Louis Ibah
Citing growing threats to local investments and Nigerian jobs from foreign firms, stakeholders in Nigeria’s aviation sector are demanding the enactment of a Local Content Law to protect indigenous firms.
The stakeholders also noted the futility of attempting to grow the aviation sector’s contribution to national GDP by successive governments with the bulk of the investments in the hands of foreign interests, saying the industry can only be developed by genuine Nigerian investors.
With recent examples of African countries like Egypt, Kenya, Morocco, South Africa, Rwanda, and Ethiopia evolving home-grown initiatives and policies to unlock and developed their aviation and tourism to global standards, stakeholders in the Nigerian industry believe that similar feats can be achieved in the country if the government comes out with the right regulations.
President of the National Association of Nigeria Travel Agencies (NANTA), Mr. Bankole Bernard, who decried the continuous foreign dominance of the industry told Daily Sun that just as the government through the local content law had stemmed the massive capital flight and job losses that characterised the operations of multinational oil firms in the Nigerian petroleum industry for over four decades, the Nigerian aviation sector can also be leapfrogged with a similar policy.
“We may not have a national carrier for now, but we have a lot of Nigerian businesses and jobs being threatened by foreign firms and something needs to be done to protect these Nigerian investments,” said Bankole.
“We need a local content law in aviation just as it was done in the petroleum industry so that it is made very clear by law that you can only engage the services o foreign firms in situations where there are no competent Nigerian hands,” he added.
Current trend
Without doubt, the Nigerian aviation sector over the years has been mostly foreign interests dominated.
From foreign contractors handling various airport construction projects, to vendors supplying air traffic and navigational facilities, foreign airlines and pilots, insurance and re-insurance and maintenance of aircraft are some of the key jobs handled by by foreign interests in the country.
On the airline business, about 90 per cent of the market share on the international routes are control by foreign airlines. The domestic route business remains largely local due to regulations that forbid foreign airlines from plying domestic routes. But then, the cockpits of most aircraft flown in Nigeria continue to be manned by foreign pilots while about 500 local pilots remain unemployed.
According to a communique issued by participants at the March edition of Aviation Round Table (ART) meeting, there was the need for the Federal Government to take urgent steps to protect indigenous investments if it hopes to increase earnings from the aviation sector and also create more jobs for citizens.
Fly Nigeria Act
The communique signed by the ART President. Mr. Gabriel Olowo specifically demanded for the passage of the ‘Fly-Nigeria-Act’ into law in 2019 to boost the patronage of local airlines.
The Fly-Nigeria Act will also grow the revenue of local airlines, the proposed national carrier, as well as the local travel agencies. With a fly Nigeria Act, government officials will have no option than to fly local carriers, except to destinations where no local airline plies.
“Government through the NCAA has to create an enabling environment for the growth of local business in Nigeria,” said Olowo.
“There is need to sign the Fly-Nigeria-Act legislation into to help protect the Nigeria travel market for both local airlines and travel agents
“A Fly Nigeria Law will halt government spendings on foreign airlines and travel agents and make the patronage of local airlines and agents mandatory,” he added.
In recent months, Arik Air, Overland Airways, Aero Contractors, and Air Peace have announced plans to increase their aircraft fleet in readiness for sub-regional and international flight operations.
According to the Chairman/CEO of Air Peace, Mr. Allen Onyema, the survival of the local airline industry lies on the patronage it receives from citizens.
Onyema who said he supported the call for a local content law in the industry noted that the law will lead to the emergence of skilled Nigerian pilots and aircraft engineers and inspectors.
The Air Peace boss however said such a law should not be enacted and enforced in a manner that safety is compromised.
“We shouldn’t pursue local content and forget about safety which is the major thing in aviation,” he said.
Onyema said he was already making investments in the training of Nigerian pilots and maintenance engineers on the Boeing 777 aircraft which is the latest addition to the airline fleet.
Travel agents
According to Olowo, Nigerian travel agents appear to be the worst hit from the foreign domination of the industry and are at present facing extinction with their booking figures declining yearly since 2014 as most foreign airlines now sell tickets directly to passengers through their foreign agencies.
“Since 2014, ticket booking by Nigerian travel agents year-in-year-out has been declining from 7 per cent to 5 per cent and it has declined from 8.1million to about 3.5million bookings by 2018. This decline simply means Nigerian travel agencies are already seeing extinction and it concerns aviation round table,” Olowo added.
“The Nigerian Civil Aviation Authority as the regulatory agency for air travel business in Nigeria, should go beyond licensing of travel agents and take steps to address the challenges that have in recent years, caused a decline in air bookings and performance of travel agencies in the country,
“The Local Content Law in Nigeria needs to be applied fully in regulatory operations of travel agents so as to preserve the sector for benefits of Nigerian citizens,” the ART boss added.
Corroborating Olowo, the President of NANTA, Mr. Bankole Bernard said foreign travel agents were taking jobs away from Nigerians.
“We now have a new threat to the industry; some foreign airlines are partnering with travel agents in their home countries to issue tickets to nigeria-based travellers and tickets come cheaper than what is sold in Nigeria,” Bernard said.
Bernard explained that the airlines and foreign travel agencies are taking advantage of a new Global Distribution System (GDS) launched by the International Air Transport Association (IATA) which now allows an unhindered sale of tickets to passengers from any part of the country.
But he said a local content law which had been clamoured for in the last six years could have insulated Nigeria from the demerits of the GDP if the policy was implemented.
“This trend is really hurting the local travel agencies and the Nigerian economy. We have a situation where airlines will encourage Nigerians living in Nigeria who are their known clients to use foreign cards to pay for tickets issued by foreign travel agents and all the transactions will take place offshore with the airlines retaining all the monies in their countries and no money passes through any Nigerian bank just as no tax comes to Nigeria,” he added.
Bernard expressed the fear that if the trend is not curbed it could lead to the collapse of many travel agencies and the loss of jobs by Nigerian workers.
“Travel agents are losing accounts and revenues. Selling tickets to Nigerians from offshore and flying those passengers outside from Nigerian airports is rather an exploitative position. It is against the norms. Even FAAN and the NCAA are losing revenue from the five per cent ticket sales tax they get when tickets are purchased in Nigeria,” Bernard said.
“We may not have a local carrier but that does not mean that the government should not take steps to protect the local industry. It was done in the oil and gas industry; it can be done in aviation downstream sector where travel agents operate,” he added.