Calls for an Aviation Development Fund are gaining attention after former Managing Director of the Nigerian Airspace Management Agency (NAMA), Roland Iyayi, criticised the current five per cent Ticket Sales Charge (TSC), describing it as an unsustainable burden on Nigeria’s domestic airlines.
Iyayi, who now serves as a trustee of the Airline Operators of Nigeria (AON), argued that the existing Ticket Sales Charge has outlived its original purpose and no longer supports the growth of Nigeria’s aviation industry.
The Ticket Sales Charge is a statutory levy collected on every airline ticket sold in Nigeria by airlines on behalf of the Nigeria Civil Aviation Authority (NCAA). According to him, the country’s aviation market is not mature enough to sustain an ad valorem charging system based on a percentage of ticket sales.
Iyayi maintained that airlines are already facing severe financial pressures, making the current five per cent levy difficult to sustain.
He explained that airlines continue to grapple with rising operational costs, particularly aviation fuel, which accounts for roughly 40 per cent of operating expenses depending on the aircraft type. Referring to the recent surge in fuel prices, he noted that many operators have had to borrow funds simply to purchase fuel and keep aircraft in service. According to him, introducing percentage-based charges into an industry with slim profit margins only creates further distortions.
The aviation expert proposed replacing the current Ticket Sales Charge with a dedicated Aviation Development Fund that would focus solely on financing infrastructure projects across the sector.
He suggested that the fund should operate independently of government revenue accounts, ensuring that all proceeds are reserved for airport and aviation infrastructure development. Under the proposal, revenue generated from airline operations would provide a steady funding source for infrastructure upgrades over the next decade without depending on annual government budget allocations.
Iyayi argued that no airline industry anywhere in the world consistently delivers profit margins high enough to justify a five per cent ad valorem levy. According to him, even the world’s most profitable airlines typically record margins of about 2.5 per cent, making Nigeria’s charging structure unrealistic. He stressed that Nigeria should avoid copying policies from advanced aviation markets without considering the realities of its own developing industry.
The former NAMA boss also questioned the evolution of the Ticket Sales Charge, noting that although it was introduced several decades ago to support aviation development, it eventually became embedded in law during reforms to the NCAA Act in 2006. He argued that the current framework has failed to deliver its intended objectives and requires comprehensive restructuring rather than minor adjustments.
Iyayi said a properly structured Aviation Development Fund would enable the sector to finance critical airport and navigation infrastructure consistently, regardless of government budgetary constraints.
According to him, such a model would strengthen long-term planning, reduce reliance on direct government funding and position Nigeria’s airports for sustained growth as passenger traffic expands. He maintained that restructuring the existing levy into a transparent infrastructure-focused fund would provide greater value to both airlines and the broader aviation industry while supporting future sector development.
