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Routes’ concession: Nigerian airlines in whining game

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Routes’ concession: Nigerian airlines in whining game

Multiple routes designation to foreign airlines has been one of the headaches of domestic airlines. The truth is that Nigerian airlines are so small, fragmented and not ready for competition. WOLE SHADARE writes

Their grouse

It first started as a subtle protest, but later assumed a wider dimension as airlines, particularly Airline Operators of Nigeria (AON) and a few others sympathetic to the precarious situation of Nigerian carriers, have pleaded with the Federal Government to review the Bilateral Air Services Agreement (BASA) it has with over 70 nations.

This is obviously because of their inability to compete. They also frowned at some of the concessions given to foreign airlines at the expense of the domestic carriers, saying it is very injurious to the nation’s airlines. Besides, they noted that the situation has contributed immensely to the continuous death of local airlines.

BASA is a pact signed between two nations to allow international commercial air transport services between their territories. BASA, founded on the principle of reciprocity is a deal that enables a country’s airlines to enjoy equal leverage in term of flight operations in countries with which their home country has an agreement.

One of the fundamental principles of international trade and business is economic co-operation with agreements of different forms and shades as the basis for such interdependence. In air transport, air services agreements are entered into, which should be mutually beneficial to the parties, hence BASA.

Self-destruct

Recent happenings in the aviation sector seems not to be in favour of Nigerian airlines as deluge of complaints and displeasures are being expressed by industry operators on the lopsided nature of these agreements in favour of many European airlines. Who is to blame?

Although government takes part of the blame, the operators are illequipped to compete with their European, American and Gulf carriers and only interested in blocking those that are ready and serious to do airline business.

This is because they are fragmented, small and lack the capacity to compete. Give them 10 years to operate to London, Paris and Dubai without those countries reciprocating, it will still be a case of whining.

They are sure to do poorly as they have been primed to perform dismally.

Lack of capacity

The question on the lips of many travellers is, do the Nigerian airlines have the capacity to operate many routes that they were designated many years after they got the rights.

Most of the time, Nigerian carriers offer low quality services as in the case with Arik Air, which brought shame to the country with flight delays and cancellations that ridiculed the very essence of the nation’s aviation industry.

When the number of aircraft owned by Nigerian designated carriers are put together, it is less than half the fleet of airlines such as British Airways, Ethiopian Airways, South African Airways, Lufthansa, Delta, even RwandAir.

Image damage

Even the combination of all African airlines have fleet less than some international airlines such as Delta and virtually all Nigerian and African airlines are at the verge of bankruptcy.

The cost of operating airlines in Africa is the highest in the world and cost of aviation fuel is also the highest. Arik, which came with a lot of promise 10 years ago was a bad advertisement for Nigeria as the country was in the news for all the wrong reasons – ranging from drug-related issues with its crew and huge debts that made lessors to impound aircraft when the carrier defaulted on lease agreements.

Arik had two designations from Abuja and Lagos to London but claimed it was forced out by the underhand tactics of Britain, which caused diplomatic row between Nigeria and UK.

The airline was also a total failure on the lucrative New York and Dubai routes, alleging crude tactics by the United Arab Emirates.

That sums up the unseriousness of the nation’s airlines to compete and offer world class services. Same way with Virgin Nigeria, which was at the height of its fame made people to think it would replace the defunct Nigeria Airways. The carrier never fulfilled its potential until it also went into extinction.

Lesson for Air Peace

Joyfully, Air Peace has been designated on six international routes, one hopes that the failure of both Arik and Virgin Nigeria would guide it to do very well and save the country another round on failure on routes that are supposedly lucrative but mismanaged by airline owners.

Not a few believed that since the airlines can’t compete with their foreign counterparts, it was very wise for the government to allow them come in and made them to pay royalty because of the inability of the local airlines to reciprocate BASA.

Although, the government has come under intense criticisms for the opening up of the country to the predatory antics of the international airlines, experts said air travel cannot be perpetually held down because of the unpreparedness of the carriers that do not have much to offer.

Liberalisation

Global aviation is moving from protectionism to liberalisation. This debate might seem insignificant to some, but the liberalisation of air transport service is in consumers’ best interest and it has the potential to change that trend. For intra African travel, liberalisation of African skies many said could reduce the difficulty in travelling within Africa rather than to travel to Europe first before connecting another African nation.

This has made it easier for African nations who are signatories to the Yamoussoukro Decision (YD) to link more African cities, knocking off air transport barriers to link countries cities. This action has been labelled by Nigerian operators as wrong, describing the fifth freedom air right as criminal, forgetting quickly that Nigeria is a signatory to that policy.

Experts’ opinion

A former Managing Director of the Federal Airports Authority of Nigeria (FAAN), Mr. Richard Aisuebeogun, said: “Do Nigerian private carriers have the capacity to operate these routes on a sustainable basis? What happened to Virgin Nigeria, Air Nigeria and Arik on the London Gatwick route and the London Heathrow routes respectively is not only infuriating but a personal embarrassment to Nigeria.

Has the Ministry of Aviation noticed this development in a space of one and half decade?” Aisuebeogun stated that his strong worry is what exactly has the Nigerian Civil Aviation Authority (NCAA) done to prevent re-occurrence with the operating airline, Medview, which have reduced the frequency to two from three when they started with fun fare just about a year ago.

Aviation consultant, Grp. Capt. John Ojikutu (rtd), while commending the government for allocating seven international routes to Air Peace without including Addis Ababa said, “There must be something very uncommon in the way we allocate multiple destinations to foreign airlines in this country to the disadvantage of our domestic airlines.

“Sure, there must be some financial interest to the airline and to some persons in letting Ethiopian Airways making about 20 weekly flights to about five of our airports; and I ask, why can’t the Nigerian airlines participate or compete with Ethiopian Airline on this route. I have never had sympathy for the domestic airlines mainly because they have used their mentors and partners in the government to draw back the progress of the industry through their indebtedness to other participants.”

He accused virtually all the carriers of benefitting undeservedly in intervention funds as against demanding for their rights in what certain government officials have unilaterally been given to foreign airlines.

Ojikutu noted that Nigerian airlines are closing shops because the largesse is no longer available, adding that the only option available to them is to go out to compete effectively with the foreign airlines on the international routes as well as on the domestic routes, leading tovmultiple destinations allocated to foreign carriers.

Conclusion

The prospect for new long haul route for any Nigerian airline or any of the smaller regional African airlines are challenging.

Competition against airlines from outside Africa is fierce and Africa’s airlines with a few exceptions lack the scale to complete effectively.

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