Home » Africa: Foreign Airlines Restrictions: A Molotov Cocktail by Chris Aligbe

Africa: Foreign Airlines Restrictions: A Molotov Cocktail by Chris Aligbe

by Atqnews

In recent years, there have been very strong views and, criticisms by some members of Airline Operators of Nigeria (AON) and indeed, some stakeholders in the Aviation Industry over what they consider “Disfavourable” Bilateral Air Services Agreements (BASA) between Nigeria and some countries.

Their grouse is the Multiple Entry Points granted to foreign airlines which they claim is negatively impacting their operations and profitability.

According to vanguardngr.com, in their view, they are convinced that the solution is in re-negotiating all existing BASAs with a view to the curtailment of some of the rights presently being enjoyed by foreign airlines operating into the country.

In categorical terms, the proponents of this position want foreign airlines to be restricted to only two Airports, most probably, Lagos and Abuja. They posit that this will allow Domestic Airlines the market of distributing the passengers to their various destinations using their flights. This they argue will increase revenue for domestic airlines and help their chances of survival. This is the main focus of this piece.

READ: Africa: Foreign Airlines charge very high Fares because of the lack of Dominant Nigerian Airlines… ET GCEO

To enable clarity and understanding, a brief history of multiple entry points by foreign airlines is necessary. The erstwhile Nigeria National carrier – Nigeria Airways established in 1958 and incorporated into a Company in 1962 was for over 38 years the only Nigeria Airline operating Nigeria BASA with many countries – from US to UK, Italy, Pakistan, Kenya, Gabon, Equatorial Guinea and Cameroun. All these in addition to Senegal, Sierra Leone, Liberia, Ghana, Togo, Saudi Arabia and United Arab Emirates.

Not until the second half of the 1990s did some domestic airlines – ADC and Bellview make forays into the West African Sub-region. Bellview operated to Kenya and made a botched attempt to operate into UK via Amsterdam, using Nigeria Airways rights on the routes. Okada Airlines’ attempt to operate Lagos-London route using Nigeria Airways rights in 1992 failed as the UK authorities raised about six issues that bordered on both safety and non-existence of a clear Agreement between Okada and Nigeria Airways whose route rights it was to operate on.

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Over these periods, all our BASAs rested on Bermuda I of 1946 and Chicago Convention held in the immediate post-WWII in 1944.

The fundamental Principle was Single Designation and clearly stated entry points. In all Nigeria’s BASAs, Nigeria Airways was designated as the Operator. It is this designation and the indicated route that are the origin of GRAND-FATHER RIGHT.

And because none of our airlines today was in existence in those decades, they are not designees in the BASAs. What many of us stakeholders and airline operators do not seem to understand is that there is a difference between Designation in the BASA and Designation on the route, just like the difference between an American Citizen and an American or Nigerian citizen and a Nigerian. The first can be by birth right or conferment while the second is by birthright simpliciter. Conferred citizenship can be revoked while citizenship by birth is irrevocable.

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In the 1980s, airlines like KLM and Air France operated two entry points – Lagos and Kano by KLM and Lagos and Port Harcourt by Air France. These operations were based on Nigeria Airways route rights code-share and strictly under Bermuda I that was highly restrictive.

Again, the pressure for Air France to operate into Port Harcourt came from the State Government and the Oil industry. It is also good to note that Nigeria Airways never operated Abuja-London route or any other route from Abuja and that is why there is no conclusive Grandfather right on Abuja-London route. Unlike Lagos listed in the earliest BASAs, Abuja was not, as it did not exist then.

In those early days of International Operations, in every BASA negotiation, the delegation included Ministry of External Affairs, sometimes at the Ambassadorial level, the Ministry of Aviation and Nigeria Airways as well as the Counterpart airline to be designated by the other country in the BASA document. After the initialling of the BASA, the two designated airlines held meetings to iron out the implementation norms and procedures for operating the BASA. It is during these meetings that frequencies, aircraft type, entry points, capacity, codeshare and royalties are discussed and concluded.

The first quest to depart from Single-designation (Bermuda I) to dual designation (Bermuda II) in Nigeria was in 1998. This was when Richard Branson sought through the then Chief of General Staff under General Abubakar, Rear Admiral Mike Okhai Akhigbe to introduce Virgin Atlantic flights into Nigeria through a code share arrangement with Nigeria Airways. The Proposal was rejected and turned down by the then Minister of Aviation, a Nigeria Airways A310 Captain – Benoni Briggs.

