Worried by the ill treatment of Nigerian airlines and passengers abroad, the Federal Government recently said it would enforce the principle of reciprocity in its commercial deals with foreign airlines flying into the country and in a move considered as part of the fulfilment of that threat, Minister of Aviation, Mr. Hadi Sirika while announcing the reopening of the country’s air space for international flights last week, exempted Air France/KLM, Etihad, Lufthansa, Royal Air Maroc, RwandAir, South African Airways, and Air Namibia from flying into the country.
“The principle of reciprocity would be applied; I bet you the conditions you give Nigerians who travel to your country – we will apply the same thing. If you ban us from coming to your country, the same will apply the other way; we just hope for a level-playing field on the issue of reciprocity,’’said Minister of Aviation, Mr. Hadi Sirika.
The need for the government to adopt the reciprocity policy is believed to be fuelled by the frustrating experiences of Nigerian airlines who were often schemed out by foreign countries in participating in the airlift of stranded passengers during the peak of the COVID-19 pandemic and by the ban by some countries on Nigerian travellers.
Without doubt, aviation became one of the worse hit from COVID-19 as almost all of the world’s airlines recorded huge loses with flight operations suspended for more than four months. The re-start of operations in recent weeks, (including Nigeria), however, has seen countries around the world coming out with some protectionist policies for their national and flag carriers.
Local airline operators and other stakeholders, have, no doubt lauded the new government policy direction, but they would have preferred that the government ended the regime of lax aviation policy arrangements that gives undue advantage to foreign airlines to fly into more than one airport in Nigeria, while none of the country’s carrier reciprocates by flying into these foreign countries.
In the recent past, these unfair practices, have drawn the criticisms of Nigerians, including lawmakers, with the government portrayed as weak and incapable of defending the local airlines, especially in situations where Nigerian carriers are deliberately frustrated whenever they seek for permits to fly into foreign countries to reciprocate their entry into Nigeria in line with existing Bilateral Air Service Agreements (BASAs).
Sirika, therefore, has the right to protect Nigerian airlines. In the last one month, the government had been engaged in the battle of saving the jobs of pilots, engineers, and other workers of Air Peace, Bristow Helicopters, Arik Air, and other airlines following massive job cuts by their management, a decision propelled by the impact of COVID-19 on their businesses.
Operators, therefore, have commended the government for the move to reciprocate the poor treatment of its local airlines in line with the global post COVID-19 trend adopted by other countries, saying that the failure to do so could lead to more Nigerian job losses and increased capital flight from the sector. The airlines need to fly within and outside Nigeria to improve earnings.
“More than any other time, there is the urgent need to take proactive steps to protect Nigerian airlines in the post-COVID-19 era,” said Lagos-based economist, Aaron Oshie.
“The sector currently is contributing less than one per cent to GDP, but it has the potential to do better. The government and regulatory agencies in the sector must take steps to block all leakages and this includes supporting local airlines or designated flag carriers to reciprocate existing Bilateral Air Service Agreements, especially on lucrative international routes like London, Paris, Dubai, New York, Frankfurt, Johannesburg, as well as launching out to new routes like India, China, Japan, Israel etc. This is the only way to grow local capacity, create and retain existing jobs and grow GDP contribution from aviation,”he said.
Chairman/CEO of Air Peace, Allen Onyema, while also lauding Sirika for the pronouncement said: “You are causing a positive revolution in the aviation world.”
The Air Peace boss who has remained a champion for the abolition of multiple routes designation to foreign airlines said the minister had brought so much respect to Nigerians by the policy.
“Nigerians all over the world are walking tall with enormous pride since the last few hours when the news broke out. This is the beginning of the end of the stigmatisation of Nigeria and everything Nigerian. From my sincere heart, I have come to appreciate your nationalistic tendencies,”he said.
Challenges with BASAs
At the root of the poor performance of Nigerian airlines international operations, however, remains the failure of successive governments to treat its local airlines flaying its flag on foreign routes the same way it did to the erstwhile national carrier, Nigerian Airways.
According to the President of the Airline Operators of Nigeria (AON), Nogie Meggison, local airlines issued the permit to fly as flag carriers for the country are often overburdened by multiple taxes, given no tax rebates nor fuel discounts, and left to their fate to weather the harsh storms of international aeropolitics with established global airlines.
It was not the same way the government handled the foray of its liquidated Nigerian Airways as it got all the support from the ministries up to the foreign missions of countries it fly into.
