Minister of Aviation and Aerospace Development, Mr. Festus Keyamo, has dismissed myths surrounding the perceived risks attributed to Nigerian airlines by lessors, emphasising their reliability and commitment to international standards.
Speaking at the Aviation Economics Conference in Dublin during the Aviation Working Group (AWG) panel session, held earlier this week, Keyamo highlighted that numerous Nigerian airlines operate their fleets under Aircraft, Crew, Maintenance, and Insurance (ACMI) agreements without defaulting. This adherence to contractual obligations demonstrates the responsibility and viability of Nigerian carriers.
He said, “The risks perceived by the global community are not reflective of the reality in Africa and specifically Nigeria. Our airlines are able to meet their obligations under ACMI agreements, which include various financial responsibilities. For instance, airlines such as Air Peace and Arik Air have successfully maintained their operations under these agreements, showcasing their competence and the robustness of our traveling population.”
Addressing the issue of insurance, Keyamo revealed ongoing discussions with local and international insurance stakeholders present at the conference. “We are working diligently to assess whether we can place insurance risks within the local Nigerian market or explore other options with regulators. This conversation is crucial in untangling the challenges we face, including the issue of withholding tax, which currently imposes a higher rate on our airlines compared to their global counterparts. For example, airlines in Nigeria face a 10% withholding tax, while many airlines in other regions operate under more favorable tax conditions.”
Keyamo’s efforts are driven by the mandate given to him by President Bola Ahmed Tinubu, who has emphasized the importance of positioning Nigeria as a key player in the global aviation sector. When discussing Nigeria’s potential as a West African aviation hub, Keyamo expressed optimism about the country’s strategic advantages.
“We are naturally positioned to be the hub of Africa. While we acknowledge that we are late to the party compared to countries like Ethiopia and Angola, Nigeria’s population of over 200 million, ambition, and geographical location uniquely qualify us for this role. Our location allows us to connect equidistantly to all parts of the world, making it an ideal transit point for international travelers.”
He further outlined an ambitious plan to concession airports and transform them into major hubs. “Most of the largest airports globally are managed through concessions rather than by governments. The President of Nigeria, Bola Tinubu, supports these efforts, encouraging us to invite leading global players to manage and expand our airports. This strategy aims to enhance efficiency and improve service delivery, ultimately making our airports competitive on a global scale.”
While Keyamo’s vision is promising, he acknowledges the challenges ahead. “We are aware of the obstacles we face, including outdated infrastructure and regulatory hurdles. However, we are committed to addressing these issues through collaboration with stakeholders and targeted reforms.”
With a clear vision and commitment to overcoming existing challenges, Minister Keyamo is paving the way for Nigerian airlines to thrive on the global stage, reinforcing their role as reliable partners in the aviation industry. He invites investors and global partners to join in this transformative journey to elevate Nigeria’s aviation sector.
