Okonkwo Reveals Airlines’ Profit Margins Are Less Than 5% Despite Rising Ticket Prices

The chairman of United Nigeria Airlines, Obiora Okonkwo, has emphasized that airlines gain little from increases in airfare. Speaking during an interview on Arise Television, Okonkwo explained that despite recent price hikes, the airline’s profit margin remains below 5%.

Okonkwo noted that much of the criticism over rising fares stems from travelers who purchase tickets at the last minute. He explained that tickets bought well in advance are usually priced more affordably under the airline’s progressive pricing system, which is standard across the industry.

He further highlighted that the majority of an air ticket’s cost, between 60 and 80 percent, is allocated to third-party services, leaving only a small fraction to cover operational costs. Okonkwo added that only about 10 percent of ticket revenue contributes to airline operations, with profits accounting for less than 5 percent.

According to Okonkwo, the perception that airlines significantly benefit from airfare hikes does not reflect the financial realities of the industry.