Domestic carriers grapple with a lot of challenges ranging from high cost of aviation fuel, lack of aircraft maintenance facility, foreign exchange rate, multiple taxation amongst others.
However, among these problems is the multiple frequencies operated by foreign airlines in the country; one that has continued to hugely deplete the revenues of local carriers.
BASA agreements
Bilateral Air Service Agreement (BASA) is an agreement that allows foreign airlines to operate in the country but the agreement is founded on the principle of reciprocity. It is a deal that enables a country’s airlines to enjoy equal leverage, in terms of flight operations, in countries with which their home country has an air agreement.
In addition to the numerous BASAs signed by Nigeria with other countries, the country recently signed BASA with the Republic of India. The agreement stipulates that passengers being processed from Nigeria would enjoy direct flight to India as a result of the agreement.
While Nigeria has continued to sign various BASAs, experts have raised concerns on the ability of Nigerian carriers to reciprocate these agreements and even if they are able to reciprocate, they often contend with stringent regulations from the host countries, making it extremely difficult to sustain the routes.
It is in the light of these Nigeria needs to find out what went wrong with previous air agreements it signed with other countries and why they are not delivering value before it signs more.
How BASA works against local carriers
No matter how juicy a BASA agreement may seem between two countries, these agreements must be signed on the basis of reciprocity or else the country on the other end may be shooting itself on the foot.
Domestic airlines operating in Nigeria have continued to lose out in revenue and flight frequencies, while foreign airlines are increasing and opening more routes in Nigeria after BASA with some countries.
The Single African Air Transport Market, (SAATM) which is part of the BASA agreements is a flagship project of AU Agenda 2063, which aspires to create a single unified air transport market in Africa, liberalise civil aviation in Africa, and motivate the continent’s economic integration agenda.
The agreement has seen more foreign airlines such as Sudanese airlines, Ethiopian airlines, RwandAir, Emirates open more routes and increase frequencies in Nigeria, while Nigeria airlines suspend operations into foreign countries.
Nigeria currently has 24 foreign airlines operating in the country and most operate in Lagos, Abuja, Port Harcourt and Kano, while only two Nigerian carriers, Arik and Air Peace currently flies into West African and UAE countries.
Air Peace recently commenced operations into Dubai via Sharjah and will soon commence operations into Johannesburg in few weeks. Air Peace will need the support of government in sustaining these competitive routes, just as other countries support their local carriers from unfair competition.
However, the government will start by supporting and protecting its own (Air Peace) by first reviewing the one-sided BASAs it signed with some of these countries, which is working against most of Nigeria’s domestic carriers.
Few months ago, the Federal Government approved two Sudanese airlines – Badr Airlines and Tarco Airways to operate into Kano. The two airlines are currently operating two flights weekly from Khartoum, Sudan to Kano.
Ethiopian Airlines has gradually evolved to become a Nigerian indigenous carrier as it presently flies to four destinations in the country from its base in Addis Ababa.
The East African carrier operates scheduled flight operations to Murtala Muhammed International Airport, MMIA, Lagos; the Nnamdi Azikiwe International Airport, NAIA, Abuja, Aminu Kano International Airport, AKIA, Kano and recently, Akanu Ibiam International Airport, Enugu with over 21 frequencies weekly.
Apart from Ethiopian Airlines, other foreign airlines like RwandAir, British Airways, Etihad, Air France/KLM, Egypt Air, Emirates and South African Airways among others have joined the bandwagon of carriers that operate multiple entries into Nigeria regularly without reciprocity from any of the nation’s carriers.
On the other hand, Medview, a Nigerian carrier which flew into Dubai and London suspended operations into these countries because the airline did not receive the needed support from the federal government and the host country.
Arik Air which flew London, Johannesburg-South Africa and almost all countries in West and Central Africa suspended operations into these countries because of its huge debt to its foreign partners and unfavourable policies by host countries.
However, Nigeria’s largest carrier, Air Peace has risen up to the challenge by representing Nigeria in other parts of the world through its commencement of Dubai route and is currently seeing huge passenger traffic into the route with its highly subsidised fares, thereby shaking up competition on the route.
