Why FG cannot intervene in rising domestic airfares

The Minister of Aviation and Aerospace Development, Festus Keyamo, says the Federal Government has no legal authority to reduce domestic airfares despite widespread complaints from travellers.

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He explained that Nigeria’s aviation industry operates under a deregulated framework that places fare-setting entirely in the hands of private airlines.

Speaking to State House correspondents on Wednesday after the Federal Executive Council (FEC) meeting in Abuja, Mr Keyamo said the government has no authority to set fares for private airlines.

“Government has absolutely no powers to fix prices for private enterprises. That is what deregulation means,” he explained.

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He confirmed that he was invited by the Senate to address lawmakers on the rising fares but did not attend because he was presenting memos to the Council. According to him, the Nigerian Civil Aviation Authority (NCAA) and domestic carriers were directed to honour the invitation in his place.

Structural pressures behind current fares

The minister attributed the high ticket prices to several long-standing operational constraints, including limited access to aircraft, expensive leasing conditions, the absence of local heavy-maintenance facilities, and airlines’ dependence on foreign exchange for mandatory C-checks overseas.

He said one local airline recently secured a dry-lease aircraft from Aercap, a global leasing company that had not operated in Nigeria for years. According to him, the lease was cheaper than what operators previously accessed, but he did not provide details on fleet size or projected market impact.

On the broader issue of fares, Keyamo also stressed: “The only thing that can drive prices down in a free economy is competition. So in the next few months, or within the next one year, I expect that we will have more aircraft to service more routes and force down the prices by pure competition. We are going to do that, I assure you.”

On ECOWAS’ circular urging member states to consider tax relief for airlines, he said the bloc cannot compel Nigeria to alter its revenue structure.

“All the taxes we collect go into the Federation Account,” he said, adding that consultations with fiscal authorities are ongoing.

He stressed that the aviation ministry alone cannot remove taxes on operators.

Aviation analysts say the structure of Nigeria’s domestic airline market limits government’s role in pricing.

The sector was deregulated in the late 1980s under the General Ibrahim Babangida administration to encourage private participation, removing federal control over ticket rates.

The Civil Aviation Act 2006 later reinforced this approach by assigning the aviation ministry and NCAA with safety and economic oversight functions, leaving airlines to determine fares based on operating conditions.

READ ALSO: Securing Heathrow Airport slot for Air Peace took several months – Keyamo

FEC approves airport and safety upgrades

Mr Keyamo announced several approvals issued by the Federal Executive Council, including a two-year extension of maintenance services by CCECC for the new terminal at Aminu Kano International Airport. The company originally constructed the terminals in Abuja, Lagos, Kano and Port Harcourt and was contracted to maintain key systems while training Nigerian personnel.

The council also approved the procurement and installation of an Advanced Surface Movement Guidance and Control System (ASMGCS) for use alongside surface-movement radars already being installed in Lagos and Abuja.

Other approvals include a modular air-traffic-control tower cabin for eight airports, an aeronautical frequency-spectrum monitoring and interference-detection system, and the upgrade of Very High Frequency (VHF) radio communication systems in Lagos, Port Harcourt, Ilorin, Abuja (two sites), Kano, Maiduguri, Sokoto and Makurdi.

FEC further endorsed the expansion of biometric e-gates at international airports. Mr Keyamo declined to disclose contract sums.