Experts in the aviation industry have said that the recent Bilateral Air
Services Agreement (BASA) signed between the federal government and
Qatar will rather than strengthen the domestic airlines, impoverish the
nation’s airlines and economy.
The agreement which is expected to pave way for more direct flights
between major cities of both countries, on the principle of reciprocity
by the designated airlines, on behalf of the countries have been viewed
by experts as an unprofitable venture.
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“The agreement would now give Qatar Airways, which presently has
seven frequencies into Nigeria, more entry points into the country but
compound the problems of the domestic airlines, Harold Demuren, former
Director-General of the Nigeria Civil Aviation Authority (NCAA) told
reporters.
However, Hadi Sirika, Minister of State for Aviation, had said after
the signing of the agreement that the agreement would promote trade,
commerce, tourism and travel, between both countries.
Demuren argued that presently, Nigeria has no airline that could
compete favourably with Qatar Airways, thereby making the agreement
one-sided.
“It is good politics to sign BASA agreements, but it is bad
economics. Airline operation is an invisible trade. Anytime you buy a
ticket from a foreign airline, that money will be taken back in
dollars,” Demuren explained.
“Presently, Nigeria airlines cannot compete with Qatar Airways in
terms of equipment, personnel, maintenance and other areas. I am not
saying that we should not sign BASA .What I am saying is that if we must
sign BASA, we must know the content of the BASA we are signing,’’
Demure said.
Ethiopian Airlines has gradually evolved to become a Nigerian
indigenous carrier as it presently flies to four destinations in the
country from it 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 the carrier, other foreign airlines like British Airways,
Etihad, Air France/KLM, Egypt Air, Emirates and lately South African
Airways among others have joined the bandwagon of carriers that operate
multiple entries into Nigeria regularly with little or lack of
reciprocity from any of the nation’s carriers.
The airlines above repatriate several billions of naira annually to
their home countries without any visible investment or employment in
Nigeria while the weak Nigerian carriers are unable to compete and
disappear from the radar gradually.
Yet, despite all these obvious challenges and huge disadvantage
against the country, the Nigerian Government still about two weeks ago
in Doha, Qatar signed a Bilateral Air Services Agreement, BASA, with the
Qatari Government to pave way for more direct flights between major
cities of both countries.
Players in the industry have said that in the past, international
airlines that operated into the country based on BASAs paid royalties
which was how the government got some money in return for its
investment.
However findings revealed that presently some international airlines
no longer pay royalties, thereby denying the Federal Government
much-needed revenue.
In 2014, Qatar Airways ticket sales on the Nigerian route rose to
almost N9 billion in spite of just seven frequencies to MMIA alone. The
ticket sales placed the carrier as one of the highest earners in
Nigeria. Till date, there is no competition on the Nigeria-Qatar route
from any Nigerian carrier as no airline from the country reciprocates
flight to Doha or any other city for that matter in the Middle East
country.
John Ojikutu, Secretary General, Aviation Round Table argued in that
rather than allow multiple entries for foreign carriers, the Nigerian
Government should restrict their operations to just one entry while the
nation’s carriers airlift their passengers to their final destinations.
Ojikutu stressed that the signing of the agreement would further
constitute more constraints against the nation’s airlines as the
passengers they hitherto distributed would be taken to their final
destinations by foreign carriers.
He decried that unlike in the days of the defunct national carrier,
Nigeria Airways, where BASAs were done in conjunction with the airline;
the reverse was the case with the current flag carriers that fly
international routes.
The secretary general said that out of the 70 BASAs signed by
Nigeria, only 23 are operated and most if these are skewed by ministry
of aviation officials mainly to d benefits of d foreign airlines. For
example of over 48,000 seats available weekly on d operating BASA
routes, Nigerian carriers can barely make 4,000 seats.
“When a party to any BASA cannot reciprocate on the number of fleet
frequencies agreed on, the disadvantage party collects royalties from
the advantaged party or if a party wants more frequencies than the
numbers contained in d BASA, the parties negotiate commercial agreement
and collect yet more royalties,” Ojikutu added.
British Airways & Virgin Atlantic both fly 21 weekly fleets to
Nigeria defiantly much more than the 7 weekly fleets in d
Nigeria/Britain BASA.
Ojikutu noted that Nigeria is not getting any appropriate royalties
or benefits from the extra frequencies that British airlines are making
outside d BASA.
Arik air barely reciprocates 7 weekly fleets. The same situations
apply to Delta and United Air which operates 16 weekly flights to
Lagos/Abuja.
“It is economic disaster for any nation to open its sky for others to
come do business when you have no reciprocity facilities and you are
not gaining commercial or economic benefits,” he said.
Demuren noted that once additional routes or frequencies were
allocated to foreign carriers, the indigenous airlines are negatively
affected while the demand for foreign currencies especially dollars
would put more pressure on naira.
“In BASA, the two countries must
benefit from it and should not be one sided. As it is, it’s already
one-sided and these foreign carriers are no longer paying royalties to
Nigeria. It is good to have many airlines come to our country, but when
you don’t reciprocate it, you running at a loss,” Demuren said.
Also, aviation analyst, Ewos Iroro said that BASA was supposed to
facilitate tourism, diplomatic ties, trade, businesses and others, but
must be critically analysed by both parties before putting pen to paper.
On the Nigeria/Qatar ties, he argued that the decision of the
country’s government to sign the agreement with the Middle East country
at a time when the country doesn’t have either national or flag carrier
that could compete with the existing carrier on the route.
He said that with the agreement, it indicated that Qatar Airways
could fly into any of the major cities in the country, Lagos, Port
Harcourt, Abuja, Kano and Enugu, maintaining that Nigeria should create a
hub instead of allowing multiple entries among foreign carriers into
its cities.
“We don’t even know if the agreement is that they can fly unlimited
frequencies into different cities within the country. The airline with
highest fleet in Nigeria has less than 30 aircraft in its fleet. Qatar
Airways is a five star airline, an airline that flies globally, how do
you compete with it?,” Iroro said.
Andrew Okunuga an ex-staff of Nigeria Airways insisted that foreign
carriers operating into the country should not reduce their frequencies
as the country doesn’t have the capacity to airlift air travelers from
the country yet.
It will be recalled that in the days of Nigeria Airways, extra
frequencies earned Nigeria extra revenues of about $180 per passengers,
but now, increased frequencies and routes, foreign carriers pay less
than $30 per passenger, while most of them operate into the county on
zero dollar royalty.
Okunuga however said that Nigerian carriers on international routes
like Med-view Airline and Arik Air should be part of any BASA
arrangement Nigeria is entering into and called on respective
authorities to encourage growth among the domestic airlines by making
them international players.
