A rash of BASA, commercial agreements amid airlines’ absence

There has been flurry of activities recently around Bilateral Air Services Agreement (BASA) Nigeria has with many countries. While the Minister of Aviation and Aerospace Development, Festus Keyamo has been very busy inking new deals or reviewing existing ones, the status-quo remains. Where are the airlines from Nigeria to reciprocate these one-sided agreements? Nigerian carriers are secondary operators because there are no airlines to reciprocate these deals.  It is a case of a case of pitting David against Goliath, writes, WOLE SHADARE

 

Strong protection

The Minister of Aviation and Aerospace Development, Mr. Festus Keyamo no doubt means well for Nigerian carriers. The Minister is very strong on the protection of Nigerian carriers and the need to cede market shares to the country’s airlines.

He has not shied away from backing all the country’s carriers especially Air Peace with some people sarcastically naming him ‘Minister of Air Peace’ rather than the portfolio he rightfully occupies.

Most of his pronouncements and actions are centred around ‘national interest’ which he has been applauded for.

  In truth, no Minister in the history of Nigeria has championed the cause of the country’s carriers than Keyamo who is not only unapologetic about it but has taken it a notch higher by threatening to deny some foreign carriers some benefits they enjoy operating to Nigeria if they try to play aero-politics against any Nigerian carrier.

Early signs

The first sign that this Minister won’t tolerate any underhand tactics by anyone quickly manifested few weeks after he assumed office.

He quickly suspended the Nigeria Air deal which controversies were fueled and sponsored heavily by some domestic carriers who felt that the apple was being clandestinely taken away by the determination of the immediate past Minister of Aviation, Senator Hadi Sirika to set up a national airline for the nation.

Next was his displeasure when he was told that many foreign airlines bring their two-way meals from their home countries.

The Minister considered local menu onboard international airlines as a pre-condition for granting them additional flight rights to the country and other benefits they had enjoyed for so long.

He cajoled and applied subtle threat to deny any foreign airline that excludes Nigerian meals outbound Nigeria. The carriers immediately complied; a situation that has made local catering firms smile to the banks.  Keyamo was applauded for that.

Not done with his nationalistic policy, the Minister moved to work on the ‘Fly Nigeria Act’. He emphasised that the Act would create a fair playing ground for Nigerian airlines and curb what he described as a global conspiracy against the growth of the African aviation industry.   

According to Keyamo, the Fly Nigeria Act will mandate that all air transportation funded by the government, including trips by government officials, contractors, grantees, and government properties, be carried out using Nigerian flag carriers.

It remains to be seen how this sails through at the Parliament as the country’s airlines are still reeling under the weight of under-capacity, fragmentation, weakness and poor service.

In the last few months, Keyamo had been very busy with the signing of new Baleral Air Services Agreement (BASA) and reviewing the ones in existence.

The popular of them all is the one between the United Arab Emirates and Nigeria inked a few months ago.

That agreement review seems one-sided and consolidates market shares in the hands of the UAE carriers, especially Emirates which resumed flight services to Nigeria after two years hiatus occasioned by diplomatic spat between Nigeria and UAE.

BASA review

The Nigeria-UAE BASA review which looks more like an ‘Open Skies’ agreement stipulates that, “There shall be no restriction on the capacity and the number of frequencies and type(s) of aircraft to be operated by the designated airlines of both contracting parties in any type of service (passenger, cargo, separately or in combination)”.

This agreement according to experts shows that Nigeria holds the short end of the stick and has firmly put the UAE carriers at an advantage over Nigerian carriers that cannot compete with Emirates not to mention other big carriers like Etihad and others.

Weak to compete

Nigeria has no airline to compete with any notable airline in Africa not to talk of global brands. Aside from Air Peace which sole international destination for now is London Gatwick, no other carrier is interested to ‘waste’ money on routes that do not look profitable for them.

The best the country did with the BASA review with UAE was to ‘force’ interline pact with Air Peace and Emirates which to many stakeholders was a strategic move by the UAE authorities to keep the Nigerian flag carrier out of Dubai, paving the way for Emirates to dominate the Dubai-Lagos route without stiff competition from Nigeria.

While some experts posited that Air Peace is only taking the crumbs from the table, others stated that that was the best Air Peace could get because of the hurdles put on the path of the Nigerian carrier to operate to Dubai or Sharjah.   

New deals

Just last month, Nigeria granted approval to Air Algerie new flight route from Algiers-Abuja-Douala. A statement from the Minister’s office noted that Keyamo warmly welcomed the proposal, expressing his excitement about the route’s potential to enhance regional connectivity and strengthen trade and tourism ties.

Reaffirming his unwavering support, the Minister declared his 100% backing for Air Algérie, assuring the Ambassador of his commitment to a smooth approval process.

Again, just last week, Nigeria and Canada  finalized a Code-sharing agreement under a new BASA, aimed at facilitating air connectivity and passenger convenience between the two countries.

Keyamo stated that he had signed the agreement on behalf of the Federal Republic of Nigeria during a formal signing ceremony in Abuja on Friday.

His Canadian counterpart had previously signed the document in Ottawa earlier in the month and transmitted it through the Canadian High Commissioner to Nigeria, Ambassador Pasquale Salvaggio, who represented Canada at the event.

Where are the airlines from Nigeria?

The question on the lips of many is where are the airlines to service these BASA deals? Currently, no Nigerian carrier operates to Canada or the United States and there is no Canadian airline operating flights to Nigeria. It is not certain yet the purpose the deal intends to achieve.

Perhaps, the two nations may just be preparing the grounds for flight services, possibly from the North American country while local carriers feed the airline with the domestic market.

Skewed deals

The BASA between Nigeria and over 55 nations has been dubbed a case of pitting David against Goliath.

 Nigeria’s revenue drive is being undercut by about N250 billion annually, which it loses to its BASA with foreign nations that have their airlines operate to the country. While Nigeria has already opened up its market with the Fifth Freedom right given to UAE and Algeria at a time the country’s aviation is not on the same pedestal with developed aviation markets further exposes the sector to a huge capital flight. There is not even fifth freedom between the two closest allies in the world. The British government and the American government do not even have the fifth freedom rights.

Put together, all the scheduled airlines in Nigeria do not have up to 50 aircraft in their fleet to operate successfully and profitably on the African continent and even domestically. Their presence pales into insignificance when put them side-by-side Africa’s biggest airlines that have up to 100 airplanes, including some of the latest aircraft such as Dreamliner, B777, A30 and A350.

Even the South Africa Airways (SAA) that has seen its fortune plummet in a couple of years is still regarded as stronger than all Nigerian airlines put together. Kenya Airways, despite a dip in fortune a few years ago and backed by state support has bounced back.

Expert’s view

Former President of Airline Operators of Nigeria (AON), Capt. Noggie Meggison not too long ago said, “This is not the time to play big brother and say come and do five landings at the expense of your local airlines. We have airlines here today coming into our country and doing five landings inter-city hubs; those same airlines do not allow commercial operation in their own countries above 19 passengers. These do not happen in their countries.”

Last line

Analysts say the main denominator in the negotiation of BASAs is reciprocity. In the event that one party cannot reciprocate due to the absence of its own airlines, it collects royalties from its “performing” partner. Due to the absence of a national carrier and local operators to reciprocate the BASA deal, Nigeria has for long been a recipient of royalties.

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