Aerial survey methods for census of wildlife populations are widely used to manage species. There has been considerable research to develop methods to cope with imperfect detection during aerial surveys, however misidentification remains an unresolved but significant issue. Using data from a comprehensive dugong aerial survey of the coastline of the Northern Territory, Australia, we assessed the influence of observer, sighting and environmental variables on probabilities of both observers in double-count, dual-observer teams detecting dugongs and dolphins ('duplicate sighting probability'), the confidence with which observers could distinguish between dugongs and dolphins, and the reliability of post-detection observations by comparing data between observers. Dolphin duplicate sighting probability varied dependent on group size, Beaufort sea state and the lateral position inside the strip-width transect in relation to the aircraft. Dugong duplicate sighting probability varied across dual-observer teams. Counts of individuals in dugong and dolphin groups were unreliable past approximate to 5 individuals. Observer confidence in taxon identification varied by individual observer and throughout the duration of the survey (dolphin sightings) and potentially by the lateral position inside the transect strip-width in relation to the aircraft (dugong sightings). The probability of taxon identification disagreement between observers for duplicate dugong and dolphin sightings varied with group size, and markedly if one observer was uncertain (i.e. not 100% confident) of their assigned taxon. We believe this is predominately due to the presence of Australian snubfin dolphins (Orcaella heinsohni) in the survey area, which look like dugongs when seen from a distance, momentarily. We further show that application of different data filtering scenarios for uncertain taxonomic identifications and taxon identification disagreements between dual observers produces highly variable estimates of observer-specific dugong detection probability (ranging from 0.26 to 0.80 in a single observer) and dugong abundance ((x) over bar +/- S.D., 40% +/- 25%: difference between highest and lowest estimate, relative to the lowest estimate, across different data filtering scenarios). These results are particularly relevant not only to researchers conducting dugong aerial surveys, but also for other marine mammal aerial surveys in passing mode that target sympatric, morphologically similar species. We recommend development of operating procedures and analytical methods to quantify and adjust for misidentification and uncertain taxon identifications.