Nigeria’s domestic airlines lose out on ‘Open Skies’ benefits

The troubled aviation sector’s contribution to the economy is expected to shrink further in 2017 as domestic airlines are not taking full advantage of the ‘Open Skies’ arrangements Nigeria has entered into to boost their operations.
The ‘Open Skies’ policy, also known as the Yamoussoukro Declaration, signed in 1999, which Nigeria is privy to, commits to the liberalization of African skies for African airlines and aims to establish a single African air transport market by avoiding market restrictions.

The Nigerian aviation’s sector’s contribution to GDP fell from $700 million in 2014 to $300 million in 2016 , a 57percent drop, according data from the National Bureau of Statistics (NBS).

Experts say it is the fall out of this policy that recently led to the approval of the aviation ministry for Asky Airlines, the Pan African Airline, to commence nonstop flights from Lagos to Johannesburg and Rwand Air, East African carrier to commence Lagos-Accra operations.

Nogie Meggison, president, Airline Operators of Nigeria (AON) says that while aviation contributes 0.3 percent to the country’s Gross Domestic Product, (GDP), Dubai’s  Emirates Airline, the Emirates Airports and the aviation sector in that Kingdom, as a whole,  contribute over 27 percent of Dubai’s GDP and support more than 416,500 jobs, with a projection of contributing over 37.5 percent in year 2020.
This, they say, presents a yawning difference, a case study and a pointer to possibilities for Nigeria because where there’s a will, there is a way.

Meggison, contends that policies such as the ‘Open Skies’ operations and the Bi-lateral Air Service Agreement, (BASA)  make it difficult for Nigerian airlines to compete because the country’s domestic airlines do not have the capacity to take advantage of them.

“Nigeria went ahead to sign BASA agreements and Yamoussoukro, without carrying along the major players, which are the airlines,” Meggison said.

Dong Pam, Chairman, Governing Board of the Nigerian Aviation Safety Initiative (NASI) recalled that the Yamoussoukro policy was signed by Nigeria in 2005 adding that Nigerian carriers may be having a problem with this policy, as they lack the capacity to reciprocate frequencies as other African airlines will.

“Do we have alternatives to the Yamoussoukro or the ‘Open Skies’ accords, which we signed to? We signed to them, hoping that our growing private airlines would take advantage of them. Unfortunately, they were behaving like spoilt children who want to be fed by the government at all times, or want government to pick up all their operational bills,” John Ojikutu, security expert and  former commandant of the Murtala Muhammed International Airport (MMIA), said.

Ojikutu explained that Rwand Air is flying to Ghana as though it is a Ghanaian airline, since Ghana does not have an airline of its own. Ghana is therefore leveraging on Rwand Air to fly to other countries, after which both countries will share the proceeds, the same situation applies to Asky Airline, which flies as though it is an Ethiopian airline.

Ojikutu recalled that this was what Bellview did in the late 1990s when the airline used its rights of Liberia and Sierra Leone to fly to the United Kingdom.

Also, Tayo Ojuri, Chief Executive Officer, Aglow Aviation, who shares the same perspective with Ojukutu, told BusinessDay that the Yamoussoukro Declaration would create a competitive business environment, enhance on-time departure and improve service delivery.

Ojuri, who also acknowledged the low capacity of domestic airlines said, “If the airlines are not strong enough, they have to position themselves strategically to have an investor that could partner or code share with them. Codesharing fortifies airlines in their operations and expands their market operations.

“This is what we do not have in Nigeria and that is why we have new airlines coming into Nigeria and leveraging on the Yamoussoukro policy which Nigeria signed years ago, to expand their operations,” he added.

BusinessDay’s checks show that Cathay Pacific Airways, Lufthansa, Swiss and Austrian airlines, sign code-share and frequent flyer agreements. Passengers arriving in Hong Kong from Frankfurt, Munich, Vienna and Zurich will then be able to seamlessly transfer to selected Cathay Pacific connections and with just one booking.

Also, Atlanta-based Delta Air Lines and Seoul-based Korean Air, have signed a memorandum of understanding to form an antitrust-immunised trans-pacific joint venture (JV). The carriers’ combined network reaches 290 destinations in the Americas and more than 80 in Asia.

 

IFEOMA OKEKE