Why airline ticket prices fly high

Nigeria ranks among countries with the highest taxes levied on flight tickets on short and long haul flights, a 2015 report released by UHY (Urbach Hacker Young International) shows. This is even so when compared with what is obtainable in Canada, USA, and Spain.

With a whopping $20, Nigeria is charging more in airport taxes and fees than the average from the 7 most industrialized countries in the world.

For instance for a Lagos to Owerri return flight, the total taxes and fees of NGN 13, 214 were broken down as VAT NGN 929; Sales Tax NGN 869; Government Surcharge of NGN 7,476; and Airport Service Charge of NGN 4,000 on one of the local airlines as at early September 2016.

The base fare was quoted as NGN 17,386. Thus, the total ticket price for a Lagos to Owerri return flight with priced at NGN 30,600 with taxes and fees accounting for 43% of the airfare.

In the press release accompanying the UHY report, the popularity of an airport’s geographical location was listed as one of the reasons for steep taxes. Does this imply that an airport in a major city hub such as Murtala Mohammed airport will be taxed more?

Another search was done for a return trip with Arik Air from Abuja to Benin and the taxes accounted for 34% of the total airfare. Switching up cities, taxes on a Calabar to Kano return trip raked in 41% of the price ticket. The marginal difference of less than 10% is too small to account for higher taxes in densely populated geographic locations.

Airlines have been accused of passing on certain costs to passengers under the guise of government taxes and fees. If this is the case, it is about time that more transparency and uniformity is introduced into the Nigerian aviation taxation system.

A Lagos to Owerri flight search display a total fare of NGN 31,674 and NGN 30,600 on Arik and Dana Air respectively. However, a tax disparity is seen for the taxes displayed by Arik account for 35% of the total fare, while Dana tells a different story with 43% of the ticket accredited to taxes and fees. Of course, one can correctly argue that the demand for certain airlines over another can result in differences in flight ticket prices. Such a difference would be easily forgiven when tucked into the base fare and not the mysterious subtotal known as taxes and fees.