Airfares may increase as NAMA announces plan to raise levy by 800%

The Nigerian Airspace Management Agency (NAMA) has announced that it will be increasing the hours of service to airlines by 800 percent, from N50,000 to N450,000 per extension.

Umar Farouk, Managing Director of the Nigerian Airspace Management Agency (NAMA), disclosed the new measures on Friday during the League of Airports and Aviation Correspondents seminar themed “Aviation Survivability Amidst a Challenging Macro-Economic Environment” held in Ikeja, Lagos.

Farouk revealed that NAMA will increase its en-route navigational charges from N2,000 and N6,000 to N18,000 and N54,000 per flight. Additionally, the charge for extending service hours for airlines will rise from N50,000 to N450,000, an 800 percent increase aimed at covering the costs of diesel and other logistics during extended service periods.

These adjustments suggest that airfares could see a significant hike, potentially by as much as 800 percent.

In January, NAMA and the Nigerian Civil Aviation Authority engaged in strategic discussions with airline operators to reassess the outdated N16,000 terminal en-route navigational charges.

“The Nigerian Airspace Management Agency relies on statutory fees for managing the airspace. These funds are generated from services we provide to the flying community. Without these funds, NAMA can’t effectively ensure the safety of our airspace,” Farouk stated. “We mainly generate these funds through the airline companies.”

He highlighted that in 2023, NAMA’s expenditures included about N21 billion in personnel costs, over N12 billion in capital costs, and more than N10 billion in overhead costs, all without Federal Government budgetary allocations.

Farouk noted that while the cost of a one-way domestic ticket has soared to between N150,000 and N200,000, NAMA’s navigational charges have remained unchanged since June 2008. He emphasized that the current economic climate necessitates these changes for NAMA to continue its operations effectively.

“Our unit rate for international flights charged for service provision is about $70, and domestic flights are charged N6,000. While NAMA recognizes the difficult economic environment in which aviation operates in Nigeria, it is equally a part of the ecosystem,” he explained. “If NAMA is to survive and continue to guarantee safety and efficiency in the airspace, it must adjust its fees.”

Farouk announced that NAMA’s proposed increases will see en-route and terminal navigation charges rise to N18,000 and N54,000 per flight, respectively. Service hour extension charges will also increase to N450,000 per extension.

“Most of NAMA’s revenue comes from en-route navigation charges (domestic and international flights) and terminal navigation charges (domestic and international flights). While international flights pay in US dollars, domestic flights pay in the Nigerian currency,” Farouk concluded.

These proposed changes are expected to impact the cost structure for airlines operating in Nigeria, further influencing ticket prices and the overall economic landscape of the aviation industry.