BASA And Aviation Economic Woes In Nigeria

By Kenneth Jukpor

Amid growing concerns of foreigners dominating business opportunities that should dissipate the high level unemployment and economic hardships in Nigeria, multiple entry points granted to foreign airlines based on the nature of their Bilateral Aviation Safety Agreements (BASAs) has become an additional fiscal problem in the nation.

Whilst the agreement is the global best practice as it enables free movement of commercial flights among the countries involved, it appears to be stifling the growth of indigenous airline operations which have been grossly affected since the COVID-19 pandemic lockdowns in 2020.

In October 2020, the Nigerian government signed one of the recent BASA deals with each of the United States, India, Morocco and Rwanda. Airlines from all four countries operate in Nigeria, and the Nigerian Flag carrier, Air Peace, was designated to reciprocate on both the American and Indian routes.

The problem, however, is that Nigerian carriers are too little to compete from this treaty whilst other nations fly passengers and cargoes to various locations in the country enjoying economies of scale and the huge freight from air travel business.

Meanwhile, there are also concerns that Nigeria has signed numerous BASAs in the past, with few nations reciprocating.

In a bid to solve this problem, the Aviation Safety Roundtable Initiative (ART) slated its first quarter Business Breakfast Meeting, to address “Economic Implications of Multiple Entry Points by Foreign Airlines into Nigeria”.

At the summit, Airline Operators of Nigeria (AON) threatened to sue the federal government over multiple entry points granted to foreign airlines.

The airlines disagreed with Nigeria’s Minister of Aviation, Hadi Sirika over the loss of multiple entry points being doled out to foreign airlines with reckless abandon.

According to them, giving foreign airlines the right to fly into several locations in Nigeria could hurt the revenue of domestic airlines which would suffer undue competition from their foreign counterparts.

Speaking on behalf of Nigerian airline operators at the meeting in Lagos last week, the Chief Executive Officer of Air Peace and Vice President of the Airline Operators of Nigeria (AON), Mr. Allen Onyema, described the idea as a form of slavery that should be speedily abolished.

Onyema, who represented the AON President, Mr. Yunusa Abdulmunaf, said the indigenous airline operators may sue the federal government over multiple entry points granted to foreign airlines.

While stating that the body would meet with the aviation minister to deliberate on the issue, he posited that if the policy is sustained, foreign airlines would eventually take over the domestic market.

“We are talking about the scarcity of foreign exchange in the country, but the foreign airlines are removing billions of dollars every year from this country,” the AON boss said.

Contrarily, the Minister of Aviation, Senator Hadi Sirika opined that there was nothing wrong with the BASAs, even though he admitted that the matter had become a bone of contention in the nation’s aviation industry.

While thanking the organizers of the summit for choosing an apt topic, Sirika said that although the multiple entries granted to foreign airlines were good for the economy, the development was putting pressure on the country’s foreign exchange.

The Aviation Minister, in his speech, delivered by Group Capt. John Ojikutu, argued that there are prospects for domestic airlines as they have opportunities for improved domestic markets by distributing international passengers for connection with these airlines.

His words: “The grant of entry points to foreign airlines should also be such that they are given multiple entries, to either Lagos or Abuja and not Lagos and Abuja, in addition, to any other airport outside the geographical area of the 1″ choice of Lagos and Abuja e.g; Port Harcourt, Kano and Enugu. In this way they do not take over all the businesses at all the international airports.”

Sirika stressed that although most of the nation’s domestic airlines operate within Nigeria, the capable ones could operate along with a national carrier to exploit the air travel market in other nations, adding that domestic airlines are made up of healthy and growing airlines.

“Multiple entry points are granted to foreign airlines based on the nature of their BASAs. It expands the business and grows the economy of foreign airlines. It also generates revenue for the country as foreign airlines are able to land at different airports connecting different areas of the country to foreign countries thereby promoting commercial trade, tourism and friendly relations,” he said.

He identified negative implications of BASAs to include; contravening the Cabotage Act, reducing airlines revenue generation thereby limiting their growth, increasing pressure on demand for forex to repatriate funds and create capital flight from Nigeria.

Sirika, however, assured that the Ministry would partner industry operators and stakeholders to build a viable aviation industry in Nigeria and improve the growth of the aviation sector.

Also speaking at the summit, a retired Pilot and a Former Director of Operations of the Defunct Nigerian Airways, Capt. Prekeme Porbeni stressed that the Aviation Ministry’s job shouldn’t stop at signing BASAs even as he encouraged civil servants to be more concerned with activities that may stunt the growth of air travel business in the country.

He argued that the stakeholders in the sector should be willing to discuss issues extensively to arrive at submissions that prioritize the collective good of the sector.

“Government has no business in business. Nigerian airlines must be able to make money out of the agreements and treaties that the nation enters. We shouldn’t allow foreign airlines land everywhere while Nigerian businesses suffer. There must be a commercial agreement.” Porbeni said.

Meanwhile, he charged public servants in the sector to discharge their duties diligently and patriotically as people called to serve.

On her part, the President of National Association of Nigerian Travel Agencies (NANTA), Mrs. Susan Akporiaye, suggested that indigenous airlines could partner with their foreign counterparts to operate their domestic travel services within Nigeria.

She drew an analogy to the existing relationship between foreign airlines and their representatives as local travel agencies in Nigeria, noting that indigenous airlines could strike similar partnerships.

“International airlines would rather partner with local airlines as they do with local air travel agents. The foreign airlines are happy to hand-over the business to travel agents rather than spend hugely on rent, hire staff and other operational costs. It’s a win-win situation with local travel agents making money while the foreign operators ease the burden of additional costs,” Susan said.

Noting that British Airways use travel agents at Lagos and Abuja, she noted that BASAs could provide an opportunity for similar partnerships as General Sales Agents (GSA).

According to her, it will make more economic sense for foreign airlines to collaborate with indigenous operators than travel to various locations in-country to discharge passengers.

The effects of BASAs on the nation’s aviation sector and the fallout from this decision was exhaustively discussed at the summit, even as industry veterans put forward many good suggestions about how to proceed, define and prioritize national interest and guide future BASA/external Aviation relations engagements.