Briggs returned it to the office of the CGS as he considered it repugnant and said “over my dead body”. But the first decade of this Millenium birthed events in the industry that changed the course of history in the airline Subsector. It was the decade that saw Nigeria depart from the restrictive Bermuda I to key in into Bermuda II whose import was liberalisation of Air Services Agreement. The first sign was the signing of Open Skies Agreement with USA.

Second, was the Dual Designation in the UK BASA operations with Nigeria. While Open Skies would allow Nigeria to operate any number of flights by many domestic airlines to any destination without restrictions and vice versa, the dual designation allowed the entrance of a second UK Carrier – Virgin Atlantic into Nigeria. It is necessary to point out that Dual Designation was advised against by IFC that was working on Nigeria Airways Privatisation. Its implementation was one of the four reasons it cited for withdrawing as Transaction Adviser.

The two UK Carriers – BA (British National Flag Carrier) and Virgin Atlantic (British Flag Carrier) sought and got approval to operate 21 weekly frequencies. (BA 14 – 7 each to Lagos and Abuja) and (7 for Virgin). Unfortunately, during this period, Nigeria Airways dwindling fortune had made it to withdraw from both New York and London routes. And it was no longer invited to BASA negotiations. When it was ill-advisedly liquidated in 2003, the Ministry and Presidency took over BASA negotiations.

Thus began the confusion that plagues the industry today. Expectedly, neither the Ministry nor the Presidency had staff exposed to tenets and fundamentals of Commercial Agreements which is the most critical element in BASA operations.

Airline Commercial negotiation is not one of the subject areas of Civil Servants and politicians and therefore they are not expected to have any degree of competence in that area. But for them, BASA negotiation and Commercial Agreements were sweet potatoes – the trips, estacode, peps of Business/First Class free flights and sometimes free hotel accommodation offered by the airlines they were negotiating with were highly attractive, among others.

Over the years, Nigeria Airways was the repository of knowledge and competence in BASA and Commercial Agreements. Outstanding Professionals like Late Fatima Garbati, Tessy Ashiru, Biodun Famodimu who eventually moved to NCAA to handle the schedule and rose to become Director, ATR all stood tall in that Schedule. Also, NCAA began to grow competence in BASA negotiation with the likes of Sosina (former DG of AFCAC and now in ICAO) Alawani (now in ICAO) and the younger generation like Ilitrus Ahmadu now Director Legal Service – NSIB and Ogechi still in NCAA and some other upcoming ones.

As at today, I have my doubt that any of our airlines have staff equipped with competence in BASA negotiations, let alone Commercial Agreements. Arik Air under its bona fide owners, the only private domestic airline that operated into New York and London Heathrow faced the grim reality of nuances, intricacies and aeropoliticsin slots when it wanted to operate Abuja-London Heathrow. What Arik did was to engage Famodimu who then had retired from NCAA and backed him with extensive advocacy.

Even as far back as 2018, only Aero and Skypower Express, both non-international operators attended the ICAO propelled BASA negotiation at Antaliya, Turkey. But I can’t say whether any domestic operator attended the ones held in subsequent years in Mexico, Middle East and Abuja as I did not attend as I did in Turkey. From available information, the Presidency withdrew from BASA negotiation about 2015 few years after the Lufthansa saga of right granted it by the Presidency not to pay royalty on BASA.

BASA negotiations were then taken over by the Ministry of Aviation led by Engr. Hassan Musa. Musa who became a Permanent Secretary in the Ministry has some appreciable knowledge on BASA and Commercial Agreement, having worked with Belview and other airlines in UK but not comparable to the Professionals of Nigeria Airways.

Enough of this background. Now to the request of AON and some Stakeholders that the Government should re-negotiate all BASAs for the primary purpose of restricting foreign airlines to a maximum of two entry points or compelling their host countries to give operating right to them into their airports of choice, the target being London Heathrow.

This request is not only anachronistic but very backward looking as it is, from many dimensions, devoid of any consideration of the wider public interest. It is a highly combustive cocktail of incendiaries put together in the kitchen of primitive egoism to say the least. It is a self-centred demand in all ramifications, some of which are stated below.

