The federal government is actively exploring strategies to mitigate the soaring airfare prices in Nigeria.
During a recent address in Abuja, Minister of Aviation and Aerospace Development, Festus Keyamo, expressed the government’s commitment to addressing the issue. Keyamo emphasised the importance of implementing comprehensive measures to alleviate the burden on travellers.
Keyamo stated, “We will see what happens. I don’t want to predict doom, but we will try all we have to do, not only the dollar issue or exchange issue but within the sector and other surrounding issues within the aviation sector, to force down prices.
He further elaborated on the need for Nigeria’s aviation industry to enhance competitiveness, emphasising the potential benefits of facilitating access to favourable leasing arrangements and loans for local airlines.
He said, “Of course, we need to be competitive under those foreign rules, and I have said before how competitive we should be or how we can be more competitive by allowing our local airlines to have access to dry leases at single digits or loans at single digits.”
The Minister explained, “Our banks cannot give loans to our operators at single digits. In fact, there is no way our local airlines can compete with loans at 26 per cent.
“So how do we do it? We need to go out of this country and all over the world to try and get extra for them to compete in those rules that our partners have allowed us to compete in.
“So, if, for example, British Airways has 14 slots coming into Nigeria every week, we should have our local airlines reciprocate and have 14 slots going into the UK every week, and that competitiveness will force down the prices and all other factors we are looking at too,” he stated.
Keyamo also cleared speculations that the Central Bank of Nigeria (CBN) owed foreign airlines up to the tune of 100 million dollars, saying that although the money was not up to the said amount, the CBN has cleared it.
“It is not 100 million dollars; it was 700 and something originally, but of that money, 160 million or thereabout was being owed by the Central Bank of Nigeria.
“So that was the one the federal government was concerned about, and the government has cleared the backlog owed by foreign airlines.
“The other ones are the transactions they had with the commercial banks, the airlines, and the commercial banks that the commercial banks have not been able to give them the dollar equivalent.
“It is the naira component that they put in the commercial banks that the banks have not been able to give them the dollar equivalent and not the CBN.”
He said that the ones for the CBN are actually the ones they promised to pay during their normal weekly auction; they did so for two to three years, adding that the CBN has been able to fulfil that obligation to foreign investors. The government has shown its capacity to fulfil its dollar obligations to foreign investors.
“In order to make local airlines compete with their foreign counterparts, the government will have to go the extra length to help local airlines,” he explained.
