The Federal Government (FG) has clarified that it lacks the legal authority to regulate or fix domestic airfares, stating that the aviation sector has been fully deregulated for decades. Minister of Aviation and Aerospace Development, Festus Keyamo, SAN, made this clarification while briefing State House correspondents after the Federal Executive Council (FEC) meeting on Wednesday, December 10, presided over by President Bola Tinubu.
Keyamo’s statement came against the backdrop of lamentations by air travelers over what they described as outrageous ticket prices. He explained that the deregulation, dating back to the Ibrahim Babangida administration, means the government “has absolutely no powers to fix prices for private enterprises.”
Minister Keyamo explained that the policy of deregulation, which grants private airlines the freedom to set their own ticket prices, originated during the administration of former military president Ibrahim Babangida. Keyamo stated: “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 acknowledged that the soaring prices reflect significant structural cost drivers for operators, which include limited access to aircraft, unfavourable lease arrangements, the lack of local maintenance facilities, and the persistent need for foreign exchange to conduct mandatory C-checks abroad.
Minister Keyamo noted a significant development that promises relief for the aviation sector: the return of a major international aircraft lessor to the Nigerian market after nearly two decades. This return has already resulted in a dry lease being granted to a local carrier at a rate three times cheaper than previous offers. Keyamo attributed this breakthrough to recent reforms and new practice directions under the Cape Town Convention, which have successfully boosted investor confidence in the Nigerian market.
Minister Keyamo predicted that the return of major lessors and cheaper dry leases “will naturally lead to lower fares.” He explained the mechanism: “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.” The Minister expects passengers to begin seeing the impact of this increased fleet capacity within the next few months to a year.
On the issue of multiple taxes and charges—recently flagged by ECOWAS—Keyamo acknowledged the regional advisory but noted that taxation falls outside his ministry’s jurisdiction. He stated, “I cannot wake up one morning and abolish taxes… The Finance Minister, the tax authorities, and other stakeholders must all be at the table.”
Keyamo confirmed he has escalated operators’ concerns to relevant authorities, stressing the need to balance easing industry challenges with safeguarding the revenue required for critical aviation infrastructure maintenance.
