• Sunday, June 16, 2024
businessday logo

BusinessDay

Defining national self interest – Lessons from a BASA agreement gone sour

Aviation agencies near collapse over N42bn, $7.8m airlines’ debt

The DG of NCAA, Captain Musa Nuhu recently issued a Press release, conveying the decision of the Honourable Minister of Aviation Sen. Sirika Hadi to replace the operating schedule approval of 21 frequencies/week to Emirates airlines with 1 weekly Frequency. He had relied on the spirit and letter of the Bilateral Services Agreement (BASA) between the two countries in responding to the single slots weekly offered to Air Peace at Sharjah Airport. The DG’s letter ended with his assurance to members of the public that national interests in all Aviation matters will be jealously protected.

The Aviation Policy and Strategic group discussed the fallout from this decision exhaustively, deconstructing the issues involved, even as its erudite members put forward many good suggestions about how to proceed. The engagements have been rich and enlightening and our intention in contributing to this discourse is to focus on the need to define a National Self Interest, in a robust policy framework document, to guide future BASA/external Aviation relations engagements.

This need is justified based on our experience as a Nation, which seems to suggest, we may be haunted yet again, by the ghost of many decision-makers who fell into the trap described in Jon Moen’s words:

“People who are managing a (financial or economic) crisis are not immune from personal motivations…Sometimes the people in charge don’t know at first that their personal motivations and past experiences might not be compatible with what is best for the greater good.”

In clear economic terms, slots represents a barrier to entry and airlines awarded slots benefit from an economic rent. A system established to ensure stability has slowly become the property of the airlines

We view National Self Interest “As the overriding purpose governing the state’s relationship with the outside world, it serves two purposes. It gives policy a general orientation towards the external environment. More importantly, it serves as the controlling criterion of choice in immediate situations. The dominant view of national interest, in other words, dictates the nature of a state’s long-term effort in foreign policy and governs what it does in a short-term context”.

The concept of Bilateral Air Services Agreement (BASA) originated from the compromise between the Open Skies advocacy of the US and the strong opposition by the UK and European countries, as a protection from their inability to compete with the formidable dominance of the US in the post-WW2 world. The delegates at the Chicago convention in 1944, therefore, agreed to a regime that allowed every country complete and exclusive sovereignty over its airspace with the provision that permissions were to be negotiated between contracting states on a bilateral basis. There are at least three different models of BASA, with varying levels of liberality, as may be agreed by the parties to it. We may therefore consider is a contract that should be mutually negotiated like any other.

Slots (to use the words of D.H. Bunker) is the most emotive subject in civil aviation. It is the approval from an appropriate authority to take off at a particular time at one airport and land at its destination at another time. The difficulty arises in so-called coordinated airports i.e., congested airports where there are severe capacity limits at certain times of the day. It subsequently dictates the difference between operating a route or not.

Read also: AirPeace will resume Dubai route when UAE officially sends letter – NCAA

The Adam Smith model of Self-interest as the motivator of economic activity and competition as regulator aims to ensure the market runs efficiently without intervention, in our context, the principle can be stated thus:

“It is not from the benevolence (kindness) of the government (of UAE), Its flag carrier (Emirates), or Airport (Sharjah) that we expect access to be granted Air Peace, but from their regard to their own interest.”

It is important to state at the outset that the self-interest we advocate is (in the words of Lauren Hall) consistent with the demands of justice and becomes the germ from which virtuous, fair behaviour grows, to drive the larger economic engine of society.

In clear economic terms, slots represent a barrier to entry and airlines awarded slots benefit from economic rent. A system established to ensure stability has slowly become the property of the airlines. Slots are sold at a remarkable premium or used as a tool to exert unfair competitive pressures. It has been reported that many European countries who oppose the sale of slots, do so on the principle that, a private firm cannot benefit from a public good (Mackay 2008).

The decision to operate slot system or not remain those of the relevant airport and can be considered “its own internal cuisine”, just as “A country’s motivation is its own concern, but the righteousness of its actions is the concern of all.”

Nigeria like other states deliberately follow certain policies in pursuit of their national interest. The current face-off with UAE, shows clearly that we have been a bit too eager to give than to receive or at least gave out before we received.

Our BASA is seemingly driven by the needs and ease of other countries. We have offered multiple entry points to countries, even where our own carriers have faced issues with slots for decades. These incongruities have never been convincingly explained to operators and other stakeholders

We have a unique opportunity to review our thinking and position in this area, especially as our slow adoption of Single African Air Transport Market (SSATM) and African Continental Free Trade Areas (AfCFTA) is totally in sharp contrast to our rush to embrace these dominant international brands

Our policies can start by ensuring that the investment by Nigerian carriers is complimented by access to the best of our facilities, as no other country will ever offer them same.

A crisis, they say, is a terrible thing to waste, and so we recommend that the minimum positive outcome from this saga should be a development of a comprehensive policy document that will spell out in clear terms, how Nigeria will take actions that will reduce to the barest costs and increase to maximum benefits all its future engagements to further our National Aviation Interests.

Adeniji is a founding Partner at General Sales and Solutions Management Limited (GSSM), a firm of Aviation and Management Consultants