Foreign carriers’ dominance on Nigerian routes encourages capital flight. About $5.6 billion is said to be remitted abroad yearly by 30 foreign carriers from ticket sales orchestrated by multiple entry points policy; under-utilisation of multilateral, commercial and bilateral air services agreements by designated local carriers. To reverse the trend, some indigenous carriers are riding on government’s policy of ” air treaty reciprocity” to commence flight operations in select routes among the over 90 nations Nigeria signed Bilateral Air Services Agreement (BASA) with, KELVIN OSA- OKUNBOR reports.
Nigeria is not tapping enough from the expected benefits of the over 90 Bilateral Air Services Agreement (BASA) it signed with many countries across the globe.
Owing to many factors, not limited to multiple entry points policy for over 30 foreign carriers operating flights into Nigeria and the sloppy operational performance of some indigenous carriers, the economy is losing billions of naira accruing from ticket sales to the benefiting carriers.
Besides, the multiple entry points policy, which has received flaks from experts, airline operators and other watchers of the aviation sector, the question of failure by designated indigenous carriers to utilise their flight slots in the countries granted them remains a topic of huge debate.
According to data from the Nigerian Civil Aviation Authority (NCAA) and the umbrella body of indigenous carriers – Airline Operators of Nigeria (AON), capital flights in 2017 from ticket sales stood at over $1.4 billion.
Investigations reveal that foreign carriers operating into Nigeria sold tickets worth over $1.8 billion from January to December 2018.
The amount indicated that there was an increase in sales in the second half of 2018. This was buoyed by passenger surge during the yuletide, as the foreign airlines sold tickets worth $800 million in the first half of the year, against $900 million they earned in the second half.
The figures for 2017 and 2018 showed that in the last two years, the foreign airlines earned $3.1 billion from ticket sales in Nigeria, excluding revenue earned from cargo.
Nigerian routes, according to experts, have become a harvest ground for foreign carriers, which have over 90 per cent dominance on the market.
These carriers, namely: British Airways, Virgin Atlantic Airways, Air France, Lufthansa, Royal Air Maroc, Turkish Airlines, Emirates Airlines, Etihad Airways, Qatar Airways, Delta Airlines, South African Airways, Kenya Airways, Ethiopian Airlines, Egypt Air, Cameroon Airlines, KLM Airlines, Middle East Air, Sunday Airways , Asky Airlines, African World Airlines and Rwand Air continue to pillage the market on account of inability by indigenous carriers to exercise operational rights on their designated routes for sundry reasons.
Part of the reasons, experts said, included lack of reciprocity on some of the routes as well as multiple entry points policy enjoyed by some foreign carriers.
Among the over 30 foreign carriers that fly into Nigeria British Airways,Virgin Atlantic Airways, Lufthansa German Airlines, Air France / KLM; Emirates Airlines, Qatar Airways; Etihad Airways, Turkish Airlines, Ethiopian Airlines, Egypt Air, South African Airways, Rwand Air and Kenya Airways enjoy multiple entry points.
Piqued by the development, industry groups and the National Assembly Committees on aviation have called on the Federal Government to review the obnoxious policy, such that designated indigenous carriers could actualise their operations rights on such routes.
Experts said Nigerian carriers could alter the equation if they actualise the bilateral rights they have secured to operate intercontinental routes on which they have been designated.
Some Nigerian carriers designated by the government in some international routes include Arik Air, Medview Airlines, Aero Contractors, DANA Air, Air Peace and Overland Airways.
While Arik Air operated the Lagos-London, New York, Johannesburg, Dubai and other intercontinental routes, before it suspended such operations, it provided stiff competition and travel options for many Nigerian passengers.
Besides Arik Air, Medview Airlines, which was designated on Lagos-London, Dubai, Johannesburg routes, also deepened competition on intercontinental routes offering cheaper fares and direct flights for Nigerian passengers.
Overland Airways, on its part, which was designated on some intercontinental routes continues to play in the West African coast.
Air Peace, which was designated on the Lagos-London, Freetown, Dakar, Sharjah/Dubai, Guangzhou, Houston, Tel Aviz, Mumbai , Johannesburg and other routes is changing the travel narrative on routes hitherto dominated by foreign carriers.
Two years ago, when it flagged off regional operations in the West Africa, the indigenous carrier has not only spiked competition on the routes, it has triggered lower fares on the routes.
