The federal government claimed today that it didn’t have the legal power to set or change domestic airfares because the aviation industry has been fully deregulated for decades. This was in response to complaints from air travelers over what they called “outrageous” airfares in the country.
Festus Keyamo, SAN, the Minister of Aviation and Aerospace Development, said this while talking to State House reporters after the Federal Executive Council (FEC) meeting, which was led by President Bola Tinubu, in the Council Chambers of the Presidential Villa in Abuja.
According to Vanguard, the minister said that deregulation goes back to the time of former military president Ibrahim Babangida, when private airlines were initially allowed to run and establish their own ticket pricing.
He also added that the aviation industry in his country is one of the best in Africa.
He added that the Senate had asked him to come because of rising airfares, but he couldn’t since he had to give presentations to the Council first.
He said that he told the Nigerian Civil Aviation Authority (NCAA) and domestic airlines to accept the invitation in his place.
He said, “The government has no right to set prices for private businesses.” That’s what it means to deregulate. But that doesn’t mean we’re not going to talk to the airlines.
Keyamo said that operators are still dealing with a number of cost drivers, such as limited access to aircraft, bad lease deals, a lack of local maintenance facilities, and the constant need for foreign currency to do mandatory C-checks abroad. These are all things that affect ticket prices.
He said that one of the most important things that has happened since Tinubu took office is that a big international aircraft lessor has come back to the Nigerian market after almost twenty years. They are now offering a dry lease to a local carrier at a rate that is three times lower than prior offers.
The minister said that recent changes and new rules under the Cape Town Convention had made investors more confident, which led to the breakthrough.
“More airlines will be able to get planes since dry leases are getting cheaper. More planes automatically equals more competition. He stated, “And competition is what brings prices down in any free economy.” He added that passengers should start to notice the effects of a bigger fleet within the next few months to a year.
Keyamo stated that Nigeria has received a regional advice asking for relief for operators on several taxes and fees, a subject that ECOWAS had brought up.
He did say, though, that taxes are not something his government has control over.
“I can’t just wake up one day and get rid of taxes. The Federation Account gets these funds. He said, “The Finance Minister, the tax authorities, and other interested parties must all be at the table.”
Keyamo said that he had previously brought up the operators’ issues with the right people and that talks were still going on. He said that while the government is still dedicated to making things easier for the industry, it still needs to protect the money needed to keep important aviation infrastructure running.
About the Author