Sirika’s reciprocity policy, should therefore should not just be restricted to placing a ban on the entry of a carrier from a foreign country that poorly treats Nigerian airlines, it should in fact, start with the strict implementation of existing Bilateral Air Service Agreements (BASAs) with about 88 countries.Some of these deals, which ought to allow the country’s local airlines fly into any country whose national or flag carrier operates into Nigeria, have remained largely unreciprocated, especially in the last 20 years, owing to a number of factors.
Some experts have accused the government of not involving officials of the local airlines in negotiating these deals with foreign countries. And when from the outset, the local airlines who should reciprocate the BASAs for Nigeria are left out in the negotiations, it amounts to laying the foundation for their marginalisation and abuse.
There is also the allegation of officials of the Federal Ministry of Aviation colluding with foreign airlines for pecuniary gratifications to ensure that Nigerian carriers are left out of these BASAs so that a monopoly is created for foreign airlines to operate in and out of Nigeria unchallenged, an action that negates the essence of the BASAs.
Another challenge has to do with the practice of an impossible-to-meet fiscal and regulatory policies imposed on Nigerian airlines by foreign countries targeted at frustrating the reciprocity of these bilateral air contracts. Interestingly, these are countries whose airlines fly unhindered into Lagos, Abuja, Kano, Enugu, or Port Harcourt, Nigeria’s five major international airports, trafficking passengers and cargo and raking in millions of dollars yearly.
A recent data from the AON estimates Nigeria loses about $3billion yearly as capital flight to foreign airlines flying into the country without any reciprocity by a Nigerian carrier.
“The problem is not the BASAs per se because all the agreements are clearly spelt out in terms is aircraft type, capacity, numbers of seats, among others,” said Olu Ohunayo, member of the think-tank, Aviation Round Table (ART).
“The problem is that some of the foreign airlines use our officials to alter the agreements. They come back and ask for extra flights, breach the BASA, sometimes in the name of Hajj and these are approved by Nigerian officials,” he lamented.
Improved local capacity
In the past, the absence of a vibrant national or flag carrier was often cited as major reason for this skewed BASA deals that favour foreign airlines at the expense of local operators, but in the last five years, this excuse no longer holds, as some of Nigeria’s flag carriers like Air Peace, Max Air and Aero Contractors have developed the requisite technical and aircraft capacity to reciprocate these deals within Africa, Europe, Asia and Middle East.
One good news is that the industry now has the capacity to compete with any of the renowned global airline. For instance, Air Peace Airline, has in its fleet three Boeing 737 aircraft which it effectively deployed during the lockdown on long haul flights to India, China, UK and Israel to airlift medical equipment and stranded passengers, even at fares lower than that offered by foreign airlines on the same routes. It was these same aircraft it sent to bring back Nigerians who were victims of xenophobic attacks in South Africa.
The other airlines like Max, Arik, Dana and Aero are also investing in various re-fleeting projects to boost their capacity. And of there is anything that they need to sustain the tempo, it is the support they get from government in tax rebates, forex supply at affordable rate from the CBN, single digit interest loans, and a level playing field that restricts the foreign airlines to one or two airports while paving the way for interlining with the local airlines.
Time to walk the talk
With dwindling revenues from the petroleum sector and the impact of COVID-19 on the economy, the Federal Government has no doubt turned to the non-oil sector to improve its earnings with aviation is listed as one the sectors with the potential to bail the economy.
Experts have therefore suggested that the first step that Sirika should take in enforcing his reciprocity threat is in protecting those local airlines making forays into the international market.
And there is no better way to do this than ensuring the strict enforcement of BASAs to retain part of the $3billion repatriated yearly as capital flight by foreign airlines from Nigerian.
“It is a good thing that the government has woken up finally to its responsibility; the reciprocity threat is, in fact, long overdue,” said travel and tour agent, Isreal Akam.
“Sirika and the aviation sector regulators must walk-the-talk so the threat doesn’t just end up as one of those rhetorics we hear from government,”he addd.
Akam’s position is held by majority of stakeholders in the aviation sector who over the years have demanded a tit-for-tat for those countries that have been hostile to local airlines.
Ohunayo, who is a spokesman for the Aviation Round Table (ART),told our reporter that it was time to undo the ills of multiple destinations that have simply given the local market away to foreign carriers because that is what reciprocity really means.
He said the government must see the local airlines it designates as flag carriers on international routes as the beacon of what the country represents and provide all the support needed for their operations as its international ambassadors.
“Once we designate an airline as a flag carrier on a route, we must defend it totally as our own,” Ohunayo said. “It must have all the necessary support and backing to succeed in reciprocating the BASA. This is what has been lacking in Nigeria and it must stop,” he added.