Imperative of excluding local carriers from evacuation

 

Local airlines are already at the receiving end of COVID-19 pandemic. They have been dealt yet another blow as they miss out in the evacuation of Nigerians abroad amid huge implications. WOLE SHADARE reports

The neglect

The age-long neglect of Nigerian carriers in crucial moment when it comes to making them take part in making money in difficult times came to the fore again recently. Just last week, the action of the Federal Government to engage foreign airlines in the repatriation of stranded Nigerians in the United Kingdom, United States, United Arab Emirates (UAE) was met with outrage from different interest groups comprising Airline Operators of Nigeria (AON), which is the umbrella body for Nigerian airlines; the House of Representatives, Nigerian Association of Chambers of Commerce Industry Mines and Agriculture (NACCIMA) and many aviation experts.

The groups felt this was the best time when airlines and aviation are worst hit occasioned by the outbreak of COVID-19 for government to help secure some businesses for prostrate Nigerian carriers.

Aviation in Nigeria and other climes is worst hit. The Minister of Aviation, Hadi Sirika, at a briefing in Abuja disclosed that the sector had been the worst hit since the COVID-19 crisis.

Losses

According to him, the sector has lost N21 billion approximately so far since the pandemic that necessitated the closure of the airports to international and domestic flights.

He said: “Based on the trend of events prior to COVID-19, the total loss is about N21 billion approximately plus about N3 billion (traditionally). It is divided in this form: N7 billion for aviation (what they lose in a month), N10 billion for airlines, N4 billion for ground handling, catering, etc., and then the taxation is N3 billion.

“Also, since you’re interested in dollars, what we got from the International Airline Transport Association (IATA), they’ve given us economic impact in Africa’s largest aviation markets. They put Nigeria’s lost airline revenue at $994 million and in terms of employment at risk, 125,370. Loss of contribution to the GDP of the country is $885 million.

 

“These are IATA figures. And finally to say that, because it is service-nature, that is a service industry, it’s not like Emeka Majuro’s shop in Aba, which I know he has. If he’s not able to sell his spare parts, they are there. It means it’s only a delayed income so to speak. But because the airline is serviced by income it generates, they have not provided service, they are unable to do so, they have not flown, so have lost it. I cannot regain it. I cannot sell it tomorrow. So, this is the situation of civil aviation. It is really a pathetic one and I can guarantee you that several airlines won’t come out of this unfortunately.”

Right of first refusal

The minister’s clear picture of the losses in aviation is an eye opener to the precarious situation of airlines that are faced with liquidity crisis. Airlines are burning cash fast just as many of them have run out of cash to restart their operations post COVID-19.

Virtually, all the Nigerian carriers have asked workers to go home. Many have openly made it public their decision to cut workforce by over 80 per cent while others have clandestinely asked their workers to stay away because they can’t afford to pay their salaries.

They started by halving salaries by 50 per cent. It  became unsustainable for them because of the prolonged airspace closure which has further drained them.

The precarious situation of domestic airlines many believe should have made Federal Government to give them right of first refusal for the airlift of stranded Nigerians in various parts of the world.

Agreed that the airlines may not have the capacity to bring back all 3, 000 passengers, at least, they should have been ceded some numbers.

Yes, they may not possess wide-body airplanes in their fleet. It is the easiest thing to do now, to lease airplanes from over 30,000 long haul airplanes idling away on tarmacs and many other facilities across the globe.

Air Peace has B777-300 while AZMAN recently acquired a B747-200 aircraft. Air Peace recently assisted Nigeria to bring medical equipment and Chinese doctors from China. The airline was hired by Israeli government to evacuate their nationals from Nigeria in the thick of the pandemic.

Aside that, Air Peace brought itself to the consciousness of Nigerians when, on its own, it took the challenge of rescuing over 400 Nigerians from the jaws of death in South Africa during the Xenophobic attack on Nigerians. That singular effort of the airline was applauded by many well meaning Nigerians.

Airlines’ bungled action

Investigations show that the Federal Government opted for the likes of Emirates, Ethiopian Airlines, British Airways (BA), among others, to save cost compared to the higher bill being demanded by local airlines.

Sources at the Ministry of Aviation confirmed that the earlier decision was to enlist Air Peace and two other airlines in the exercise.

“But what they are asking for is on the high side. The negotiator deemed it unwise to be paying so high to the local carriers for the service the government can almost get for free from foreign airlines that are also our partners.”

“Emirates’ evacuation of 265 Nigerians to Lagos Wednesday was said to be more of the initiative of the United Arab Emirates (UAE) government.

“BA gave similar opportunity as they evacuated Britons from Nigeria at the weekend. So, these are just business decisions to save some costs. It has nothing to do with preference for foreign airlines over locals,” the source said.

There are also indications that the local airlines were not proactive in making international business negotiation while awaiting government to spoon feed them all the time.

The airlines are not united to pursue a common goal. They are divided, ego centric and lack adequate plans to grow the industry to an appreciable level. Post-COVID-19 outbreak will be more challenging that the situation airlines are faced with currently. They need to work in synergy to navigate the tide.

The national carrier question

The question on the lips of many is, could the government have given out the market just like that if it had a national airline? This further tends to look at the place of a national carrier in the development of a country’s aviation industry.

Air Peace, Arik, Medview and others designated on international routes are flag carrier airlines. They are expected to enjoy certain categories of privileges in the absence of government backed airlines.

British Airways  is a national treasure or a national interest but it is not a national airline because the government has no stake in it. The government is not a shareholder. People confuse national airline with flag carriers.

The Federal Government through Sirika had continued to pursue vigorously a private sector driven national airline. The one government wants to set up that is private sector driven cannot be called a national carrier.

However, if the government then provides protection for that airline which is what the UK government has done over the years for British Airways, it technically becomes a national carrier.

Expert’s view

A former Managing Director of Virgin Nigeria, Capt. Dapo Olumide, told Woleshadarenews that the British Government at every point came to the assistance of BA but not same for Virgin Atlantic.

He said: “Both of them are British airlines but Virgin is purely privately owned. BA has in the stock market investors who are from the public institution, the pension fund that they contribute to; therefore, the government feels an obligation to protect jobs.

“But in the case of Nigeria, if they set up a private airline, what will make it a national airline includes several things. One is, if government provides comfort to that airline in a form of guarantees when the airline is paying to buy aircraft. The Federal Government would guarantee incase the private sector defaults, the government will finish the payment which is what other countries do as well.”

He explained that Air France, KLM and virtually all European carriers had interest in their airlines because of massive interests they have in the carriers and as such, provide some sort of incentives, protectionism in a way that that they are going to guarantee aircraft purchases which in effect makes them national airlines.

“Emirates for example is a national airline. Etihad, Qatar, Ethiopian, SAA are national airlines. There is no argument about that. Kenya Airways is partially national airline.  None of the European airline is national airline. Apart from recently due to COVID-19, Alitalia has been taken over by the government,” he added.

Olumide said it would have been easier for the Nigerian government to deploy aircraft to bring back stranded Nigerians if the country had a national carrier.

He said they could never have done it any other way other than using the national airline, adding, “If you have a national airline or an airline that is deemed to be national,  end of story; they will be one to fly your people”.

Last line

Above all, it is not all bad news. Air Peace was contracted to airlift the passengers brought into Lagos by BA to Abuja. This has helped to put a smile on the faces of not only the airline but others who felt aggrieved.

 

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