The federal government lacks the legal authority to determine prices of domestic airfares in a deregulated market, Minister of Aviation and Aerospace Development, Mr Festus Keyamo, has said.
The minister said this Wednesday whilst briefing State House correspondents at the end of the Federal Executive Council (FEC) meeting chaired by President Bola Ahmed Tinubu.
The minister said the country’s aviation sector has been fully deregulated by administration of former military president, Ibrahim Babangida, when private airlines were first granted freedom to operate and set their own ticket prices.
“Government has absolutely no powers to fix prices for private enterprises. That is what deregulation means. But that does not mean we are leaving the airlines without engagement,” he said.
He said operators continue to grapple with several cost drivers, including limited access to aircraft, unfavourable lease arrangements, lack of local maintenance facilities and the persistent need for foreign exchange to conduct mandatory C-checks abroad, which ultimately reflect in ticket pricing.
He said one of the most significant developments under the Tinubu administration is the return of a major international aircraft lessor to the Nigerian market after nearly two decades, granting a dry lease to a local carrier at a rate three times cheaper than previous offers.
The minister attributed the breakthrough to recent reforms and new practice directions under the Cape Town Convention that have boosted investor confidence.
“With cheaper dry leases coming in, more airlines will have access to aircraft. More aircraft automatically means stronger competition. And competition is what brings prices down in any free economy,” he said, adding that passengers should begin to see the impact of increased fleet capacity within the next few months to a year.
On multiple taxes and charges, the minister said Nigeria had received a regional advisory urging relief for operators.
“I cannot wake up one morning and abolish taxes. These revenues go into the Federation Account. The Finance Minister, the tax authorities, and other stakeholders must all be at the table,” he said.
The minister said he had already escalated operators’ concerns to the relevant authorities and that discussions were ongoing, stressing that while government remains committed to easing industry challenges, it must also safeguard the revenue needed to maintain critical aviation infrastructure.