  1. Anti-National Policy: In vision 2020, it was agreed that all the six geopolitical zones in the country should have an International Airport. And so, there are Lagos International Airport, Abuja, Kano, Port Harcourt, Enugu and Maiduguri. So, the demand is that apart from Lagos and Abuja, other four international airports should lie waste and allow the facilities to deteriorate. It will be recalled that for over fifteen years, in an unwritten policy, Port Harcourt, Kano and Enugu were left to deteriorate. It took billions of Naira to make them operational again. Enugu gulped about N10billion at least. This was in 2020. Its resuscitation followed tremendous pressure and lobby by Governments, Legislators and Professionals from across South-East on President Buhari with support of Minister Hadi Sirika.
  2. Anti-Economic Development: Airports are huge employment creators that by far outstrip what an airline can create. Again, the economic impact and the trickle-down effect as well as the pull and push factors on businesses that airports account for make more impacts on the communities around the airports and beyond. This is what AON is asking to cut off by their demand.
  3. Anti-Air Travel Passengers: This demand is totally unfriendly to air travel passengers. Passengers from South-South, South-East, North-East and Northwest Zones would now go through pains and incur additional cost to fly to Lagos or Abuja to catch their flights. Also, on return they will face more disruptions on baggage handling, logistics, flight cost to return to base and may even incur hotel cost. The global aviation industry has since gone beyond this stage. Every day, the industry is upping the ante for seamless travel experience. But AON demands differently.
  4. Anti-Constitution: Aviation is now on Concurrent List having just been removed from Exclusive List. So, State Governments have built and are building airports. Airports like Asaba has been granted international status. So, will Lekki and some others like Uyo Airport seek international status. How will the Federal Government preclude international flights in order to satisfy the selfish demand of Lagos and Abuja based Airlines and Stakeholders.

What again the proponents of restriction have not put into consideration is the fact that our expansive country is so under-served by air services to the extent that regional governments like the North East Zone is advanced in its plans to float an airline to connect the cities in the Zone. Also, the new government in Enugu State has muted the idea of floating an airline – may be encouraged by the successes of Ibom Air.

It is noteworthy that Overland Airways pioneered air services to hitherto unserved destinations like Ilorin, Akure and Ibadan in its niche-market strategy and is now breaking out of the niche-cocoon with its new aircraft acquisition. It is equally noteworthy that in an innovative adaptation of the Benard Aliyu ICAO safety policy of “No country left behind”, Air Peace is pushing a policy of “No city left behind” in its operation, more so with its new aircraft acquisitions. Both programmes of Overland and Air Peace are targeted at service expansion. It is therefore incongruous in the face of laudable expansion to be seeking restrictions. Is it a question of “die and let’s live”?.

  1. Negotiate BASA to Restrict: The Foreign Dimension: The grouse of proponents of this view; some AON members and stakeholders, is that the present multiple entry points granted to foreign airlines should be dispensed with and replaced with not more than two entry points – Lagos and Abuja. For them, this is why BASAs should be RENEGOTIATED. For clarity, the appropriate word is REVIEW not RENEGOTIATION as BASAs are not renegotiated. Experience abounds globally since Bermuda I and II and post-World War II as can be found in various review meetings between the United States and United Kingdom as well as the US and countries of Asia. The histories are as interesting and educative as they are enlightening.

As I earlier pointed out, Restrictions in the aviation sector and even in Trade are no longer just anachronistic but also anathemas and backward-focused. It is evidence of under-development and unambiguous manifestation of inability to respond to, and manage change. The demand for Restriction which is a form of protectionism is a pointer to an unwillingness or fear to grow/compete and early clear indication of infantilism. As if to buttress this, the CBN just removed the restrictions on 43 trade items placed by the immediate past Government.

But let us look at the Foreign Airlines operating into Nigeria that are most probably the target of restriction proponents. The quest cannot and will not apply to US Carriers because our Air Services Agreement is “Open Skies”. This means that up to five, six Nigerian Airlines can fly to any destination in the US for any number of frequencies. Ditto US Carriers. It is now almost twenty-three years since we entered into the Open Skies Agreement with the US, apart from feeble effort of Nigeria Airways in its dying days and the effort of Arik before its take-over by the “Mortician” AMCON, no other domestic airline has ventured. This is despite the fact that about two of our Domestic airlines have been designated on the route. Next, let us look at the Nigeria-UK BASA.

This oldest BASA is operated by two British Carriers – one the British National Flag Carrier – British Airways (BA), the other a British Flag Carrier, Richard Branson’s Virgin Atlantic (VK). Both of them combinedly operate twenty-one (21) weekly frequencies – BA fourteen (7 to Lagos and 7 to Abuja) and VK (7 to Lago).

The Nigeria-UK BASA have been the most reviewed. Records show more than five reviews. In one of the major reviews that allowed Dual Designation and BA operations into Abuja, it was agreed that Nigeria can designate more than two airlines to operate its own twenty-one (21) frequencies. At a point in time, Virgin Nigeria, Arik and Medview operated the route and fizzled out.

