The federal government has announced plans to grant airlines a discount on debts owed to aviation agencies, aiming to alleviate the impact of escalating aviation fuel prices. This decision follows threats by airlines to embark on a strike due to the sharp increase in Jet A1 costs.
Meeting with Stakeholders
Minister of Aviation and Aerospace Development, Festus Keyamo, disclosed the decision after a closed-door meeting with airline operators in Abuja. The meeting included the Minister of State for Petroleum Resources, represented by Permanent Secretary Patience Oyekunle, the Director General of the Nigerian Civil Aviation Authority (NCAA), the Managing Director of the Federal Airports Authority of Nigeria (FAAN), and other industry stakeholders.
Presidential Directive
Keyamo stated that President Bola Ahmed Tinubu, during an earlier meeting, directed him to submit a memo outlining the discount to be provided to airlines on debts owed to the NCAA, FAAN, and the Nigerian Airspace Management Agency (NAMA). The minister said, “I had the privilege of meeting with Mr. President to brief him on the outcome of the meeting. He directed that a formal written request be submitted to him first thing tomorrow morning. He assured that the initial request he would consider and approve is a generous discount on the debts owed by airlines to aviation agencies, including NAMA, FAAN, NCAA, among others.”
Keyamo added, “Mr. President specifically instructed that the request should not be delayed for a council memo but forwarded to him as early as possible, with details such as the proposed percentage of the discount. He will make a final decision on this.”
Presidential Concern
The minister conveyed the President’s deep concern over the challenges facing the aviation sector, noting that Tinubu appreciated airline operators for not raising airfares despite difficult conditions. Keyamo also revealed plans to establish a committee to address longstanding issues regarding levies, taxes, and fees on domestic tickets. The committee is expected to produce a report promptly.
Jet A1 Price Hike
Regarding the increase in Jet A1 prices, the Permanent Secretary of the Ministry of Petroleum Resources stated that another meeting would be held with oil marketers to tackle the issues raised by airline operators.
Airline Operators' Response
Allen Onyema, Chairman of Air Peace and speaking on behalf of the Airline Operators of Nigeria (AON), commended the President for the discount. He called for a complete waiver of the debt until the situation regarding the Strait of Hormuz stabilizes. Onyema explained the threat to shut down operations, saying, “We threatened to shut down, not because we wanted to shut down, but because we had no money anymore to continue borrowing from banks just to pay for fuel, neglecting other essential aspects of the aviation industry.”
He highlighted the disproportionate rise in fuel prices: “The world standard is that if crude oil rises by 10%, the byproduct should rise proportionately. But in Nigeria, after the blockade of the Strait of Hormuz, Jet A1 increased by about 300%, and these airlines are bleeding.” Onyema praised the government’s support, stating, “When the minister asked us not to shut down, we obeyed immediately because this government has helped the airlines and aviation industry more than any since 1960.”
He also urged the President to increase funding to the Bank of Industry (BOI) to provide credit facilities at cheaper interest rates. Onyema added, “Marketers must explain the 300% increase, especially since Dangote’s price remains the cheapest. We will meet with them tomorrow.”
