8 Key Reforms in the Aviation and Aerospace Sector Under Festus Keyamo

Author: Opeoluwa Dapo-Thomas

In a democracy, accountability is cardinal. Citizens often grow impatient with high expectations. After only a month in office, the Minister of Petroleum is expected to increase oil production from 1.5 million to 2.5 million barrels a day, the Minister of Power is expected to provide 24/7 electricity without raising tariffs, and the Minister of Aviation and Aerospace Development is expected to reduce airfare prices by decree, because it is unacceptable that a flight from Lagos to Abuja is more expensive than from London Gatwick to Amsterdam Schiphol.

However, for citizens to see these outcomes, government officials must first lay the groundwork through policies, legislation, budgetary allocations, private investment, and political will. Unfortunately, these reforms take time to manifest, but it is easy to observe the puzzles coming together in the Aviation Sector under Festus Keyamo (SAN).

The aviation sector is riddled with challenges. These include high operational costs, inadequate infrastructure, and difficulty in expanding airline fleets. During a recent two-day media chat, Minister Festus Keyamo shed light on several key reforms aimed at addressing these issues, focusing on safety, infrastructure, support for local operators, human capacity development, and revenue generation.

Key Reform
1. Cape Town Convention (CTC) Compliance
A major reform to drive down airfares in the long term is Nigeria’s improved compliance with the Cape Town Convention (CTC). This international treaty makes it easier for airlines to lease and finance aircraft, solving one of Nigeria’s long-standing issues: the difficulty airlines face in expanding their fleets through leasing. In what looks like poetic justice, the treaty needed some of the country’s top legal officials and the President’s appointment of the SAN to the aviation industry which is primarily about law, legalese, treaties, conventions, agreements has paid off. Under Keyamo’s leadership, Nigeria’s CTC compliance score increased from 49% to 70.5%, and thanks to the update of the Irrevocable Deregistration and Export Request Authorization (IDERA) regulations, there’s more upside for the West African giant. This increased compliance restored investor confidence in the sector, reducing the cost of doing business and setting the foundation for more competitive airfares.

2. Passenger Rights and Consumer Protection
The minister also launched a consumer protection portal through the Nigerian Civil Aviation Authority (NCAA). This portal is designed to prioritize and address passenger complaints about delayed flights, baggage issues, and other inconveniences. This reform aims to hold airlines accountable and improve overall passenger experience.

3. Bilateral Agreements and Aviation Diplomacy
Nigeria’s aviation sector has benefited from strengthened bilateral relations. The Minister successfully negotiated and expanded Bilateral Air Service Agreements (BASA) with several countries, allowing Nigerian airlines to access more international routes. Air Peace route to London was well delivered. There is more pressure to secure a slot at London Heathrow to establish reciprocity between the two nations. These agreements foster collaboration with foreign airlines, boosting tourism, trade, and economic growth, while ensuring foreign airlines can also operate in Nigeria under reciprocal terms. The UAE-Nigeria relationship has also been properly managed by the Minister.

4. Positioning Nigeria as an African Aviation and Trade Hub

Festus Keyamo started his tenure by mediating with foreign airlines and IATA over trapped funds. After that chapter closed, he has focused on positioning Nigeria as a key aviation hub in Africa, in competition with established hubs like Ethiopia and South Africa. Through diplomatic efforts with international aviation bodies, the Minister is working to improve infrastructure and safety standards, further enhancing Nigeria’s global aviation standing. There are also talks of a world-class aerotropolis. An ecosystem that focuses on airport’s commercial, logistics, and aeronautical infrastructure at the core. Hotels, restaurants and businesses to make Nigeria on the same level with its peers globally. From a trade perspective, in a conversation with his counterpart in Saudi Arabia, he positioned Nigeria’s seven dedicated cargo airports in a bid to restore the servicing of the cargo operations between Saudi and Nigeria and assured the country of capital repatriation with the new liberalized FX market.

5. Infrastructural Improvements and preparing the groundwork for airport concessionaires
Recognizing the importance of improving airport infrastructure, Keyamo initiated the relocation of foreign airlines from the old terminal at Murtala Muhammed International Airport to the new terminal, which handles 60% of Nigeria’s international traffic. His bold actions have already seen improved service delivery. Additionally, the construction of a second runway at Abuja Airport is a significant step in accommodating growing passenger numbers and improving efficiency. The plan to concession airports aims to further modernize Nigeria’s aviation infrastructure.

6. Cost Reduction Measures
Another reform that has flown under the radar is the minister’s focus on cutting costs in the sector. Early in the administration, Keyamo ordered the relocation of the Federal Airports Authority of Nigeria (FAAN) headquarters from Abuja to Lagos, saving the agency over N500 million in travel expenses. More recently, after an energy audit, it was revealed that the government spends around N1 billion monthly on diesel to power airports in Lagos and Abuja. By transitioning these airports to solar energy, long-term operational costs will be significantly reduced.

7. Safeguarding Nigeria’s interest with the controversial Nigerian Air
One of the key debates in the aviation sector is the future of Nigerian Air. While national carriers have been symbolic in some countries, Keyamo’s approach has been pragmatic. Rather than pushing for a nationalistic airline to solve all the sector’s problems, the focus has shifted to creating an environment where Nigerian airlines can thrive through international treaties and legal frameworks.

There are other efforts by the Minister that would bring yields in the long-term;

8. Security and Regulatory Oversight
Illegal charter operations were previously rampant in Nigeria’s aviation industry, undermining the regulatory framework. Keyamo has taken steps to address this by setting up a task force to eliminate these operations, ensuring a more secure and compliant aviation environment. There is now synergy with the National security adviser in fixing these issues.

● Reducing airlines expenses by supporting the margins offered through aviation fuel by local refineries’.
● Providing support for domestic MRO (Maintenance, Repair and Operations) infrastructure which would reduce airlines overhead expenses.
● Making airports viable through Cargo airports. This would improve trade and revenue generation.
Through these reforms, Festus Keyamo is laying the foundation for long-term improvements in Nigeria’s aviation sector. The groundwork he’s laying—from increased investor confidence to reduced operational costs—could lead to more competitive airfares and a stronger aviation industry.