Nigeria’s aviation industry has experienced its first contraction in nearly two years, with the air transport subsector shrinking by 47.3% in nominal terms during the first quarter of 2026. This downturn erases much of the recovery momentum seen in 2025.
Data from the National Bureau of Statistics' latest Gross Domestic Product (GDP) report reveals that this performance is the subsector’s first nominal contraction since the 8.92% decline recorded in Q1 2024, breaking a streak of seven consecutive quarters of growth.
Despite Nigeria’s overall economy growing by 3.89% in real terms in Q1 2026, and the broader transportation and storage sector remaining positive, the aviation industry faced significant headwinds. Air transport generated N55.74 billion in economic output, a substantial drop from N105.77 billion in the same period of 2025.
The sector's contribution to the national economy also weakened, accounting for 0.05% of nominal GDP in Q1 2026, down from 0.11% a year prior. Even when adjusted for inflation, real output declined by 7.62% year-on-year, a worsening trend from the 0.81% contraction in Q1 2025.
Meanwhile, the Airline Operators of Nigeria (AON) has rejected claims by the Nigerian Civil Aviation Authority (NCAA) that domestic airlines owe outstanding charges for regulatory services. AON stated that airlines pay for all regulatory services upfront and accused the NCAA of creating a misleading impression.
The disagreement follows the NCAA’s recent “no-pay-no-service” directive against 11 domestic airlines, including Air Peace, Ibom Air, Arik Air, United Nigeria Airlines, Max Air, Rano Air, NG Eagle, ValueJet, Overland Airways, Umza Air, and Caverton Helicopters. The directive was temporarily suspended after consultations with stakeholders.
AON clarified that the core of the dispute lies with the five percent Ticket Sales Charge (TSC), which airlines collect on behalf of the NCAA from passengers. The association described this charge as a tax rather than a direct service payment to airlines.
The operators highlighted that rising operational costs, foreign exchange challenges, and increasing Jet A1 aviation fuel prices have made remittances difficult. They have appealed to the federal government for relief, with President Bola Tinubu approving a 30% concession on some charges.
AON also called for amendments to the Civil Aviation Act to allow the NCAA to collect its charges directly from passengers, thereby reducing the banking and transaction costs borne by airlines acting as collection agents.
