Why Nigeria recorded over 160 airline collapses since deregulation- Minister

..Says carriers hampered by infrastructure challenges

The Minister of Aviation and Aerospace Development, Festus Keyamo, said the deregulation of the airline industry in the mid-1980s and early 1990s led to many people entering the industry without much experience.
The opening of the floodgates, he said, also saw to the collapse of so many early carriers, adding that the failure of airline owners during that period, which led to high airline mortality, forced many Nigerian carriers to learn from such experiences.

The Minister who spoke yesterday, celebrating the 100th anniversary of aviation in Nigeria, with the theme, “A century of Progress And Excellence”, held in Abuja, disclosed that as a government, “We are determined to dig deep, to find the right policy to ensure that we stem the airline mortality rate that we have in the industry.”

“At the time they deregulated the airline business, people came into the industry inexperienced. Sometimes you think that having money to buy three aircraft is enough. The money you use to run an airline is more than the money you use to acquire aeroplanes”, he stated.

The deregulation of the airline business in Nigeria, which began in earnest around the mid-1980s and early 1990s, and gained significant momentum in the 2000s after the liquidation of the national carrier, Nigeria Airways, was a pivotal policy shift aimed at liberalising the air transport market.

Reports indicate that between 100 and 160 airlines have gone defunct since the sector was liberalised in the late 1980s, despite the country having one of Africa’s largest populations and significant demand for air travel.

The causes are complex, involving a challenging economic climate, structural issues, and internal corporate governance failures.

Keyamo noted that for the country’s airlines to thrive, there was an urgent need to fix airport and other infrastructural challenges, describing the lack of infrastructure as the “Big elephant in the room”.

The Minister says the lack of adequate airport and air navigation infrastructure is the primary inhibitor preventing Nigeria from developing a functional and competitive airline hub system (like those in Dubai, Addis Ababa, or Johannesburg) despite its strategic geographic location.

He said, “We need to convert our major gateways to a proper force where you can fly in, go through a process of processing without entering the country, and you board again and fly out. We have airlines with the capacity; they are already doing international routes”.

“We need, first of all, infrastructure to assist our airlines because they also need the hubs. Without the infrastructure, they cannot grow. The second one is to ensure that we empower airlines to have access to credit, finance, and leasing aircraft. These are the two significant problems.

“The problem is not the traffic. We have the traffic. The problem is not with the population’s ability to travel; the problem is traffic. We have the travelling population. The problem is not Nigeria’s location. Nigeria is at the centre, equidistant from almost every part of the world. Maybe we lost our way in the past, but we are focused now.”

Wole Shadare