Buoyed by the agitation in the National Assembly and other industry group’s push, Air Peace last year flagged off its first intercontinental operations on the Lagos/Sharjah/Dubai routes.
Deploying one of its wide body Boeing 777-500 aircraft, the indigenous carriers has altered the narrative on the route hitherto dominated by the Gulf Carriers-Emirates, Etihad and Qatar Airways spiking intense competition that has occasioned travel options and lower fares on the routes.
As the airline consolidated its operations on the Middle East strategic routes, it continues to grapple with stiff resistance by United Arab Emirates authorities, as part strategy of protectionism for its carriers.
Confirming the experience of the operations, Air Peace, its Chairman, Mr Akllen Onyema, said : “We have started our international operations into Sharjah and United Arab Emirates and we are not just doing Lagos-Sharjah alone, we are also doing every destination in Nigeria to Sharjah and Dubai.
“Apart from Sharjah, you know the Federal Government has given us six destinations – Mumbai, Guangzhou, China, Atlanta, Houston (US), Heathrow (London) and Johannesburg (South Africa and the latest Tel Aviv in Israel.
‘’And we are looking forward to discussing with Air India their national carrier, which has a better spread to spread for us within India. And their government also is urging us to partner Air India. In the near future and after we have succeeded in these first three international destinations, we would look at flying to Guangzhou.
“We planned to do international routes. When we started this airline we outlined our growth pattern and we have religiously followed it.
“Let me make this clear, Air Peace will never be able to combat international aero politics without the support of the government. We can only combat it if our government supports us
President, National Association of Nigeria Travel Agencies (NANTA), Mr. Bernard Bankole, said the government’s encouragement to more indigenous carriers to actualise their bilateral services agreements would assist to check capital flight repatriated out of the country.
Besides, Bankole said such operations will promote trade, commerce and tourism for businesses in such countries by providing direct flight by Nigerian carriers.
He said more Nigerian carriers flying into regional and intercontinental routes will not only facilitate easy travel but eliminate the hassles associated with intra – African connections.
Also, Zenith Travels Limited Executive Director, Mr. Olu Ohunayo said the government must tinker with its BASA to create opportunities for airlines to compete with their foreign counterparts by introducing Fly Nigeria Act, which would make it compulsory for foreign airlines to partner indigenous carriers and share revenue from ticket sales.
According to him, Fly Nigeria Act would make it compulsory for anyone travelling on government expenses to patronise Nigerian airlines or their partners.
Ohunayo said by so doing, the local airlines benefit from revenues earned on ticket sales by international carriers.
He said the government could also back indigenous carriers and support them to operate international destinations by playing the inevitable aero politics on their behalf.
One of the measures, experts said, the government could exploit to balance the lopsidedness in its agreements is designation of strong flag carriers to reciprocate flights operations on routes flown by foreign carriers.
Also, President Aviation Roundtable Safety Initiative, Dr Gbenga Olowo, said the government’s encouragement to indigenous carriers to escalate the implementation of their bilateral air services agreements, will benefit Nigeria’s economic growth by reducing capital flight and put local carriers in a position to have increasing market share in the profitable air transport market.
According to Olowo, participation of more Nigerian carriers on the intercontinental scene will not only correct the negative balance of trade, but also address the issue of reciprocity in Nigeria’s air treaties with many countries.
Citing the recent foray of Air Peace into the Middle East, one of its intercontinental routes, Olowo urged government to get involved in the international aero – politics of protecting its carriers against hostilities by foreign governments.
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Olowo said : “ADC tried London and failed; Bellview tried India, Amsterdam, London, Dubai and failed; Medview went to Dubai and failed and now Air Peace is making another good effort to break into these lucrative routes.
“So, if our government is serious, especially the aviation ministry and the economic regulations department of the NCAA, they should agree with the protection Air Peace is asking for, which is very simple.”
According to him, what Air Peace is asking for is the elimination of unfair competition that affected its predecessors on the international routes.
Olowo said for instance, Etihad and Emirates Airlines had multiple frequencies into Abuja and Lagos, stressing that in order to balance the scale, Air Peace should be granted same rights into the United Arab Emirates.
He said: “They are doing seven flights and our economic regulators have to reduce it to three so that the market will be free for competition.
“Otherwise, those doing seven can drop tariff and will knock off their competitor from Nigeria. So, if you want to help your own, you have to make the reciprocity even.”
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