Foreign airlines repatriate over 75 per cent of their revenues from Nigeria
A former Managing Director of the Federal Airports Authority of Nigeria (FAAN), Richard Aisuebeogun, has called on the Federal Government to introduce the Fly Nigeria Act, stressing that if the policy is introduced, Nigerian airlines will become carriers of choice with foreign carriers having no choice than to partner with the country’s airlines.
The action, he further stated, would also allow foreign carriers into code-share arrangements with a view to earning revenue from the partnership.
He stated that as a corollary, foreign airlines repatriated over 75 per cent of their revenue, a situation that has made the Minister of Aviation, Hadi Sirika, to come up with the establishment of a private sector led national flag carrier.
He recalled that Serika had in 2018 appealed to the parliament to give this Act “Bill” the urgency it deserves to save Nigeria carriers.
Aisuebeogun, in a paper he presented at the Business Day OAL Law and Development Summit with theme, “How Law Can Be a Tool For Revenue Generation And Job Creation,” averred that only the Fly Nigeria Act could guarantee the survival of the new airline, saying, “time to mop up and plug all leaks is now”.
The proposed legislation is mirrored after that of the US Fly America Act that seeks to make it mandatory for all employees, consultants, contractors, and grantees of the government of Nigeria, to use Nigerian air carrier service for all air travel and cargo transportation services funded by the Nigerian government.
His words: “Revenue will be created, capital flight will be reduced and jobs will be created too. Since our aviation cabotage policy restricts non-Nigerian airlines from handling domestic commercial flights in Nigeria. The answer is not far-fetched. The aviation sector is a key foreign exchange earner for Nigeria through international flights.
“The initiative of the Fly Nigeria Act will curb capital flight and set the tone for Nigeria’s push to promote the local currency, increase foreign exchange earnings and preserve the local airlines for growth,” he added.
The former FAAN boss stated that the country needed to accord the “Fly Nigeria Act” Bill a sense of urgency, restating that the bill was introduced in 2018 before the 8th National Assembly was dissolved.
“Currently, there is no deliberation on it but the Minister of Aviation is making strong efforts to reintroduce and push for its passage it into law as another tool to engendering economic growth.
“We need to renegotiate our bilateral air services agreements to address the lopsidedness or imbalance. US President D Trump did a similar thing with Iran on the Joint Comprehensive Plan of Action to get US a better deal. We must begin to assert ourselves for prosperity,” he noted.
Meanwhile, Aisuebeogun also lamented that the demise of some Nigerian airlines and the cessation of international routes by Arik, Bellview, Medview, Virgin Nigeria and others have robbed the nation of billions of dollars and foreign exchange as a result of skewed Bilateral Air Services Agreements (BASA) against the country.
He pointed out that the International Air Transport Association (IATA), revealed that international airlines sold tickets worth $1.4 billion to Nigerian travelers in 2017.
That piece of information according to him represents the growing losses that Nigerian airlines are losing to foreign airlines.
The BASA have become uneven with one party seeking to take advantage of the weaker side to have more flights than their counterparts. Not a few have given it different terms ranging from ‘skewed’ to ‘imbalance and one-sided’ among others.
Never has BASA been talked about than in Nigeria where everybody has become an expert in the subject. Government has been taken to the cleaners because of what they describe as its lackadaisical attitude and lack of policy foresight to protect Nigerian carriers that are not only weak to compete but offer little in terms of financial might to compete with the smallest airlines in Europe.
Nigeria presently has 90 BASA pacts with only about 39 of it active. Many of these have been reviewed to create opportunities for domestic carriers, but are largely not utilised