As at today, no Domestic airline is operating, even when two or three had been designated on the route. Fortunately, two of our Domestic Airlines – Air Peace and Omni Blue with the intervention of the Director-General, Civil Aviation Authority (CAA), Capt. Musa Nuhu, have been granted Third Country Operator (TCO) Permit to operate into London. And I am aware that the quest and insistence that it is Heathrow Airport or nothing is the cause of delay for Air Peace to commence. But our airlines so designated can operate into Gatwick, Stansted, London City Airports, all in London and to Manchester or Birmingham as they choose. So, what is the object of demand for Renegotiation? Heathrow Slots?

Slots are not BASA issue but Commercial issue. What is happening today in Europe is Airport Congestion and the fact that many of the older airlines that made congested airports, their Hubs by that virtue acquired all the strategic slots and now sell them at premium prices.

For example, BA in addition to its own Grandfather rights and Hub slots in Terminal 5, acquired all BMI (British Midland) slots in addition to Iberia’s in which it has deep investment under IAG (International Airline Group). All these happened when the Airport was commercialised. Today, it is cheaper to operate into Gatwick, Manchester, Stansted, London City and Birmingham Airports than Heathrow.

Our airlines designated on the UK route will soon find out how “Killing” the cost is. Enough of UK issue. Will the quest for BASA review be focused on Turkish Airline, Air France, Lufthansa, KLM. I don’t think so. This is because our airlines are not bent on those destinations even when Turkey offers attractive destinations and traffic.

In the Middle East, Qatar, Emirates and Etihad come up for mention but will soon be joined by Flynas and by 2024, Riyad Air. There are no congestions in the relevant airports in those countries. The only issue is entry points which can be sorted out easily by the CAA as all the airports are Government-owned.

Now, turning to Africa, the grouse here for proponents of restriction and BASA renegotiation is on Ethiopian Airline, the African Colossus that dwarfs most African Airlines including our Domestic Airlines. Again, this quest is a lost case ab initio. SAATM (African Open Skies) has knocked out BASA. Yes, sooner than later. ET can fly into more destinations in Nigeria based on 5th – 7th freedoms not on 8th and 9th which is cabotage.

In the same vein, our Nigerian Flag Carriers can fly into Arusha, Dar -es-Salaam, Zanzibar and Dodoma, all in Tanzania or into Cape Town, Johannesburg, Durban all in South Africa as well as Cairo, Alexandra, Sham-el-sheik and Hurgada in Egypt. This is the focal point of SAATM and AfCFTA to unify Africa as a common market and entity by 2050. So, why antagonize Ethiopian Airline one may ask? BASA is gone in Africa just like fuel subsidy is gone in Nigeria to borrow from our President Tinubu.

Proponents of Restriction and Protectionism should have a second thought and focus on dominating Africa. Yes, they can, with the new modern generation aircraft acquisition – Air Peace, United, Overland, Green Africa and Ibom Air can spread their wings over Africa and help realise Africa’s dream of one Continent by 2050 envisioned by African Continental Free Trade Area. Yes, they can, that is if and only if…
In the event of any review, foreign airlines will ask for more frequencies and destinations and in spirit of reciprocity will grant Nigeria Airlines same rights.

They will easily do this because as George Orwell said in his Classic “Nineteen Eighty-Four”,”The Proles (Proletariat) can be granted intellectual freedom because they have no intellect”. In paraphrase, Nigerian Airlines can be granted hundreds of frequencies and multiple destinations because they have no capacity. This is an undeniable fact no matter how much our airlines engage in argumentum adhominem against those who hold on to this fact.

The US Open Skies with Nigeria offers unlimited frequencies and destinations to Nigerian Carriers since the year 2000; 23 years ago, and so far,no Nigerian Carrier is operating to US. Ditto UK offers 21 frequencies and Dubai seven. Apart from Dubai where, before the Visa ban, our biggest Carrier – Air Peace was operating three, all others remain fallow due non-existence of capacity.

As I said earlier, the present great acquisitions of Regional Aircraft by our domestic airlines show they are poised for SAATM. That is where their strength is and should be focussed to build operational capacities and competences that will make them attractive for code-share and alliances and partnership. They should note the axiom that “if one does not understand and accept one’s weaknesses, he will never maximise his strength”. Meanwhile, let us refrain from pushing the Minister into a minefield of highly combustive Molotov cocktail of incendiaries.

In my next peace, I will take a deep look into AON Presentation to Honourable Minister of Aviation and Aerospace Development, Mr. Festus Keyamo. So long and till then.

SOURCE: vanguardngr.com

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