By Chinelo Obogo, [email protected] 07064781119
The recent diplomatic row between the United Arab Emirates (UAE) and Nigeria over the withdrawal of approval of flight frequencies for Emirates airline and the refusal of the Middle East country to grant Air Peace reciprocal slots, has exposed Nigeria’s flawed Bilateral Aviation Safety Agreements (BASA).
BASA is an agreement which facilitates technical assessment process of two signatory countries and through these activities, the agreement reduces the economic burdens on airlines and aviation industries. But over the years, it is becoming obvious that BASAs signed between Nigeria and the governments of other countries have left domestic airlines bearing the brunt. This explains why aviation experts are calling for a renegotiation of Nigeria’s BASAs to give domestic airlines the same competitive advantage as their foreign counterparts.
The diplomatic row
Over the last eight months, the governments of Nigeria and UAE have been engulfed in a tit-for-tat over COVID-19 regulations. Even after Nigeria lifted its pandemic restrictions, the UAE authorities imposed more stringent travel guidelines which at variance with the FG’s guidelines.
It was against that backdrop that the Minister of Aviation, Hadi Sirika, opted to impose restrictions on Emirates airline from flying into Nigeria. But the restrictions were lifted after eight months with Air Peace resuming its scheduled flight to Sharjah, while Emirates resumed flying in and out of Nigeria.
But just recently, the Nigerian Civil Aviation Authority (NCAA) withdrew the approval for 20 out of the 21 frequencies granted Emirates Airlines by the Ministry of Aviation following the refusal of the General Civil Aviation Authority (GCAA) of the UAE to grant equal rights to Air Peace fly to Dubai via Sharjah. The withdrawal of approval took effect on December 12, 2021. Defending Nigerian regulator’s action, Sirika, in a leaked audio, said the Federal Government granted Emirates Airlines approval for 21 flights weekly, 14 into Lagos and seven into Abuja.
But the UAE had refused to grant Nigeria’s Air Peace three weekly frequencies to Sharjah, which the airline requested for, rather, it approved only one flight weekly for the Nigeria carrier.
He said the GCAA had attributed its refusal to grant three frequencies to Air Peace to inadequate slots in Sharjah airport, stressing that although both countries are losing revenue as a result of the row, the Nigerian government would continue to protect businesses within the economy. Even though the UAE had to backtrack and has offered Air Peace seven slots to operate at the Dubai airports, experts warn that before the airline goes into any agreement, the trade imbalance between both countries has to be reviewed.
Trade imbalance
President, Aircraft Owners and Pilots Association of Nigeria and former CEO of Associated Airlines, Alex Nwuba, in an interview on Arise News said there is a huge trade imbalance as a result of the BASA between the UAE and Nigeria and if the agreement is not renegotiated, the country will remain at a disadvantageous position.
Nwuba said it is very important to point out that there is a difference between frequencies and slots. He said it is unfortunate that Nigeria doesn’t operate slot systems unlike countries like the UAE and Britain which operate both frequencies and slots systems. Because Nigeria doesn’t have slot systems, it is already disadvantaged while going into any bilateral agreement with a country that operates both frequencies and slot systems.
“Nigeria negotiates bilateral air service agreements with various countries and we make these agreements that say we can come to your country many times and we can come to your country many times and that forms the basis of the way that airlines operate on the international scene. The agreement we had with the UAE was done on the basis that we didn’t have a carrier to operate in that market. If you do the analysis and you come to the conclusion that 24 flights are viable between both countries, people who know what they are doing will typically say, you take 12 and I take 12 regardless of whether I have the planes to fly them and what would happen is that you fly your 12 and I would trade my 12 to you, so that you pay me a fee to use my 12. But what we did was that we gave away 21 and decided to keep three.
“We used the words ‘slots’ very liberally but we agreed on are frequencies. So you can come 21 times and I can go 21 times but when I actually want to fly, I would have to apply to the airport that I would be flying to. Initially, Air Peace applied to fly to Dubai airport but they were denied by the UAE and were given the right to fly Shahjar which they did for some time and then during covid, they suspended those flights. But the UAE said they were to give them three flights but could only accommodate one because of something called ‘slots’. The airport said they couldn’t accommodate Air Peace but could only allow one flight, so that is where the discrepancies come in. We are authorised to come many times but the airport also has the right to determine how many flights it can carry. It is on the basis of that capacity that they made the decision that Air Peace can come once. Twenty-one flights a week, which is three flights a day, multiplied by 365 days carries about 450,000 passengers and at the typical fare, we are talking about half a billion dollar trade to the UAE. One flight is only three to four hundred passengers, so when you multiply that, you see that we are disadvantaged based on the economics of scale.
“The problem started at the initial stage at the type of agreement that we signed. We have a flawed bilateral agreement which has led to the oppourtunity for a disadvantage to our economy and so we have to rework those agreements, go back to the bargaining table. We have to issues; one is frequency, which is government to government and the other is slots which is what the airports are able to support. Nigeria does not operate a slot system, so, obviously, if you get your slot system, you can fly as many times as you want. The UK and the UAE has a slot system, so this is where that imbalance occurs.
