Why FG can’t fix airfares — Keyamo

MaTaZ ArIsInG
Dallas, Texas

…says sector has been deregulated 

Amidst concerns raised by the Senate over a sharp increase in domestic airfares, the Minister of Aviation and Aerospace Development, Festus Keyamo (SAN), has explained that the Federal Government lacks the statutory power to fix airfares.

Speaking with journalists after the Federal Executive Council (FEC) meeting on Wednesday, the Aviation Minister declared that the sector has long been deregulated.

He recalled that the aviation industry was deregulated during the military regime of General Ibrahim Babangida for seamless private sector participation.

Senate on Tuesday summoned the Minister of Aviation, Festus Keyamo, alongside key industry stakeholders, for an urgent meeting following widespread public concern over the sharp rise in domestic airfares.

The Red Chamber resolution was on the heels of a motion raised at plenary by Senator representing Oyo North and Chairman Senate Committee on Aviation,  Abdulfatai Buhari, who raised the alarm that the escalating prices threaten national mobility and could disrupt travel ahead of the festive season.

Keyamo, who acknowledged the summons by the Senate, however expressed regret that he could not appear because it coincided with the FEC meeting, but he instructed the Nigerian Civil Aviation Authority (NCAA) and domestic airlines to honour the invitation.

He said: “The government has absolutely no power to fix prices for private enterprises. That is what deregulation means. But that does not mean we are leaving the airlines without engagement.”

The Aviation Minister enumerated challenges facing local airline operators, 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.

He maintained that all these factors ultimately trigger the cost of airfares.

He, however, expressed the hope that with 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, air commuters should expect lower prices in a competitive market.

“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.”

 Responding to issues of multiple taxes and charges, recently flagged by ECOWAS, Keyamo confirmed Nigeria had received a regional advisory urging relief for operators. However, he noted that taxation falls outside the jurisdiction of his ministry.

“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.”

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