Nigeria Short Changed by International Carriers Through Lopsided BASA Deals

Since the demise of Nigeria Airways Limited, Nigeria has been consistently shortchanged by other nations through lopsided Bilateral Air Service Agreements and unfavourable commercial agreements, writes Chinedu Eze.

In July 2019 during a conference organised by League of Airports and Aviation Correspondents (LAAC), industry stakeholders called for a review of Bilateral Air Service Agreements (BASA) Nigeria signed with different countries, arguing that those agreements are tilted against Nigeria’s interest.

The stakeholders urged the federal government to review all the BASA it signed with foreign countries to make them reciprocal and support the growth of the sector.

They also urged government to quickly stem the unfavourable condition in which 100 per cent of international flight services are handled by foreign carriers, remarking that it stifles attempts by Nigerian airlines to reciprocate by flying to their own routes.

Some stakeholders have argued that the royalties paid by foreign airlines for frequencies are not commensurate with the huge revenues they make from Nigeria and that if Nigerian carriers also fly to the destinations of these airlines, it would enhance more benefits for Nigeria, adding that foreign carriers should pay Nigeria a percentage of the revenue that accrues for each aircraft seat when Nigerian carrier is not operating the same number of frequencies with the foreign airlines.

This matter has come to the fore following the impasse between Nigeria and United Arab Emirates (UAE) over the designation of Emirates and Air Peace airlines in the Nigeria-Dubai route.

Last week the Director General of the Nigerian Civil Aviation Authority (NCAA), Captain Musa Nuhu explained that Emirates Airlines flight operations to Lagos were suspended, while NCAA allowed the airline to operate once in a week to Abuja.

The Director General further explained that Nigeria took the action in response to the way United Arab Emirates (UAE) treated Nigerian airline, Air Peace, which requested for three flights a week to Sharjah but was given only one flight a week.

Nuhu said that NCAA withdrew the approval to Emirates following the refusal of the General Civil Aviation Authority (GCAA) of UAE to grant equal rights to the sole Nigerian carrier, Air Peace flying to Dubai via Sharjah.

Commendation

Many Nigerians have commended the federal government for the positionit took by standing with Air Peace and insisting that UAE must restore the Nigerian airline’s three flights a week before it would allow Emirates to operate its 21 flights a week to Lagos and Abuja.

On the Nigeria-UAE impasse, the Minister of Aviation, Senator Hadi Sirika gave background to the bilateral relation between the two countriesand explained how the Buhari administration gave the Middle East country 21 frequencies a week.

“We negotiated our BASA with them when we came in as a government and we gave them the requested 21 frequencies, meaning that they will be coming to Nigeria 21 times in a week, or simplified as three times a day, two in Lagos and one in Abuja.

We have no airline that can go 21 times into UAE, so they are taking advantage of us, which is our fault not theirs. But however we have got an airline, a Nigerian airline, which is Air Peace, that applied to get only three out of the 21 frequencies and I approved. So Air Peace wanted to be going into the UAE three times in a week. UAE refused to approve the three frequencies for Air Peace. They insisted on giving them only one frequency and it is in Sharjah. Now we are giving them 21 from our agreement, they ought to give us 21. So what they are supposed to do is to give Air Peace 21 and then it is up to Air Peace to operate all the 21 or operate just three.

“They wrote us a very insulting letter, referring to our meeting, discussions and agreements in accordance with the bilateral air services agreement between the two countries. Part of the letter said, ‘And having looked at our operations, with great pain we are giving Air Peace one slot in Sharjah and that is the best we can do in the circumstance that our airports are full.’ This is very insulting and this is not acceptable by international treaty, convention or agreements. And therefore I directed that they also be given one frequency and into Abuja, beginning from the 12th.”

The Rip Off

Industry stakeholders said that Nigeria is shortchanged by foreign airlines, which operate many frequencies to Nigeria without corresponding flights from Nigeria to the airlines’ territories, arguing that the royalties paid by these airlines to Nigeria for lack of reciprocity is not enough. For example, they posited that if Emirates is given 21 flights a week by the federal government, Nigerian carrier ought to have the same 21 frequencies and if the Nigerian carrier cannot operate the frequencies, it could take the number it wants to operate and sell the rest to Emirates.

The Secretary General of the Aviation Round Table (ART) and former Commandant of the Murtala Muhammed International Airport, Lagos, Group Captain John Ojikutu (retd), told THISDAY that there has been a lot of rip of Nigeria by foreign carriers and blamed the top officials in the Ministry of Aviation who preside over the BASA negotiations and commercial agreements between Nigeria and other countries and their airlines.

