Stories by Louis Ibah
Worried by the continuous monthly revenue loss of an estimated N9.5 billion to foreign airlines due to various unreciprocated Bilateral Air Service Agreements (BASA), some concerned stakeholders in the industry under the aegis of the Aviation Round Table (ART) are making a fresh demand on the Federal Government to commence action on the establishment of a viable national carrier for the country.
This comes following last week’s announcement by the Federal Government that it had concluded plans to concession two of the nation’s prime airports in Lagos and Abuja to private firms.
The government decision to concession the two airports is borne out of the need to boost the state of their infrastructure to world-class standards, create airport hubs that would attract more traffic, especially within the West African sub-region from the two airports, create jobs for citizens, and yield more revenue for the government.
But some stakeholders are arguing that the proposed concesioning of the airports with the view to establishing hubs ought to run simultaneously with the birth of a new national carrier for Nigeria. The aspiration of creating hubs out of the Abuja and Lagos airports would never be achieved without the presence of one or two viable national carriers.
Globally, airport hubs are built around national or flag carriers.
Nigeria has about 88 BASAs with foreign countries out of which it has not reciprocated up to five. A recent industry data showed that weekly capital flight out of Nigeria as a result of the multiple entries granted foreign airlines amounts to about N2.398 billion while the revenue earned by foreign carriers has risen to about N9.592 billion in four weeks.
For instance, at an average air ticket of N160,000 for a return trip for a 200 capacity aircraft, Ethiopian Airlines with 14 frequencies to five international airports in Nigeria without any reciprocity by a Nigerian airline is earning N760 million per week while airlines with just seven frequencies weekly on the same aircraft type and capacity would be earning about N224 million. Indeed, the collapse of Arik Air early in the year and its subsequent takeover by the Asset Management Corporation of Nigeria (AMCON) also came with the suspension of flight operations to the United States of America, United Kingdom and South Africa. This meant huge losses to the country given that Arik Air, for nearly a decade, was Nigeria’s most visible carrier in the international arena and it assisted greatly in cutting down capital flight linked to the monopoly enjoyed by foreign carriers in the country.
What ART wants
The Aviation Round Table (ART), in a position paper, “Delivering Strong and Reputable National Carrier” and made available to Daily Sun said it had come out to support and suggest ways of establishing a national carrier “in the light of recent disturbing development in our industry and the opaque conceptual issues attached to the national carrier(s).
“We support the establishment of national carriers devoid of government financial input but driven strictly by investors with the government providing the necessary enabling ground and aero-political support environment,” the ART said.
“Our support for this project is hinged on our recognition of the desirability of a national carrier and the observed floundering of our flag carriers on the international routes. These shortcomings are traceable to weak government policies and poor negotiation skills in various agreements.
“Therefore, the proposed national carrier(s) should be granted full compliments of the appropriate status and the independence to be the arrowhead in the implementation of operational issues arising from the BASAs to which Nigeria is a signatory and the carrier must do this unhindered by any concessions or agreements however made,” the ART said.
The ART also demanded that all existing concessions and agreements from which benefits are being derived by any person or corporate bodies capable of impinging on the operations of the proposed national carrier must be terminated at the inception of the national carrier.
It similarly suggested that any outstanding obligations arising from agreements made prior to the emergence of the national carrier must be renegotiated between the national carrier and foreign airlines and that this should be supervised by the Nigerian Civil Aviation Authority (NCAA).
Objective of carrier
The ART also said the corporate objective of the proposed carrier should be the “consistent delivery of excellent and competitive customer services within and outside the country.” It also suggested that the national carrier should adopt global best standards, especially flight schedule integrity and should also enter into alliances with other international airlines.
The ART also said the carrier should be set up in a manner that it will reciprocate all BASAs and reverse negative balance of trade between Nigeria and other countries in the airline industry.
“It is vital that very knowledgeable aviators with cognate experience are selected to midwife the birth of the new national carrier,” the ART said.
“The governing board of directors of the national carrier should be composed of persons with proven track records of success in the aviation industry. And the berthing process should last for a period not less than three years from inception,” it added.
According to the stakeholders, the national carrier should start with a fleet of 10 to15 aircraft and it should be mandated to utilise the proceeds of all allocated frequencies strictly for fleet expansion and capacity building. And this should be monitored for compliance by NCAA.
“Existing operators in the industry should be afforded the opportunity to observe and participate in the proposed national carrier(s) project within stipulated guidelines and transparent process,” the ART said.
A thriving national carrier would not just go a long way in cutting down on the capital flight figures but it would also create hundreds of jobs for Nigerians, especially pilots, aeronautical engineers, cabin crew, travel agents, and others who offer catering and cleaning services on airlines. The benefits of having a national carrier cannot be underestimated. In Africa, the economic benefits derived, especially from the hospitality and tourism industries in Kenya, Ethiopia, Egypt and South Africa, are all linked to their respective airlines.