High Rate Of Domestic Airlines Failure Worrisome – Keyamo

Over the past four decades, numerous domestic airlines have failed to sustain operations and gone bankrupt.

In some cases, airlines even obtained Air Operating Certificates (AOCs) but never launched their services. This trend reflects broader issues within the sector, including financial instability, regulatory challenges, and operational inefficiencies.

These were the thrust of the remarks of the Minister of Aviation and Aerospace Development, Festus Keyamo, at a conference recently hosted by the League of Airport and Aviation Correspondents which in Lagos.

The Minister inferred that the inability of these airlines to remain viable underscores the urgent need for comprehensive reforms to ensure the long-term health and sustainability of Nigeria’s aviation industry.

He also spoke on the lack of flag carriers, inadequate infrastructure, aircraft shortage, limited international connectivity and insurance challenges.

High mortality rate of local operator

For so many years we have had a lot of high mortality rates in the aviation industry, in terms of airlines coming and going under. Very high mortality.

I think more than 100 airlines have come and gone under in the last 40, 50 years. In fact, we have had some AOC holders who never came at all. They have AOC, but they never want to come at all.

And so we need to enhance their capacities. In the absence of a national carrier, in the absence of our own airlines, aviation, then we should have flag carriers within the aviation who will make us proud. And we, of course, that will service our reciprocal rights under all the different BASAs that we have.

In fact, of course, we need to enhance capacity in the industry, capacity for development. Train and retrain our technical people within the industry. And ensure that we raise their standards to global standards.

And of course, somebody just talked about revenue optimization. Without imposing extra taxes on people, let us just optimize revenue. That is why I took a memo to the council.

Maintenance, Repair Organisations (MROs)

Some have spoken about the MROs. I think it is at the heart of the improvement of our local aviation industry. We need to bring in the MROs. People are already talking with us. I don’t want to let the cat out of the bag. Very soon, we are going to advertise and call for partnership.That is the only way to go. And I think we need to call in people with money. So, for our local businessmen, our banks, financial institutions, financiers, don’t say that foreigners are coming to take your business away.

It is big business. Somebody that can take the triple sevens up. If you bring them in, you will serve the whole of West Africa.

You will serve the whole of Central Africa. You will serve a good part of Southern Africa only you can get the MROs now into Nigeria.

The Arabs, the Chinese and the Europeans are talking to us and even the Americans want to invest and you know why it has to be PPPs? Because it is difficult to establish an MRO at an independent venue, different from an existing airport. You can’t build it. Because you need a runway to get to an MRO. So, it is pretty difficult.

So, you have to talk with us for us to give you one within one of our international airports. We are in the process of doing a master plan. We are going to mark out clear areas for MROs within the international airports. So, we are telling you to come and make money. So, we are not begging for investment. Come and make money.

There is money to be made here if you bring an MRO. People can do their A, B, C checks, their D checks here without going out.

BASA

But most importantly, if you notice, there is a shortage of aircraft in Nigeria to service routes. That, I think is the major problem we are facing. The local operators are struggling to cover their routes not to talk about our international routes.

Air France is coming here 10 times a week. We are not going to Paris. Lufthansa is coming here. We are not going to Frankfurt. Delta, United, is coming from America. Nobody is going to America.

Even here, South Africa is coming here. Nobody is going to South Africa. We only managed to get the London route recently for Air Peace and we are pushing also for them to take us to Heathrow now. We are pushing. We want to make a point to them.

I am writing a letter to my counterpart in the UK. You can’t tell me that you have a slot committee. If you concession your airports, people, they should know that you have existing obligations in that airport.

And they should respect those existing obligations under the BASAs. If we give us you our tier one airport, you should give us your tier airport too. If not we will divert BA to somewhere.

You can’t tell us it is in the hands of other people, it is your airports before you concession it. You have the existing obligations before you concession it. Tell those people to respect their obligations.

Without doing that, there can’t be real connectivity. You can’t do real connectivity. But when you get them into Heathrow, people can buy a lot of tickets and then they can co-share. That is the only way you can get our local airlines to co-share with other airlines. So that there can be connectivity and you can go to other parts of the world. Right? So, for them, how can these local people compete? They need access to aircrafts. They need the capacity to acquire the aircrafts.

We want to enhance those capacities. We have gone very far. I am sure you have heard most of my interviews. I have spoken about it. I have spoken, I have been talking to the aviation group co-chaired by Boeing and Airbus  based in London.

Dry lease

We should be honest enough to the world. When you take people’s aircrafts, fulfill your obligations. If you can’t fulfill your obligations, give them their aircrafts.

Don’t spoil Nigeria for us. Under my watch, I told them we will not detain anybody’s aircrafts. We will not, whether not Cape Town Convention. One or two of them tried that recently, I said, take these aircrafts out of here. And I got commendation letters from officials around the world.

We are in the process of drafting rules now. Practicing directions to comply fully with the protocols of the Cape Town Convention so that we can be in tune with global best practices and open the doors.

Insurance

Another issue we are pursuing is insurance. To ensure that this whole issue of that insurance must be based in the local market, we bent a bit to ensure that we give lessors the assurance that they can place the risk in the international market and then we can still let them bring their aircrafts in. But the rule of NAICOM now, the Nigeria Insurance Commission, is that every risk must be placed in the local market in order to enhance our local insurance companies. But then, I apologise to say that most of them don’t have the capacity. So when you give them they go and reassure again.and that is a double amount for them too. That is why you are seeing the rise in cost of tickets. The cost is too much. That is what is translated to this high fares, ticket prices we are seeing.

So we apologise to Nigerians, but then we have a lot to do so that the prices will come down.