By Our Reporter, With Agency Reports
THE FEDERAL Government has successfully moved to avert a looming shutdown of the domestic aviation sector, with President Bola Ahmed Tinubu agreeing in principle to a significant debt write-off for airlines and a comprehensive review of the multiple taxes burdening the industry.
The resolution followed a high-level emergency stakeholders’ meeting convened in Abuja on Wednesday by the Minister of Aviation and Aerospace Development, Festus Keyamo.
The talks were triggered by a stark warning from the Airline Operators of Nigeria (AON), which had threatened to suspend operations nationwide starting April 20 over the “astronomical and unsustainable” rise in the price of Jet A1 fuel.
At the heart of the crisis was a more than 300 per cent spike in aviation fuel costs, which surged from ₦900 per litre in late February to as high as ₦3,300 per litre, a rise the operators labelled as “artificial” and far exceeding global market trends.
Following an urgent briefing from Minister Keyamo, President Tinubu moved to address the core financial distress of the carriers.
Keyamo announced that the President has agreed to grant a “generous discount” on the substantial debts domestic airlines owe to key government agencies, including the Nigerian Airspace Management Agency (NAMA), the Federal Airports Authority of Nigeria (FAAN), and the Nigeria Civil Aviation Authority (NCAA) .
“Mr. President mandated us to quickly bring a request to him. The first request that he will consider and grant is a generous discount on the debts the airlines are owing the aviation agencies,” Keyamo told reporters after the meeting, noting that the specific percentage of the write-off will be determined by the President once the formal request is submitted.
In a move aimed at providing long-term relief for both carriers and passengers, the government also agreed to establish a committee to overhaul the fiscal framework of the industry.
The committee will review the myriad of taxes, levies, and fees charged on domestic flight tickets, which currently make Nigerian tickets among the most expensive in the region.
Industry stakeholders have long complained that approximately 35 per cent of an airfare consists of taxes and statutory charges.
“Mr. President will put the team together, and he’ll give them a deadline to report to him as quickly as possible on the government fees and charges and levies that we can remove from domestic tickets for now to give respite to Nigerians,” Keyamo stated.
While welcoming the government’s intervention, the operators, led by Air Peace Chairman, Mr Allen Onyema, pushed for more aggressive relief.
Onyema requested a total waiver of all outstanding debts rather than a percentage discount. He also highlighted the crippling cost of borrowing in Nigeria, noting that while global airlines access capital at around 3 per cent, domestic carriers are forced to borrow at 30 to 35 per cent.
“Mr. President should please help us to fund the Bank of Industry (BoI). That is the only bank that is still doing single-digit or at least 10 per cent interest to airlines. But they don’t have funds now,” Onyema pleaded.
The crisis is not solely financial. The meeting also addressed the direct pricing of Jet A1. The Minister of State for Petroleum Resources (Oil), represented by Permanent Secretary, Patience Oyekunle, confirmed that fuel marketers and government officials will hold another round of talks on Thursday to resolve the disputes over pricing.
The operators have accused marketers of profiteering, pointing out that while global crude prices have risen by roughly 30 per cent due to the Iran war, local jet fuel prices have increased tenfold.
The agreement has temporarily eased tensions, as the AON had previously stated that airline revenues were insufficient to cover the cost of fuel alone, with one carrier already having grounded all operations since March 13 due to the fuel squeeze.
