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It is familiar terrain. It remains to be seen how the domestic carriers survive the onslaught of multiple destinations/designation to foreign airlines and what remains for them with the policy, writes, WOLE SHADARE
“It is a case of step forward and many steps backward. We make gains in one area but fail to consolidate on the gains we have made. We would rather throw away those gains willingly without consideration of how those decisions hurt the system,” an airline operator bitterly lamented when he spoke with Aviation Metric recently.
His lamentation stems from the decision by the Federal Government to grant more destinations to some carriers and by extension more frequencies in a bit to make foreign air travel to be more accessible to the people in the hinterlands.
This action by the government had not been met with excitement by local airline operators and supporters of the carriers who admitted that allowing many of the foreign carriers to operate to more than two destinations n Nigeria amount to depleting the local market and making the aviation business less profitable for entrepreneurs who sank several millions of dollars into the airline business.
Abysmal domestic growth
The Nigerian aviation market is not only small but abysmal and one that the over 200 million population cannot even sustain because of so many factors primarily occasioned by the economic situation which has caused a low propensity to fly by many Nigerians.
It is shocking that the domestic passenger traffic had oscillated between seven and eight million before the outbreak of COVID-19 that led to the closure of borders around the globe in 2020.
To understand the great damage this may have on the domestic airline business, Qatar Airways was reported to have been allowed to Kano and Port Harcourt, doubling its network to Nigeria.
On the other hand, Africa’s biggest airline by size and profit, Ethiopian Airlines is now regarded more as Nigeria’s ‘domestic airline’ because of favour it enjoys from the Nigerian government
Meanwhile, Turkish Airlines will resume Istanbul-Port Harcourt from March 28th. It’ll operate on a triangular basis, routing Istanbul-Port Harcourt-Malabo-Istanbul, three-weekly using B737-900ERs.
Ethiopian on the other hand operates to Lagos, Abuja, Kano, Enugu, and Kaduna, just that there are indications that the airline could expand to other airports in the country, further making domestic airline operations for Nigerian carriers unprofitable.
Starting in less than two months, Qatar Air will route via Abuja, with the Nigerian capital rising to once-daily.
On the other hand, it seems that Lagos’s frequency will be reduced by half as information is sketchy at the time of this repo
This is coming amid criticisms from aviation stakeholders who view the ‘dashing’ of flight rights to foreign carriers on multiple destinations as rather injurious to the domestic aviation market and one that put Nigerian airlines at a great disadvantage.
The idea of allowing foreign carriers to operate many cities in Nigeria and the fifth freedom right, experts said may have killed the desire for a hub in the country.
Despite the outrage trailing multiple destinations for international carriers, it appears to be a cry over spilled milk. It appears to have been regarded as a lost battle.
The battle to cut down multiple destinations for foreign carriers to Nigeria may just end up as rhetoric. It remains to be seen how this can be done as the foreign airlines are daily spreading their wings to many airports across the country.
The announcement in 2020 by the Chairman, House of Representative Committee on Aviation, Nnolim Nnaji, that the National Assembly would begin a review on Bilateral Air Services Agreement (BASA) gladdened the hearts of the country’s airlines.
Ever since he made the announcement, nothing significant had happened on the matter. Rather, they get more destinations with so much ease.
This is however not new because the policy of ‘dashing’ out destinations to these mega airlines which started in the 2000s may have become ‘the normal’ for any airline operating in the country.
Policies of government had over the years stifled the growth of aviation locally. The local carriers have been put in the ring to box with champions or with the giants with their hands tied behind.
Not just even putting them against giants like David against Goliath, they are not afraid to fight with the Goliaths of the industry, but their hands need to be untied to even have a modicum of strength to fight back.
Many bilateral treaties have been entered without carrying the aviation community along. Virgin Atlantic is the only airline operating to only one destination in Nigeria from London. British Airways enjoys frequencies to Nigeria with landings in Lagos and Abuja.
Emirates operates to Lagos and Abuja from Dubai. Emirates was recently given another seven frequencies to Nigeria before the face-off between UAE and Nigeria over the decision of the former to deny Nigeria’s flag carrier, Air Peace slots in Dubai.
The matter had since been resolved between the two nations after UAE agreed to the conditions of Nigeria that allowed Air Peace to operate three times to Dubai.
Air Peace is yet to take advantage of that resolution to begin direct flights to Dubai over reasons that are best known to it while Emirates is not ready yet to resume flight services to Nigeria over COVID-19 related issues.
Lufthansa, KLM, and Air France operate to Port-Harcourt, Lagos, and Abuja as plans have already been concluded to open Kano to willing airlines by way of taking air travel to those living in that area.
While Nigeria is busy opening up its airports to various foreign airlines, their counterparts elsewhere were restricting Nigerian carriers from flying into airports of their choice.
Losing domestic market
The BASA agreements gave many of the foreign airlines multi-designations that enabled them to operate from different airports in the country at the expense of domestic carriers, which lose passengers to them. It is this undue advantage that gave the foreign carriers 90 percent of the Nigerian air traffic market, while Nigerian airlines only have five percent of the market.
The multiple designation policy is heavily skewed against Nigerian operators. They have no participation in all of this. When there are multiple designations in one country, it means they can fly into Abuja, Kano, Abuja, Kaduna, Port-Harcourt, and Enugu. The implication is that they are taking over the domestic market.
It highlights the country’s airlines’ lack of participation because it lacks airlines that can reciprocate that and that automatically become one-sided which brings greater disadvantage to them. The indigenous carriers panic because they are not flying internationally. They are only flying domestically. They have already lost out on the people they carry from Abuja, Kano, Port-Harcourt, Kano, Enugu because the foreign airlines go there to pick them out of the country.
A former Director-General of Nigerian Civil Aviation Authority (NCAA), Dr. Harold Demuren described the multiple designations as ‘good policy, bad economics.’
He urged domestic airlines to cooperate with the airlines so that the situation does not look irredeemable.
His words: “Now, in the whole world, it is about cooperation. How can you compete with Emirates? It is not possible but you can cooperate with them. You need not see them as competitors; you can do a lot of things with them|.
“Are we going to take the routes away from them? I don’t think it will be possible. I think the only place being protected a bit is Port-Harcourt. But don’t forget, Nigeria is Lagos, Abuja, and Port-Harcourt that are the golden triangle. Lagos is gone 100 per cent. What made Lagos a hub is we built a hub but we have not made Lagos a hub yet”.
Aviation security expert, Group Capt. John Ojikutu (retd) said, “To retain and sustain the domestic routes and the markets for the Nigeria private airline commercial operators, there is a very urgent need to review those commercial agreements that have given multiple landings and destinations in this country to foreign airlines”.
Aviation is not a stand-alone in any country. Aviation is a reflection of the policies and the financial health of any country. So, when aviation is taken and the country is not doing well, there is a need to find out if the policies are supporting its growth.Google+