Unbridled Multiple Designations Amid Discordant Tunes

The effect of multiple designations is almost discordant, but also riveting in the face of at-risk domestic airlines, writes WOLE SHADARE

Sustainable aviation industry

An active and sustainable local aviation industry has strategic importance that goes beyond mere commercial and business objectives. It is a matter of national interest and security.

So far, the administering of Nigeria’s Bilateral Air Service Agreement (BASA) has been a matter of serious concern considering it is supposedly based on the principle of “reciprocity” and fair exchange for mutual benefit. It has neither been fair nor particularly beneficial to the generality of Nigerians, according to stakeholders.

 

The Ministry of Aviation, for over three decades, has consistently failed to understand the wider implication of the action. Wider stakeholder engagement and consultation will have revealed deeper reasoning.

Dereliction of duty

Many have faulted and described it as a dereliction of duty for the Ministry of Aviation to offer multiple designations and entry points to foreign carriers without seriously considering the medium and long-term economic implications.

Not a few have described the process as devoid of transparency and reeks of high-handed personal interest as opposed to the national interest. It virtually looks like outsourcing the operation of Nigeria’s aviation industry to foreign entities while relegating Nigerian carriers to the position of pawns in this internal chess game.

Monopoly

Pilot and Aviation Management Professional, Capt. Rwang Pam, said: “We are the “mark” and the “market” in this intriguing game of monopoly.” Pam disclosed that the reason Nigerian airlines are unable to commensurately reciprocate, saying “our Bilateral Air Service Agreement (BASA) is because they are weak, disorganised and fragmented.”

He further stated that the duty and the challenge for the Ministry of Aviation were to reverse the current situation by creating policies and implementing strategies that will facilitate the emergence of strong, organised, and viable local airlines.

 

He reiterated that for close to a decade, his group, Nigeria Aviation Safety Initiative (NASI), and other proactive organisations/ individuals had advocated strategic partnerships such as interlining, code-shares, commercial agreements, mergers, and acquisitions in the industry as a panacea for the current mediocrity and declining fortunes.

Economies of scale

Mega-carriers in Europe and America are merging to further extract cost synergies and take advantage of economies of scale. While they are doing that, it appears that the industry in Nigeria is superintending over the collapse of its aviation sector.

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.

The airlines are facing possible insolvency despite multiple government monetary interventions.

The death of many of these carriers is just a matter of time if the country continues to fritter away its market without adequate protection. The country’s carriers’ are weak, small, and fragmented and would continue to be at the receiving end and further compound their woes.

Already, Nigerian airlines are seriously disadvantaged and have less opportunity to be prosperous as a result of high taxes, scarcity of foreign exchange, and high cost of operations that have done incalculable damage to their operations

 

Air Peace, others fret

The little success Air Peace has made in the country’s aviation industry with newer airplanes and route expansion would amount to a waste of time and resources because of its disadvantageous position of lacking the resources to compete with many of the mega carriers.

The frittering away or the granting of multiple landing rights to foreign airlines has further eaten deep into their market. Twenty-two years after signing a provisional open skies agreement with the United States, Nigerian carriers are still unable to take full advantage of it.

Lost battle

Reviewing many of the Bilateral Air Services Agreements (BASA) appears to be a lost battle. Foreign carriers are having a field day, further shrinking the domestic market space. Virgin Atlantic is the only airline operating to only one destination in Nigeria from its base in London.

British Airways enjoys frequencies to Nigeria with landings in Lagos and Abuja. Emirates operates in Lagos and Abuja. Qatar recently was granted permission to operate four weekly flights to Kano and three weekly flights to Port-Harcourt with approval to operate via Abuja, which can be increased in the future to daily flights.

The airline has a daily flight into Lagos. Ethiopian Airlines is now regarded more or less as Nigeria’s ‘domestic airline’ because of favour it enjoys from the Nigerian government. It flies to Lagos, Abuja, Enugu, and Kano.

 

Restriction

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. Nigerian airlines 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.

Experts’ views

Aviation consultant, Dr. Alex Nwuba, however, said withdrawing multiple designations to the carriers looks practically impossible. According to him, “now, practically, having given multiple designations, what is the Federal Government to do, withdraw them?

These things are not whimsical. They are the product of diplomatic engagements between nations and are contractual. “They are usually reciprocal and based on “mutual benefit” and “a spirit of brotherliness”, no party unilaterally breaches them. Nigerian airlines threatening the government to withdraw them are absurd. What can government do?

Engagement is required, solutions are required, not threats.” Nwuba, however, called for the need to protect domestic airlines because they provide a more substantial ratio of jobs and opportunities to the country and the economy.

 

“My point is, they must make reasonable demands not constant unreasonable threats like fuel importation that no one stops them from making proposals, not threats to government on how restricting foreign airlines can enhance the marketplace and the economy. I am yet to see reasoned and convincing arguments,” he noted.

He expressed surprise that as an industry, the carriers have not challenged the Nigerian Civil Aviation Authority’s (NCAA)’s consideration of Air Nigeria as a national carrier, adding that they should have pushed for the government to justify its position as a basis for their ATL or tie the process up in court, in essence lacking basic survival instincts.

Aviation entrepreneur, Dr. Daniel Young, lauded the decision of the government to open multiple channels, (even more of the domestic airports) to foreign airlines that are willing to pay, stressing that after all, it spells fresh revenue for the Federal Airports Authority of Nigeria (FAAN), the Nigerian Airspace Management Agency (NAMA) and the rest of the aviation sector value chain.

He said: “These airlines are always behind their bills; always asking for reliefs and palliative and on top of that, forever threatening and cursing the same government and Nigerians that have bent backward to accommodate their interests. The advantages of opening more domestic routes to the foreign airlines are many and it is very wrong to dismiss them without careful consideration.”

Others are of the view that global aviation has gone beyond this level of discussion on multiple designations, adding that Nigerians need to wake up to see where the world is going and take up competition to remain viable.

Last line

It is time to see some concrete and proactive solutions to the problems bedeviling Nigeria’s aviation sector

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