President of the Aircraft Owners and Pilots Association of Nigeria (AOPAN), Dr Alexander Nwuba, says domestic airlines operate on dangerously thin margins despite high air fares.
Nwuba made the observation during an aviation town hall webinar titled, ‘High Air Fares – Are Airlines Really the Problem?’ held on Thursday in Lagos.
According to him, Nigeria’s aviation sector faces a structural sustainability crisis, as rising operating costs and declining passenger numbers threaten domestic carriers’ survival.
He warned that public perceptions of price gouging were misleading, noting that airlines had “no room for error or equipment delays”.
Nwuba said current air fares were driven strictly by cost structures, not distance or flight time, describing affordability challenges as a new market reality.
He noted aviation fuel now accounts for about 38 per cent of operating costs, alongside aircraft leasing and maintenance, shifting the minimum sustainable ticket price.
“A Boeing 737 Lagos–Abuja flight costs about 9,000 dollars to operate,” he said, citing a 162-seat configuration.
He added that cost per seat ranges between ₦77,000 and ₦84,000 on such flights.
“For sustainability, fares must exceed ₦100,000. Anything lower reflects a low-cost model most airlines cannot currently sustain,” Nwuba said.
Presenting industry data, he highlighted a precarious financial gap facing domestic operators.
He said average figures showed cost per kilometre at ₦104, revenue at ₦112, leaving only ₦8 profit per kilometre.
“This narrow ₦8 margin means any shock, such as fuel spikes or grounded aircraft, quickly turns flights into losses,” he explained.
On passenger trends, Nwuba said domestic travel declined between 2022 and 2025, while international traffic remained stable.
He attributed the decline to air fares rising faster than real consumer incomes.
“Domestic travellers often switch to road transport when flights become unaffordable,” he said.
He noted December flights to the South-East were often 95 per cent full outbound, but return flights averaged just 35 per cent occupancy.
“This results in a combined 65 per cent load factor, below break-even, forcing airlines to raise outbound fares,” Nwuba said.
He identified reduced fleet size, caused by maintenance delays and financing constraints, as a major contributor to high fares.
According to him, the shrinking fleet has raised operational costs by up to 20 per cent.
“Without scale, airlines cannot achieve efficiencies needed for truly affordable fares,” he said.
Nwuba recommended reducing navigational and airport charges, increasing aircraft availability, and establishing expert aviation policy advisory councils.
He noted that domestic decline was driven by affordability, not airline failure, stressing that cost reduction required system redesign.
“The path forward is clear: scale, connectivity, and resilience,” Nwuba said.
The News Agency of Nigeria (NAN) reports that the webinar was hosted by Mr Sunday Foster, Avero Capital’s Principal Managing Partner.
