The multiple entry points granted foreign carriers by government is generating ripples in the sector. If unchecked, the ‘unbridled invasion policy may sound the death knell of struggling indigenous carriers. According to experts, a review of the policy will save local carriers, curb capital flight and address lopsidedness in Nigeria’s bilateral air services agreement, KELVIN OSA OKUNBOR reports.
A coalition to stop the Federal Government from granting multiple entry points to foreign airlines is gathering momentum.
The coalition, comprising industry groups, experts, members of the National Assembly, airlines’ association and other stakeholders, is clamouring for a review of the policy given the perceived lopsidedness in bilateral air services agreement (BASA) among Nigeria and over 80 countries.
The lopsided air treaties, according to the group, include Multiple Entry Points Policy granted foreign carriers; Dual Designation Agreement and Open Skies Agreement.
Multiple entry by foreign carriers into the country, experts argue, is not only depriviang indigenous carriers potential passengers traffic on such routes, but denying them opportunities to sign interline deals to distribute such passengers.
Nigeria is the only country in Africa that grants foreign carriers unfettered access into its domestic market.
Despite its supposed market potential, Nigeria yearly loses over $5.6 billion to remittances by foreign carriers on sale of tickets by over 30 airlines that operate in her airspace.
Experts say such humongous sum could be retained locally if the government puts in place protectionist policies for her carriers; as is the case in other countries.
One of the measures, experts say the government can exploit to balance the lopsidedness in its agreements is designation of strong flag carriers to reciprocate flights operations on routes flown by foreign carriers.
Continuous implementation of these agreements, experts say, will undermine the growth of the domestic transport market.
Of 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, RwandAir and Kenya Airways enjoy multiple entry points into Nigeria.
Speaking in a recent interview, Nigerian Civil Aviation Authority (NCAA) Director-General Captain Muktar Usman said the government was doing its best to empower domestic carriers to reciprocate the bilateral air pacts it signed with many countries, but there was need for the indigenous carriers to demonstrate capability on the routes.
He said yearly, Nigeria loses over $5.6 billion which is for 50 per cent of the over $10 billion taken way from Africa annually by foreign airlines.
Usman said Nigerian carriers have not been able to meet the needs of the market. He said: ”We have lost a lot and we have been losing a lot by not taking advantage of those bilateral air service agreements because we do not have strong, viable carriers that will be able to effectively compete with foreign airlines.”
Some Nigerian carriers designated by government in some international routes including Arik Air; Medview Airlines; AeroContractors; DANA Air; Air Peace, Overland Airways do not enjoy multiple entry privileges in the countries that are approved to fly into.
In an interview, Chairman of Airline Operators of Nigeria (AON) Captain Nogie Meggison urged the government to reconsider granting approval for multiple entry points to foreign carriers, saying the arrangement is killing indigenous airlines.
Industry critic and Chief Executive Officer, Centurion Securities, Group Captain John Ojikutu (rtd), says granting multiple entry with an increase of frequencies around the country to foreign airlines, gives the carriers an edge over domestic carriers traffic wise.
Ojikutu, however, canvassed a strategy that would benefit the domestic airlines if government can implement it.
According to him, government instead of granting multiple designation should limit the routes to just two per airline with one in the North and another in the South but not Lagos and Abuja as the airline should pick either or.
He said: ”Ethiopian Airline now operates 23 weekly flights to four Nigerian viable airports, British airlines operate 21 weekly flights to two Nigerian airports and the Middle East airlines of Emirates, Qatar and Turkish Airline operate over 30 flights weekly to three destinations, where is the domestic market for our airlines if the foreign airlines are given multiple designation within our country?”
He went on :” Why can’t government increase the frequencies to whatever but limit each airline to a maximum of two routes; one in the North and one in the South? But no airline should be allowed to fly both Lagos and Abuja, it has to be either one or the other.”
Senate intervention
The Senate last week advocated the protection of Nigerian airlines from what they described as unfair competition from their foreign counterparts.
It resolved to invite the indigenous airline operators to explain to the Senate the challenges they are facing in the aviation industry as well as summon the Permanent Secretary of the Ministry of Transport, the Director-General of Nigerian Civil Aviation Authority (NCAA) and Managing Director of FAAN to explain why foreign airlines are allowed to fly multiple routes within Nigeria to mop up passengers; a practice not allowed in other countries.
Ifeanyi Uba, who brought the motion to the Senate, decried that foreign airlines are now designated to multiple routes within Nigeria, noting that this development threatens the survival of local airlines.
He said: ”For example, Ethiopia Airlines operates in five cities namely; Enugu, Kano, Kaduna, Abuja, and Lagos; Turkish Airlines operates in four cities: Abuja, Kano, Lagos, and Port Harcourt and Emirates Airlines operates two frequencies daily into Lagos and one to Abuja.”
He noted that besides multiple designations, foreign airlines are now being encouraged to do multiple frequencies into the country and within the country, a practice which he said is not allowed in other countries.
“For instance, Turkish Airlines has just started Istanbul to Abuja, Abuja to Port Harcourt, Port Harcourt to Abuja, then Abuja to Istanbul. Lufthansa and Air France are also doing same, thereby running indigenous airlines out of business.
“Concerned that while Emirates has two frequencies into Lagos and one to Abuja, it has announced plans to introduce a third flight in and out of Lagos to start very soon, making it three flights daily to Lagos.”
Reactions
A group of aviation professionals, the Aviation Round Table (ART), has praised the move by the Senate to protect Nigerian airlines from unfair competition in relation to their foreign counterparts.
Its President, Gbenga Olowo, said the move, albeit belated, was a welcome development.
Olowo said the ART had always advocated the protection of Nigerian carriers by the Federal Government and its agencies and would continue to do so until it gets the desired results.
He said: “The Senate will have to revert a lot of the recklessness that have taken place in our Bilateral Air Services Agreements (BASAs).
“We, in ART, have continuously said that what we are doing to our domestic airlines is prodigal.
“Nigeria has been doing a lot of regulations on safety and has been getting pass marks, but in the area of economic regulations, we have been very reckless.
“Economic regulations, as far as BASA is concerned, is coming up with policies that will first of all protect your own airlines and local businesses.”
Olowo said, unfortunately, the opposite was what was in place in Nigeria, compelling the country’s airlines to be suffering lack of reciprocity and negative balance of trade.
He noted that Nigerian carrier, Air Peace, which asked for government protection following its recent flight operations to Sharjah-Dubai, was justified to seek for assistance due to the hostilities meted to Nigerian carriers by foreign governments.
“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,” Olowo said.
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: “Right now, they are doing seven, 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.”
Olowo advised the Senate to make the hearing public and also extend invitation to the ART and other aviation professionals in order to achieve its purpose.
