The Federal Government, through the Minister of Aviation and Aerospace Development, Festus Keyamo, has unveiled efforts to tackle the rising cost of air travel, both domestically and internationally, while also focusing on enhancing safety and security at Nigerian airports.
Keyamo made the announcement during a Ministerial Press Briefing on Thursday in Abuja, where he highlighted key factors driving high airfare prices, such as limited access to affordable aircraft leasing, foreign airlines’ trapped funds, and high airport taxes.
Nigerian airlines, according to Keyamo, face significant challenges in leasing aircraft at competitive rates, often resorting to costly options like outright aircraft purchases or expensive leasing deals. These financial constraints, he said, directly impact ticket prices.
“We have domestic and international tickets. I’ve already mentioned the issue with domestic flights, where we cannot lease aircraft at an affordable rate. The only alternative is to opt for expensive leasing or aircraft purchases,” Keyamo explained. He also mentioned that solutions, such as the upcoming Cape Town Convention and the Dublin Conference, would bring positive changes in the near future.
Regarding security improvements, Keyamo shared that Abuja and Lagos International Airports had successfully achieved recertification after addressing over 130 security gaps. The recertification is part of ongoing efforts to upgrade Nigeria’s aviation safety, particularly at the country’s two major international airports.
“These two airports, along with Kano, are crucial for our international travel and will see continuous improvements in safety and security standards,” he added.
The minister also discussed the long-standing issue of trapped funds affecting foreign airlines operating in Nigeria. Due to a lack of foreign exchange liquidity at the Central Bank of Nigeria (CBN), airlines were unable to repatriate earnings from ticket sales, which were held in Naira.
“At one point, foreign airlines had a backlog of funds trapped in Nigeria for over three years. The issue wasn’t that they owed money, but the Naira equivalent of the funds was held up due to liquidity shortages,” Keyamo explained.
Thanks to the government’s policy changes, including the removal of fuel subsidies and the floating of the Naira, liquidity improved, and the government was able to clear a backlog of over $893 million in trapped funds, providing a lifeline to foreign airlines.
However, Keyamo also pointed out that foreign airlines had been inflating ticket prices for Nigerian passengers to offset the uncertainty around repatriating their funds. These price hikes were often a result of fears over currency depreciation.
“Airlines were inflating ticket prices for Nigerians because they feared that by the time they repatriated their earnings, the Naira would have depreciated further, so they adjusted their fares accordingly,” Keyamo noted. “This resulted in Nigerian passengers paying significantly more than travelers in other countries, like Ghana.”
The government is now engaging with international airlines to ensure ticket prices reflect the cleared trapped funds and are no longer inflated.
“We’ve made it clear to airlines that now that the trapped funds issue is resolved, they cannot continue to charge excessively high prices to Nigerian passengers,” he added.
The Nigerian Civil Aviation Authority (NCAA) is leading discussions with airlines to address pricing adjustments and other cost-related concerns, including high airport taxes, which Keyamo acknowledged as one of the highest in Africa.
“Taxes at Nigerian airports are extremely high, and airlines factor these costs into ticket prices, which are then passed on to passengers. This is something we need to address in collaboration with the Ministry of Finance,” Keyamo explained, emphasizing that any changes to these taxes would require coordination with the relevant authorities.
Keyamo concluded by stating that the government is committed to tackling the challenges affecting Nigeria’s aviation sector to make air travel more affordable and safer for everyone.
