FG, foreign airlines begin talks over rising fares

The Federal Government, through the Minister of Aviation and Aerospace Development, Festus Keyamo, has disclosed ongoing efforts to address the high cost of air tickets for both domestic and international travel while also announcing enhancements in airport safety and security.

Keyamo disclosed this in his remarks at the Ministerial Press Briefing on Thursday in Abuja.

Speaking on the issue, he outlined key factors contributing to exorbitant fares, including limited access to affordable aircraft leasing, trapped funds of foreign airlines, and high airport taxes.

Keyamo noted that Nigerian airlines struggle to lease aircraft at competitive rates, forcing them to opt for costly leasing or the outright purchase of aircraft, which ultimately affects ticket prices.

“We have domestic tickets, and we have international tickets. I talked about domestic tickets and the fact that we don’t have access to lease aircraft at a very cheap cost.

We will only go for the very expensive option of leasing aircraft or buying aircraft. We are addressing that. We will see the results very soon with the Cape Town Convention and the Dublin Conference we are going to. The deals are coming in, so we will see the results then,” he said.

He said efforts were also ongoing between the government and foreign airlines to address the cost of airfares.

Keyamo also exposed how foreign airlines had deliberately inflated ticket prices for Nigerian travelers due to uncertainties over when they would be able to repatriate their earnings.

“We called international airlines and asked what they used to do. They said if you want to buy international tickets, you will see business class Z, grade J, different grades, but it’s all the same. One can be N2m cheaper than the other. Those ones, they opened it for countries they knew that once they sold the ticket, they could get their money immediately. But they now opened only the high fare for Nigerian passengers since the last 3-4 years,” he revealed.

According to him, airlines set high ticket prices for Nigerian passengers because they feared currency depreciation would erode the value of their earnings before they could convert them to dollars.

“They said because they were taking into account inflationary rates of the money that will be trapped, they don’t know where they will get the money back, so they were building on top of it, inflationary rates, that by the time they want to get the money back, the naira may have collapsed. So instead of selling a ticket for N2m or N3m, they will sell it for 7m. Whereas Ghana will sell it for that price. Ghana is cheaper than Nigeria. This was an issue of policy,” he said.

To reverse the trend, the government is actively engaging with international airlines to ensure that fares for Nigerian passengers reflect the cleared backlog of trapped funds.

“President Bola Tinubu, being very smart on this, cleared that first. And so we called them and said, look, it was recently we called them, you have been enjoying this high price because Nigerians were paying. So by the time we cleared this thing, they were still enjoying the high fares. We said, no, you cannot continue to enjoy it. We have cleared the backlog, so you cannot continue to open up the high tickets only to Nigerian passengers,” Keyamo stated.

He said the Nigerian Civil Aviation Authority is leading discussions with airlines to ensure they adjust their pricing, while also addressing other cost-related issues, including taxation.

“So that discussion is going on now. NCAA is championing that, and I think they held a parliament with them recently on that, with one or two other factors in terms of high taxation. Our airport, they say, is the highest in Africa, their taxes,” he said.

He acknowledged that high government-imposed taxes at Nigerian airports contribute to expensive tickets. However, he clarified that addressing these taxes would require collaboration with the Ministry of Finance.

“Nigerian Airspace Management Authority and the Federal Airport Authority of Nigeria are looking at them to see what we can do about it. Because it’s not my call. We have to talk to the Minister of Finance to do that. So, don’t look at the Aviation Minister alone. I’m not in charge of revenue. I have no right to say I will reduce revenue. The money is not my money,” he added.

He further noted that airlines factor these high taxes into ticket prices, passing the costs on to passengers.

“The taxes imposed in our airports and navigation routes, they say, is one of the highest in Africa. And the airlines come here, they bill that too because they have to pay. And that trickles down to the passengers. So we will tackle that,” Keyamo noted.