Nigeria’s Minister of Aviation and Aerospace Development, Festus Keyamo, has stated that a significant factor affecting air ticket prices in the country is the lack of capacity among private airline operators.
This insufficient capacity, according to the Minister, results in a shortage of aircraft available to operators.
Speaking on the issue in an interview with ARISE News on Tuesday, Keyamo explained the historical context contributing to this situation, stating that the lack of capacity “was also leading to shortage of aircraft”. Addressing Nigerians directly, he elaborated on the reasons behind the prevalence of older aircraft. He said “the reason why that was happening is that the world lacked confidence in the Nigerian judicial system and the aviation system”.
He further clarified that leasers felt “their equipment here were not safe enough because in the past Nigerians were used to taking this aircraft bringing them to Nigeria and then it was difficult for these leasers to take their aircraft back”.
Minister Keyamo highlighted that approximately 98% of aircraft used by Nigerian airlines are leased, not fully owned, a practice he noted is common globally, stating, “all the aircrafts you see flying in Nigeria perhaps only 2% is fully owned. 98% of them are are leased. it’s like that all over the world. Even the biggest airlines… do not own aircraft”.
He said because of the historical lack of confidence in Nigeria’s system for recovering leased aircraft, leasers were hesitant to bring newer, more expensive planes. As the Minister put it, “If they don’t have too much confidence in your system you will see this old aircraft. the ones they say that if they don’t bring it back, I’m not losing too much”.
However, Minister Keyamo pointed to significant policy reforms undertaken by the current administration to build international confidence. He mentioned the implementation of the Cape Town Convention practice direction and the Irrevocable Deregistration and Export Request Authorisation (IDERA). He stated that these reforms were aimed at improving the ease of doing business and restoring confidence in the aviation ecosystem.
These actions have led to a dramatic improvement in Nigeria’s rating by the Aviation Working Group, which assesses countries for foreign investors and financiers. Before these reforms, Nigeria’s rating was 49.5%. Following the implementation of the Cape Town Convention practice direction and IDERA, the rating has increased to 75.5%, which the Minister proudly declared is “officially the highest in Africa”. He asserted, “our jurisdiction is the best in Africa now in terms of aircraft leasing and all of that”.
Despite these positive developments, the Minister acknowledged that the immediate impact is affected by a global shortage of aircraft. He noted that manufacturers like Boeing, Airbus, and Embraer have significant order backlogs. He expressed optimism that Nigeria would soon benefit from the reforms, potentially aided by new players like China’s COMAC.
While stressing the impact of capacity issues, Keyamo also acknowledged other factors mentioned by airline operators, such as operating costs, taxes, and charges. He noted that “These were the things that existed before we came to office”. Recognising that “the president is also extremely concerned about multiple taxation,” a committee is currently working on streamlining some of these taxes in the aviation sector.
This matter has been referred to the relevant authorities in charge of taxes, as the Minister of Aviation has limitations in this regard, he said.
Chioma Kalu
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