Unbelievable: How Nigeria loses over N200 billion yearly to air pacts

BASA, otherwise called Air Transport
Agreement (ATA), is an understanding
between two nations to allow
international commercial air transport
services with their territories.
Traffic Information
• Cameroun, Senegal, others block Nigerian
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• Stakeholders flay multiple destination
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• ‘Blame our low capacity to reciprocate’
Unfavourable Bilateral Air Service
Agreements (BASAs) that allow foreign
airlines access into the local market is
costing the Nigerian economy and her
ailing aviation sub-sector billions of naira
yearly.

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The loss, in excess of over N200 billion,
follows the perennial inability of the
nation’s flag carriers to reciprocate and
compete with their international partners
on the BASA routes. Consequently, the
local air travel market, second largest in
Africa, keeps losing while its foreign
counterparts and their home countries
are the better for it.

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The Guardian’s investigation reveals that
the imbalance is even worse off in the
deals between Nigeria and her
neighbours. Sadly, while the nation’s flag
carriers are denied entry, the reverse
remains the case with flights from these
countries, moving from one airport to
another.

Indeed, the situation consistently
depletes the foreign exchange reserves in
favour of other economies. With a large
population, a comparative advantage at
that, the industry has kept losing
potential revenue that ordinarily should
have boosted its paltry 0.4 per cent
contribution to the nation’s Gross
Domestic Product (GDP).
BASA, otherwise called Air Transport
Agreement (ATA), is an understanding
between two nations to allow
international commercial air transport
services with their territories. It dates
back to the Chicago Convention of 1944.

BASAs cover the basic framework under
which airlines are granted bilateral rights
to fly two countries. The frequency,
designated airlines of the signatories,
origin, intermediate points as well as
traffic rights, type of aircraft and tax
issues are normally covered by
Memoranda of Understanding (MoUs).
Figures from the Nigerian Civil Aviation
Authority (NCAA) confirm that there are
at least 90 of such agreements as at
December 2016.

Nigeria’s notable partners include United
States, United Kingdom (UK), France,
Germany, Saudi Arabia, United Arab
Emirates (UAE) Qatar, South Africa and
Ethiopia.
Others are Netherlands, Italy, Egypt,
Morocco, Turkey, Togo, Ghana, Liberia,
Brazil, Cote d’Ivoire as well as new
entrants – Seychelles and Bahamas –
among others.
Besides U.S., UK, South Africa and Ghana
where Nigerian carriers like Arik, Air
Peace and Med-View significantly
reciprocate with flights operations,
returning the same business gesture in
others countries has been very difficult,
if not impossible.

These airlines fly multiple routes and
frequencies in Nigeria without any
reciprocation. Lufthanza flies from Port
Harcourt, Abuja and back to Munich,
Germany. Air France does Abuja, Port
Harcourt and back to Abuja before
heading for Paris. Yet, the airline
undertakes another leg from Lagos to
Paris.

Turkish Airline has about four
destinations in Nigeria. Ethiopian
Airlines flies to all international airports,
and has just added Enugu. Asky also does
multiple frequencies to Abuja and Lagos
daily. Emirates, Qatar and Etihad do
more than 28 frequencies weekly.
Delta does about 10 frequencies too
weekly. As at the last check, only Saudi
airlines can now airlift Nigerian pilgrims
to Saudi Arabia for Hajj operations.
In total, there are over 40,000 flights
operated by foreign airlines yearly in
Nigeria. The apex regulatory body,
Nigerian Civil Aviation Authority (NCAA),
estimates an average five million
passenger traffic on international routes
every year.

Another has it that two-thirds of about
N400 billion revenues made yearly on
ticket sales in the country are from
international operations. Therefore, with
Nigeria unable to reciprocate, almost all
N260 billion in ticketing, goes to foreign
airlines, leaving the nation with virtually
nothing.

The Chairman of the Airline Operators of
Nigeria (AON), Captain Nogie Meggison,
faulted the figures from the NCAA,
noting that the foreign airlines repatriate
over $2 billion (N610 billion) yearly as
proceeds from tickets.
He contended that the pacts have always
been designed in such a way to favour
the foreign carriers at the detriment of
the indigenous operators.

