviation Fueling Ltd., outlined several challenges facing the sector. These include high fuel costs, limited access to foreign exchange, a weakening naira, and the need for continuous maintenance and infrastructure upgrades.
However, Ogungbangbe argued that while these challenges are significant, they also present an opportunity for innovation and growth within the industry.
He criticized the current focus on developing new airport projects at the expense of essential infrastructure like roads, which are crucial for improving access to airports and making air travel more accessible. Improved road networks would facilitate easier access to airports, potentially increasing air travel demand and supporting the sector’s growth.
In response to these challenges, the Minister of Aviation and Aerospace Development, Mr. Festus Keyamo (SAN), assured that the federal government is committed to supporting local airline operators. Keyamo highlighted the importance of developing Maintenance Repair Organization (MRO) facilities across the country, which he believes will significantly boost the aviation sector.
Discussions are already underway with international investors from Europe, Asia, America, and the Middle East to attract investment into Nigeria’s MRO facilities.
Keyamo also addressed issues related to bilateral air services agreements, noting that they often do not favor Nigerian airlines. He pointed out that while international carriers such as Lufthansa, Delta, and United Airlines have extensive operations in Nigeria, Nigerian airlines are often relegated to secondary routes in these carriers’ home countries.
“Lufthansa is coming here but we are not going to Frankfurt. Delta, and United are coming from America but we are not going there. South Africa is coming here with no reciprocity,” he said.