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JUST IN: FG gives condition for Air Peace, others to slash ticket costs as Dangote Refinery hits market

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

The Nigerian federal government is actively investigating ways to slow down skyrocketing flight costs.

Festus Keyamo , the minister of aviation and aerospace development, recently stated this in an address in Abuja.
He said that the government is committed to resolving the matter.

In a Tribune report, Keyamo emphasised the significance of putting in place all-encompassing measures to lessen the load on travellers.
Keyamo stated:

“We will see what happens. I don’t want to predict doom, but we will try all we have to do, not only the dollar issue or exchange issue but within the sector and other surrounding issues within the aviation sector, to force down prices.”

He discussed the necessity for Nigeria’s aviation sector to become more competitive, highlighting the possible advantages of making it easier for local airlines to obtain loans and favourable lease agreements.

He said:

“Of course, we need to be competitive under those foreign rules, and I have said before how competitive we should be or how we can be more competitive by allowing our local airlines to have access to dry leases at single digits or loans at single digits.”

“Our banks cannot give loans to our operators at single digits. There is no way our local airlines can compete with loans at 26 per cent.

“So how do we do it? We need to go out of this country and worldwide to try and get extra for them to compete in those rules that our partners have allowed us to compete in.

“So, if, for example, British Airways has 14 slots coming into Nigeria every week, we should have our local airlines reciprocate and have 14 slots going into the UK every week, and that competitiveness will force down the prices and all other factors we are looking at too.”

To make local airlines compete with their foreign counterparts, he explained that the government must go the extra length to help regional airlines.

This comes amid the expectation that the Dangote Refinery will soon hit the market. The refinery recently confirmed securing marketers and depot operators for distributing petrol, diesel and other petroleum products as it hit the market.

John Ojikutu, general director of Centurion Security and Safety Consults, told BusinessDay that removing the influence of those who profited greatly from fraud involving oil subsidies is crucial to any chance of a decrease in airfare.

To maximise profits, he cautioned that leaks like gasoline diversion to neighbouring countries must be stopped if Nigerians and airlines alike are to gain.

Aviation analyst Sindy Foster ruled out the likelihood of decreased domestic airfare when airline operators begin receiving aviation fuel from the Dangote refinery.

She stated that foreign exchange rates, not the availability of local aviation fuel, will primarily determine domestic airfares.

She also said it would be hard to forecast how much airline tickets will cost because the Dangote Refinery hasn’t established a selling price for its aviation gasoline

Titus Olowokere, an engineer and the president of the US-Africa Trade Commission, said the availability of aviation fuel isn’t the only factor likely to force down the price of a flight ticket.

He said other components, such as airport fees, taxes , and regulatory policies, would all play a significant role in determining this in 2024.
Olowokere said:

“However, while the availability of locally produced Jet A1 fuel could contribute to lower fuel costs for airlines, other factors such as airport fees, taxes, and regulatory policies also play a significant role in determining airfare prices. So, it’s not an absolute impact.”

Legit.ng reported that NG Eagle Airline has recently launched its services, marking a significant advancement for the Nigerian aviation industry .
The commencement of the airline’s operations, as revealed in a statement by its Managing Director, Capt. A.E. Dare aims to enhance connectivity and convenience for travellers.

He added that the airline hopes to address the gap in domestic travel by offering cost-effective fares and providing passengers with high-quality services.