“The BASA with the UK says that three airlines can fly into Nigeria and the three airlines can fly from Nigeria to the UK as well. But which domestic airline has applied to fly to the UK? When you do agree to fly, there are also tricks in the business people need to be aware of and that is the problem with negotiations. If we agree that three airlines each from both countries can fly in and we don’t address the important issue of slots, if the UK says they have not restricted us from coming, the airport will trip us up. Nigerian airports are owned by the government but the UK airports are typically privately owned, so if you decide to fly to the UK and a private airport says they can’t accommodate you then you have a problem. So we really need to look at how we negotiate these agreements.
“Even when the British grants us slots, they are also very clever. When I ran the national carrier of the Republic of Benin, we got permission to fly to Paris. Air France was flying that route and we were also flying that route and when you land, there are police men, immigration officers, and police dogs checking you and following you all over the place. When you see the way that you are treated, you will prefer to join Air France rather than go through that harassment. So there are many mechanisms that these governments use to protect their national or flag carriers even when you get the frequencies and slots arrangement right.
“Nigerian Airways used to fly to Dubai and at the time, it was a larger airline that Emirates. Over time we have degraded our capabilities based on the agreements we have been signing, so we need to go back and look at those agreements again. Agreements are not permanent. If you find that they are not working for you, you change it.
“The next issue is that even if we want to do reciprocity to reciprocity, do we have the capacity? Are also taking measures in Nigeria to support existing airlines to be able to tap into the oppourtunity. Why are we not raising our capacity to take advantage of economic oppourtunities? Nigeria has a mature aviation industry and we should be strengthening the existing airlines to be competitive on the global market instead of floating a national carrier. We can strengthen local airlines is through capital. If the airlines borrow money from banks to support their operations, they are borrowing at double digits, like 18 to 20 percent, whereas European airlines are borrowing at two or three percent interest rate,” Nwuba said.
Unanswered questions
Aviation security expert, John Ojikutu, told Daily Sun that there are so many questions that the government needs to answer as to why the frequencies for foreign airlines were increased over the years from seven to 21 without any commensurate frequencies for local airlines.
“For over 20 years, the BASA has been one sided in favour of the foreign airlines; the questions are who raised the frequencies from original seven to some airlines to 21 and 14 to others? What has happened to the earnings of royalties on the BASAs and the commercial agreements of over 20 years? Moreover what is the official plan for foreign airlines to repatriate their tickets sales earnings back to their countries and in what currency do the foreign airlines pay the Nigeria aviation services providers? Do our own airlines repatriate their foreign earnings to the country in the same manner that the foreign airlines do? In the attempt to answer these questions and many more we shall come to know where the problems between us and the countries we are at war are,” he said.
How foreign governments stifle competition
Another aviation expert, Chris Aligbe told a radio station in an interview that UAE has unfortunately weaponised a global pandemic and used it as an instrument for aero politics just to maximise its market share and in doing that, it is not allowing for competition.
He also advocated for a review of the BASA not just with the UAE but with other countries where the agreements are not favourable to local airlines.
“ If you look at what is happening, this is the third time that we have disruptions arising from the COVID-19 protocol that they put in place. What has happened over time is that the UAE has unfortunately weaponised a global tragedy and used it as an instrument for aero politics just to maximise its market share and in doing that, it is not allowing for competition. Nigeria is a major market for Emirates because Dubai is a major route and Emirates is a legacy airline but why is it trying to prod out other smaller airlines?
“Nigeria has a BASA with the UAE that allows 21 frequencies on both sides. Emirates has 14 weekly frequencies from Lagos while it has seven from Abuja, it is flying to our two major airports but a Nigerian operator, Air Peace, was initially given only three which undermines the BASA. The BASA signed was done not only by the Ministry of Aviation but by the President and that agreement is deposited with ICAO and IATA and should be respected. But what Emirates is doing is weaponising the global tragedy of covid and using it to undermine the BASA agreement.
“It started by saying that Nigerians must take the antigen test, then they wrote to Air Peace saying that they can only give it one frequency despite the fact that Air Peace asked for three frequencies out of 21. This is what the UAE doing and for the first time, the Nigerian government is giving an appropriate response. What they have done is the standard thing that should be done, which is the principle of absolute reciprocity and that is what happens in the aviation industry in relationship between nations. We have a Minister of Aviation and a President who cannot be pushed around.
“This happened to Arik when the British government said that for Arik to fly more frequencies into Heathrow, it had to pay a hefty amount of money that made it impossible for Arik to operate. When the former Minister of Aviation, Stella Oduah, decided to take action against British Airways, the entire British diplomatic strength was used to make sure that it didn’t happen. The British Prime Minister had to call former President Goodluck Jonathan and that was how Jonathan told Oduah to back off. What the Aviation Ministry has done is the right thing to do. We should applaud our country because in the past, it couldn’t happen because of the pressure brought on our then President,” Aligbe said.