The imbalance, it was further learnt, may
not be unconnected with the alleged lack
of transparency and failure to allow
actual operators (airlines) to negotiate an
agreement that favours both sides.

“The last sets of agreements were good
example, where the minister just came
out to announce that we have signed a
BASA with another nine countries. It is
civil servants that are signing with real
businessmen in other countries. By the
time they bring it to airlines, nobody
wants to take it,” a Chief Operating
Officer (COO) of an airline said.

The Part XI, Section 37(1) of the CAA 2006
Law empowers the NCAA “to perform air
transportation, licensing functions in the
manner which is considered best to
ensure that Nigerian registered airlines
compete as effectively as possible with
other airlines, providing air transport
services on international routes.”

The section, however, provides that in
performing the role, the regulator “shall
have regards to the minister’s advice
with respect to the likely outcome of
negotiations with government of any
other country for the purpose of securing
any right required for the operation of
an airline in Nigeria of any air transport
services outside Nigeria.”

NCAA’s spokesperson, Sam Adurogboye,
said the apex regulator was alive to these
statutory responsibilities, dismissing as
untrue insinuations that the agreements
were unfavourable, shady and against
national interest.
Adurogboye reiterated that BASA
agreements are equally witnessed by the
ministries of Justice, Foreign Affairs,
Aviation and designated airlines.

He added: “BASA will always want the
airlines that will reciprocate to be
present. They have always been there
right from the beginning. Some of the
agreements dated back to the days of
Nigerian Airways. So, if the new airlines
like Air Peace and Med-View are
complaining, then one can understand
why.

“We have always designated airlines to
reciprocate, but they will not go. Besides
the fact that they have to meet safety
requirements before they are allowed to
reciprocate, do they really have the
capacity to compete? If a foreign airline
brings 777 or A380, how do you hope to
compete using a 737?
“That is why people are calling for a
national carrier. These people (airlines)
are just okay with one-man Nigeria
Limited, so they are limited and cannot
compete. There is nothing in the BASA
that favours one country over another.”

The Chief Executive Officer (CEO) of Air
Peace, Allen Onyema, refuted the claims
that local airlines are not strong enough
to compete on some of the routes, but
pointed out quickly that some African
nations still engage in bad politics of
market protection by stealth.
Onyema revealed that government
recently granted his airline the right to
operate on the west coast, including
Ghana and other countries in Central
Africa, coupled with six international
routes – China, U.S., U.K., India, Dubai
and South Africa.

While expressing joy at the move, he
noted that most African countries had
not allowed them to reciprocate while
their airlines keep feeding fat on Nigeria.

He observed: “African countries are
trying to stop us, especially when they
think you are a competition. We have
right to fly to Cote d’Ivoire since two
years, but they are not even answering
our mails because they want to protect
Air Cote D’Ivoire. Senegal has not even
come here in two years to assess our
facility. When we threatened to take a
legal action to stop them from coming to
Nigeria, they opened the door, but gave
us one ground handling service at the
cost of $4000 per trip! So how are you
going to make it?

“We are ready to go to all the African
countries and we have the equipment to
represent this country proudly. If Togo
does not allow Air Peace to come into
their country by May 21, I will go to court
to stop Asky. Enough is enough.”
Onyema went on: “These African nations
set up themselves with Nigeria in mind.
Everything is geared towards ‘let’s go an
ravage Nigeria’. So, the earlier we start
supporting our own, the better.

These
people take more from Nigeria and give
little in return. Yet at any slight
discomfort, they blackmail this country.
Foreign airlines are fair weather friends.
They gain billions out of this country in
foreign exchange. So, why should we
always give them a red carpet reception
at the detriment of ours?”

The Secretary General of the Aviation
Round Table (ART), Group Captain John
Ojikutu (rtd), maintained that the
situation continues to rub off on the
economy and local airlines because “we
have no known policy for the growth of
Nigerian airlines.”

Courtesy: The Guadiana

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