Minister: Why Nigerian airlines can’t compete with big int’l carriers

  • How aeropolitics, intrigues denied Air Peace Heathrow slot

 

The Minister of Aviation and Aerospace Development, Festus Keyamo has said that Nigerian airline operators are disadvantaged and would find it extremely difficult to compete with their foreign counterparts because lack of access to finance and the high interest rate charged by banks on loans.

The lack of credit facilities for the carriers has made it extremely tough for the airlines to buy aircraft outright or lease rentals.

Keyamo disclosed on Monday in an interview with a television station, stressing that, “The real reasons why we (Nigerian carriers ) cannot compete with international airlines is that we don’t have access to aircraft on the same terms with the big airlines around the world.

“The biggest airlines in the world like Qatar, British Airways, Emirates, KLM and others don’t run their fleet 100 per cent based on the actual purchase of the aircraft. For all the fleet you see, 80% of the fleet across the world is on a leasehold or dry lease. The airlines have access to loans in single digits. Our banks are doing 26% and our banks are not big enough to finance wide-body aircraft.  For you to survive, you must have access to these aircraft.”

The Minister however stated that the government would continue to provide the enabling environment for the carriers to thrive.

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Speaking on the blacklist of Nigeria by aircraft lessors because of default by operators and the difficulty of the aircraft owner retrieving their equipment, Keyamo expressed sadness over the action of the offenders, explaining that the action is in contravention of the Cape Town Convention which Nigeria is a signatory to.

Keyamo disclosed that the Federal government was working with the Aviation Working Group on a practice direction to enable domestic airline operators to dry lease aircraft.

“So, I went around to enquire about what guides aircraft leasing around the world, and I discovered it was the Cape Town Convention, which regulates aircraft leasing across the world. And Nigeria is a signatory to that convention. We have signed and ratified that convention.

“And there is a group responsible for the observance and compliance of that convention. The group is co-chaired by Airbus and Boeing. The group is called the Aviation Working Group, headed by Jeffrey Wool.

“I called all of them and held a meeting to ask why our local operators are not getting these aircraft. According to them, they have blacklisted Nigeria because it didn’t comply with the convention”.

The Aviation Working Group told me that until our laws are amended and our practice directions are amended from granting injunctions on aircraft on dry lease, they will not bring aircraft in dey lease into Nigeria.

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“So, I told them I would do that. I spoke with the Attorney General of the Federation, the Chief Judge of the Federal High Court, the Chief Justice of Nigeria, the president and vice president, who is the head of the Ease of Doing Business; all of them have agreed that it is a critical issue.

“We are in the process of drafting a practice direction to satisfy the Aviation Working Group that once we give a practice direction that says: ‘please, our judges, don’t grant injunctions to detain aircraft that are on dry lease in Nigeria because it gives us a bad image and it is against the Cape Town Convention of the Aviation Working Group’”.

 On the intrigues that made the British authority push Air Peace to London Gatwick Airport rather than Heathrow, Keyamo explained that when he came to the sector, Air Peace was struggling and still struggling and decided to help the carrier.

“When I came, I saw that Air Peace was struggling and had been struggling and I said this is one of our objectives to support private businesses. I called Allen Onyema and he told me all his problems and I said, look, lets start on this. I wrote a very stern letter to the Transport Minister in the UK that under our BASA, we will not allow this to continue. I told him that he is taking 21 slots from Nigeria and we deserve 21 as well. What they gave Air Peace was even below the standard of the BASA we have because BASA does not talk about reciprocity, it also talks about the airport.”

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“We have given you our tier one airport which is MMIA, you should give us Heathrow and we kept going back and forth and they asked him to bring a huge amount before they can allow you to Heathrow. They gave the excuse that they had given Heathrow Airport out to private concessionaires. The British government said they were no longer in control of Heathrow, so, we cannot give you Heathrow.”

“I told Onyema to let us start with Gatwick and they started giving us all kinds of excuses to fly by 3 am. I travelled again to London and put our foot on the ground before we were able to eke out what we had. What we are doing is not for Air Peace but for everybody, local operators.”

Wole Shadare