Don’t implement single African sky, operators tell government

Nigerian airlines under the aegis of Airline Operators of Nigeria (AON) have appealed to the Federal Government not to go ahead with the full implementation of the Single African Air Transport Market (SAATM).

They stated that while the idea may be noble on paper, there is a need for government not to lose sight of the facts and the dangers of the direct impact of the decision on the Nigerian economy and Nigeria as a whole and the future of our youths.

 Speasking on behalf of the carriers, President AON, Capt. Noggie Meggison said the carriers are concerned that the timing is not right as there are several unresolved issues and challenges being faced by Nigerian aviation that will ultimately undermine the perceived gains of this Treaty that might be an illusion for our beloved country.

According to Meggison, “Some of the problems for Nigeria to take its position and compete favourably in the open skies process include the following:

He noted that the basic issue of free movement of people and trade is an integral aspect of the declaration that will go a long way to determine the fairness of the SAATM project, stressing that sadly, it is a well-known fact that Nigerians require over 34 visas to travel within Africa alone, stressing that this is an issue that first needs to be addressed. Before opening the skies, open the visas.

 His words, “ It is unclear and constantly changing policies that throw out Nigerian airlines’ feasibility studies into red. Government should come out with a clear policy that will position Nigerian airlines to take full advantage of the open skies.

He stated that the high Bank Interest rates of 28% compared to access to cheap funds provided and guaranteed by the government of most African carriers at a maximum of 2% has kept driving airlines out of operations in the country.

Other issues according to him is Value Added Tax (VAT) which he said most African carriers don’t pay  both in their various countries as well as here in Nigeria, saying this is already a deficit of 5% on a small margin industry from the start for Nigerian Airlines.

His words, “Airlines in Nigeria don’t have access to forex. We only get allocation per percentage of our bids which takes an average of 6 months. Most of the African carriers are subsidized and being funded by their government”.

“Nigerian airlines are at a disadvantage to other African Airlines that are largely government owned and heavily subsidized. For instance, South African Airways got on the average about $350m yearly in the past decade; Kenya Airways got about $600m in 2016, while RwandAir has never published its financial results for over a decade. Yet they will be competing against Nigerian airlines with private finance at 28%”.

Nigerian airlines are subjected to multiple charges, taxes, levies and fees. On the average, we pay about 37 different charges that come under the guise of statutory levies and taxes to sustain a staff strength of about 18,000 staff of the various government agencies compared to most African carriers who pay a fraction in their countries to support a staff strength of less than 500.

 He lamented that countries like Ethiopia that is a strong pusher of the open skies idea makes 45% of its income from Nigeria, yet Ethiopian Airlines has not employed Nigerians as air crew or ground technical staff, which he reiterated drains the country of scarce resources to contribute 32% of Ethiopia’s national GDP at the expense of the Nigerian economy and our ailing youths.

He noted that monies made in Ethiopia can’t be taken out of the country, describing it as a sharp contrast with the case in Nigerian where everyone comes into the country to make free money and move them out of the country effortlessly leading to huge capital flight and putting stress on our foreign exchange reserve.

“It is also noteworthy to state at this juncture that Ethiopia has a Visa on Arrival policy for over 40 countries. But sadly, and with disrespect, Nigeria that contributes immensely to their GDP, is not included among them and South Africa is the only African country included on the list.

“57% of the 54 nations in Africa are yet to sign the open skies deal. Only 23 countries have committed themselves to open skies. The question therefore is why is Nigeria in a hurry to sign the Treaty when we are yet to put our domestic aviation industry in order first and empower our Nigerian carriers to compete effectively?

He stated that AON considers it as unfair and a complete disconnect that Nigerian airlines who are the fulcrum of the implementation of SAATM in the country were not carried along in the decision process leading up to the signing of a Treaty and Firm Commitment to the process which will ultimately affect the future aviation of Nigeria in many years to come and the survival of our airlines.

“Nigeria is simply not ready to handle the level of unfair competition that the full implementation of SAATM will bring upon the country. A full implementation at this time will lead to massive capital flight, huge loss of jobs for our youth and a mortgaging of our beloved children’s future, as well as a further collapse of the already failing Nigerian aviation system.

“So, while we believe open skies is a good idea, we hereby call on the government to have a rethink on the immediate implementation of the open skies and urge them to work with the local technical expertise in the aviation sector by going back to the drawing board and come out with a clear and deliberate policy on how we want to approach, position and take advantage of the open skies to the overall benefit of our beloved country Nigeria”.

Wole Shadare