For all their investments, hardwork and courage to fly the Nigerian flag on international routes, local airlines will continue to face a grim future overseas without a proper buffer at home. WOLE OYEBADE writes.
Yamoussoukro Decision by 44 African Union (AU) member States to open up the sky for free movements, this year marks 20th anniversary, but without much success to celebrate.Yes, air travel on the continent is fairly easier now than it was at the turn of the century. Today, most Africans hardly need to round-trip through Europe or Asia to visit friends and family in neighbouring African country. Those nightmarish journeys of two to four days are now possible in two or three hours by direct flights.
But the trouble is that the sky is still largely shut to fair competition and mutual trust, and the new Single African Air Transport Market (SAATM) initiative raised as much concerns. The AU, still in its pursuit of Yamoussoukro objectives, last year launched SAATM otherwise called open market treaty. A total of 23 out of the 55 AU member countries signed the treaty.
Nigeria’s decision to join the 23 was immediately carpeted by the airlines operators back home, describing it as an inane giveaway of the local market to countries that are protectionist. They have a point.
Big brother Nigeria
There is apparently very little the African airlines can do without the Nigerian market. With about 200 million population, according to the United Nations’ recent demographic report, an airport in almost all 36 states, and just six hour flight to any part of the world, Nigeria surely has the potential market all airlines desire.
And that perhaps explains the business sense in opening up the sky. Currently, foreign airlines have about 80 per cent share of the Nigerian market, flying multiple destinations in the country.
The Bilateral Air Service Agreement (BASA) provides for reciprocity by the number of flights and destinations. Nigeria, with the second largest market in Africa after South Africa, has at least 90 of BASA pacts with less than 20 serviced in return by the local carriers.
Not for want of trying to reciprocate though. For instance, one of the flag carriers, Med-View Airlines Plc, until March last year operated the Lagos-London and Lagos-Dubai routes amid multiple operational hurdles and alleged stiff resistance from the other end. With the European Union banning its aircraft from operating in the region, and subsequent aircraft lessor’s default, both routes were suspended till date. Med-View was the only surviving airlines after the exit of Arik Air from London, New York and Johannesburg routes in 2017.
No entry for Nigerian airlines
In fact, the new wave of aeropolitics in bilateral air travel pacts was blamed for the woes of Nigerian airlines on the international front. The subtle politics of market protectionism and discrimination cuts across Europe and even African countries, staking the odds against Nigerian flag carriers, who are now frustrated out of the international routes.
Chief Executive Officer (CEO) of Med-View, Muneer Bankole, said the routes were indeed tough and the foreigners would stop at nothing to resist attempts at competition. Chairman and CEO of Air Peace, Allen Onyema, expressed similar sentiments, saying aeropolitics, that is “politics as conditioned by considerations of air power or its dominance” is the bane of the Nigerian carriers, and indeed worse among African countries despite the union’s platitude on open market and unrestricted movement.
Onyema, who operates the leading local carrier, said Nigerian flag carriers had wrongly been “demonised” as lacking requisite capacity to compete, “forgetting the effects of resistance and bad politicking coming for the African neighbours”.He said while Air Peace, for instance, has six international destination slots and 17 regional, but there must be approval to venture, which had been very difficult.
He gave examples. “Asky Airlines is doing four frequencies to Lagos daily. But their home country, Togo, said they would not allow us in because their government is protecting Asky. It took them a year to reply us. Later, they apologised when I threatened to go to court to stop their airlines from coming to Nigeria.
“Cote d’Ivoire gave us permission to fly into their country but not even an airport office was given yet they slammed us with $10,000 (N3.6 million) charges. But how many passengers did we have on that plane? Are they (Air Cote D’Ivoire) paying $10,000 in Nigeria? Why is it that when we complained, we haven’t received any help?
“Air Peace has lost over a billion in just six months of flying the West Coast. When they presented this to me I almost cried. What we make are all spent on their charges. These airlines we are supposed to be competing with are receiving support from their governments; some of them are not even paying taxes. Air Peace, from day one, has been paying tax and charges. The truth is that those countries don’t want you to come and compete with their own airline, whether private airline or whatever.” ”
You cannot be wrong supporting your own
The operators, contrary to blames that they are weak and too small to compete, said until the Federal Government rises up to demand fair play across the board and in support of local operators, the foreign carriers would continue to dominate Nigerian market to the detriment of both local industry and the economy at large.
Onyema said the indigenous airlines need the backing of the government in terms of slot negotiation, charges harmonisation and other strategies often deployed to frustrate Nigerian carriers abroad.He said the government must rally behind the flag carriers to do Nigeria proud.
“There are ways of doing that. It could be by government to government negotiations. By and large, we need that intervention. Then, of course, the charges. If we go to other countries and they hammer us with some unreasonable charges, let government draw their attention. If they refuse, you multiply the charges on their airlines by two. That way, you will force them to comply.
“Again, why should an airline fly multiple destinations into Nigeria? Ethiopian Airlines flies into five destinations daily when you cannot even fly into any of their airports. Why not restrict them to just two, while our local airlines cover the other routes? That is not within the control of the airlines but of the government,” Onyema said.
Chairman of the Airlines Operators of Nigeria (AON), Capt. Nogie Meggison, added that the gross imbalance and insincerity of many African countries explained why his members were against both SAATM and African Continental Free Trade Agreement (AfCFTA) initiatives.
Meggison commended the initiatives as laudable ideas and could be considered as a step in the right direction, but the concern is about the several unresolved issues faced on daily basis by Nigerian airlines. “These border on unfriendly policies, high interest rates, levies, Value Added Tax (VAT), multiple taxation, charges and fees, and a hostile operating environment, all of which puts Nigerian local businesses at a disadvantage compared to other African States that are largely government owned and heavily subsidised.
“For instance, foreign airlines are exempted from VAT both in Nigeria and in their home countries. But Nigerian airlines still have to pay VAT.
Yet, Nigerian airlines which are 100 per cent privately funded are expected to compete with other government-owned airlines across Africa in a single air transport market. You never can be wrong supporting your own but many of our people are yet to see the sense in that,” Meggison said.
The Aviation Safety Round-table Initiative (ASRTI), a think-tank group of the aviation industry, recently raised concern about the act of negotiating BASA agreements without input and consideration of the local carriers, contrary to regulatory provisions.
The 2006 Civil Aviation Act makes it clear that there should be adequate consultations with the airlines before introduction of any decision that is likely to have an impact on their operations and overhead costs.
Secretary General of the Aviation Round Table (ART), Group Captain John Ojikutu (rtd), said the gross imbalance skewed in favour of foreign airlines continues to rub off on the economy and growth of local airlines.
Ojikutu said: “How can our airlines develop capacity when any foreign airline can fly to all four or five of our international airports? How can our airlines develop capacity when the exclusive market on our domestic and regional routes is left open to foreign airlines? Which law allows only Saudi airlines to airlift nationals of other countries for Hajj?
“Would British allow Arik or Med-View to fly to Gatwick and Heathrow the way the British Airways flies to Lagos and Abuja? Or would the U.S. allow Nigerian airlines to have multiple destinations the way Delta Air flies to Abuja and Lagos,” he said.
Notwithstanding the fact that the complainants are private businesses, they operate in the economy where the government has the responsibility of creating enabling environment for businesses to thrive. And until the government fulfills this obligation, to create a buffer in the air travel sector, it has no moral grounds to blame the local airlines for dropping off the international skies.
By Wole Oyebade