With the commencement of operations on this route, Air Peace would be offering travellers from Nigeria the opportunity of connecting 23 other destinations from the United Arab Emirates. The destinations that could easily be connected from Sharjah international airport include: Riyadh, Madina, Jeddah, Beirut, Delhi, Colombo, Dhaka, Mumbai, Kathmandu, Moscow and several others
However, while foreign countries have continued to burden Nigerian carriers with obnoxious demands, making it almost impossible for domestic airlines to operate, federal government continues to give more frequencies to foreign airlines.
Domestic carriers say this agreement is slowly killing their operations and benefiting the foreign carriers.
A call for FG’s support
Some operators have argued that domestic airlines can survive on domestic routes if government can reduce the multiple landings given to the foreign airlines to reduce their incursion into the domestic routes and invariably domestic market.
John Ojikutu, Aviation Security Consultant and Secretary General of the Aviation Safety Round Table Initiative (ASRTI), told BusinessDay that foreign airline should not be given multiple destinations and landings.
Ojikutu said, “Ethiopian airline’s multiple landing should be reduced to only two, Lagos or Abuja and any other. British Airways and Virgin Atlantic should decide which out of Abuja or Lagos to fly into but none of the two should fly to Lagos and Abuja as British airways is presently doing. The idea is to create markets for domestic airline.”
Allen Onyema, Chairman of Air Peace has stressed that Air Peace will never be able to combat international aero politics without the support of the government.
“We can only combat it if our government supports us. It is a shame that several Nigeria airlines have come here (Dubai) and they were pushed out either through unfair competition or some arm-twisting tactics, it is very unfair.
“The only plan we have is the plan of sustainability, to sustain our operations to the best of our abilities. That is so far as we can go, if we are not supported. So Air Peace needs the support of everybody,” Onyema added.
Air Peace, a catalyst for economic development
In the past, government officials blamed Nigerian airlines for not having capacity to reciprocate traffic but that can no longer be said about AirPeace, which has not only commenced international operations but has acquired several aircraft in a bid to compete favourably in local and international market.
BusinessDay’s findings have shown that AirPeace alone employs over 3,000 direct workers; and provides over 9,000 ancillary jobs, a feat several foreign airlines operating in the country has been unable to achieve.
Air Peace is energising the economy of the country and acting as a catalyst with its operations of about 110 flights daily, moving Nigerians around in the economy, no doubt, the airline should be supported.
Indeed, the airlines led the way with an unprecedented investment in aircraft in its bid to make a strong case for Nigerian flag carriers on regional and international skies, even as no city is left behind on the home front.
To this effect, the airline recently placed a firm order for 10 brand new Embraer 195-E2 aircraft. The order comprises purchase rights for another 20 E195-E2 jets. Also, 124-seater jet in dual class and 146-seater jet in single class configurations respectively. With all purchase rights exercised, the contract is valued at N640.5 billion ($2.12 billion) based on current list prices.
The carrier also set a regional record in September 2018 when it ordered 10 brand new aircraft from Boeing, increasing its fleet size then to about 37 aircraft. With the new order, Air Peace’s fleet size has increased to 67 aircraft.
Air Peace had earlier set a domestic record as the first Nigerian airline to acquire and register the Boeing 777 aircraft in the country. Three of the four wide-body aircraft it acquired for its long-haul operations to Dubai, Sharjah, Johannesburg, London, Houston, Guangzhou and Mumbai have so far been delivered.
A call for review of BASAs
For domestic airlines to survive and remain in business, there is a need for government to review its signed BASAs.
Last year, the federal government promised to review its BASA partnerships but that has not implemented till date.
Muhtar Usman, the director general of the Nigerian Civil Aviation Authority (NCAA), has said that BASA and all forms of partnership with international carriers are not static but are subject to review from time to time.
It is in this light, that local airlines have continued to clamour that this review be carried out and there can be no better time than now, when Nigerian carriers are bracing up for competition in the international market.
IFEOMA OKEKE