“What was the sense in the BASAs that give benefits to one side and none to the other side of the divide? What are Nigeria’s benefits from 14 or 21 frequencies to Emirates in 10 years? What has been the Nigeria benefit from 14/21 frequencies to UK (British Airways and Virgin Atlantic Airways in 14/21 years? What have been the benefit from over almost the same numbers of frequencies to Ethiopian Airlines in the last 14 years? We’ve gone ways too long in selling our birthright to these countries that; like a prodigal son, we are returning home; I hope we will confess to Nigerians how we got this far and be repentant of the sins we have committed with these foreign airlines,” Ojikutu said.

He said that when the defunct Nigeria Airways existed it had seven flights a week to London and BA also had seven flights a week to Lagos and while BA was using Boeing 747, Nigeria Airways was using DC 10 aircraft and the difference in passenger seats was compensated.

In order words, BASA agreement drawn during that time benefitted Nigeria, but now BASA negotiations are at the detriment of the country, which does not have airlines that operate major international destinationsand Nigeria is not getting due recompense from the foreign airlines operating to the country.

“Trade and foreign affairs have turned to commercial agreements that are now signed only by Aviation Ministry officials into multiple frequencies and destinations. It has not occurred to many that this is where the problems of today is, especially using COVID- 19 as the reason for the recklessness of the past,” Ojikutu said.

Slot Allocation

Industry consultant and CEO of BeluJane Konsult, Chris Aligbe, expressed sadness that in dealing with Nigeria, UAE has used COVID-19, which is a global tragedy to play aero politics to enlarge its market share in Nigeria by not allowing competition and attempting to crowd out every other airline.

In an interview with Arise TV, Aligbe said the principle of reciprocity is absolute in diplomatic relations between two countries and also in BASA. He said that what Nigeria has done in insisting that UAE restored Air Peace its three weekly flights was right.

Reacting to slot allocation, which some stakeholders said it is what some countries use to play aero politics and eliminate their competitors in their own market, Aligbe said slot has become an instrument for market dominance or crowding out other airlines.

Allocation of slots between air carriers (‘slot allocation’) is a planning tool. Its purpose is to ensure, where airport capacity is scarce, that available landing and takeoff slots are used efficiently and distributed in a neutral, non-discriminatory and transparent way.

“Today we have taken a decision to protect a Nigerian carrier. Air Peace is a private airline but Air Peace is a citizen of Nigeria and should be protected and so this is the level playing field. Protect a national flag carrier, if you have one; protect a private flag carrier and that is the right thing to do,” he said.

Aligbe recalled that Nigeria began to have problems with BASA since the demise of Nigerian Airways, but said henceforth when Nigeria is entering into BASA relationship it must be clear and we must be specific in terms of airport of operation. We must now state in our BASA whatever agreement we are reaching and we should be able to review the agreement.

“If you don’t give slots to our airline to your flagship airports, which may be what has been missing in the agreements we had before but now we have to adopt a different approach to our BASA agreements,” he said.

The impasse between Nigeria and UAE has given rise to a collective request from aviation stakeholders that BASA should be reviewed and that every necessary detail must be recognised and agreed on and these include the size and type of aircraft, the airports that would be operated in and slot allocation that must be reciprocal.

Also during Arise TV interview, the Chairman of the Board, Nelike Capital, Dr Alex Nwuba said that Nigeria has to address the issue of slots.
“We have to address the issue of slots. We really have to look at how we negotiate these agreements. We have the ability to demand that we be granted the permission to commence the same number of frequencies,” he said.

He said that with 21 flights a week, Emirates was airlifting about 450, 000 passengers a year and making about half a billion dollars on the Nigerian route, so there is no comparison with what Nigerian carrier is getting.

“It starts with the kind of agreement we signed. We have flawed bilateral agreements, which has led to the disadvantage of our economy. We have to rework these agreements. We have to go back to the bargaining table to review the frequencies and the slots,” Nwuba said.

Negative Balancing

Speaking in the same vain, the President of Aviation Round Table (ART) and also the President of Sabre West Africa, Dr Gbenga Olowo, while reacting to the impasse between Nigeria and UAE, said that Nigerian government has made many Nigerians proud by the approach it has taken to deal with the flight operations between Air Peace and Emirates.

“I am indeed very elated to read the current decision by government through the Director General, Capt. Musa Nuhu that our long time agitation on schedule reciprocity to Nigeria is finally being addressed.

Emirate (EK) was granted only one weekly frequency and to only one entry point (ABV) on Thursdays in its winter schedule. Emirates had before now operated 21 weekly frequencies to two entry points (LOS and ABV) whereas Nigerian carrier, Air Peace wanted three frequencies to Sharjah and was granted only one weekly frequency reported. “The action of the DG here is highly commendable and confirms his professionalism and love for Nigeria to emancipate and address the negative balance of trade between reciprocating countries participating in Nigeria’s BASA.

“ART hopes and persuades that correction of these anomalies will not be treated in isolation but applied to all the foreign operations into Nigeria. Reciprocity on number of frequencies and choice of entry points,” Olowo said.