Again, Aviation Experts Raise Concern over Open Sky Lopsided Agreement, Insist Its Unprofitable

Chinedu Eze

Aviation experts are worried that Nigeria has barely benefitted from the Open Sky and multilateral agreements it signed with many countries, which enabled airlines to operate into Nigeria, blaming the situation on the failure of the Nigerian government to adopt reciprocal policies before going into those deals.

From the foreign airlines revenues trapped in Nigeria, which were liquidated by the Tinubu administration earlier in the year, it is indicative that international airlines generate over $4 billion annually from Nigeria, but Nigerian carriers earn less than one per cent of that sum in their international operations.

This is the view of aviation experts, who said Nigeria is an open market for international operators where they earn one of the highest revenues per passenger.

According to the US Department of State, the US-Nigeria Air Transport Agreement, which has been provisionally applied since 2000, entered into force on May 13, 2024. This bilateral agreement establishes a modern civil aviation relationship with Nigeria consistent with US Open Skies international aviation policy and with commitments to high standards of aviation safety and security. The agreement includes provisions that allow for unrestricted capacity and frequency of services, open route rights, a liberal charter regime, and open code-sharing opportunities.

“This agreement with Nigeria is a step forward in liberalizing the international civil aviation sector in Africa and further expands our strong economic and commercial partnership, promotes people-to-people ties, and creates new opportunities for airlines, travel companies, and customers. With this agreement, air carriers can provide more affordable, convenient, and efficient air services to travelers and shippers, which in turn promotes tourism and commerce,” US Department of State wrote on its website.

Nigerian airlines were supposed to reciprocate by flying to US destinations; just as US Delta Air Lines and United Airlines fly to Nigeria. Airlines from the two countries are free to have a code-share, which Delta and Virgin Nigeria Airways had before the later went under. But since 2017, no Nigerian carrier has operated schedule commercial flight to US, which led the US Federal Aviation Administration to suspend Nigeria’s Category 1 Safety Status that enables Nigerian carriers to fly to US.

Many foreign airlines operate multiple destinations in Nigeria, which include Qatar, British Airways, which operate to Lagos and Abuja, Ethiopian Airlines, Turkish Airlines, Rwand Air, Egypt Air and others.

So far, Nigeria has not gained much from the Open Skies agreement it had with US, since Arik Air, which operated Lagos-New York flight service was stopped in 2017 by the Asset Management Corporation of Nigeria (AMCON), which took over the management of the airline under receivership in 2017. Out of 21 airlines that operate international flights from Nigeria, Air Peace is the only indigenous carrier that operates international flight service beyond the sub-region and in 2023, out of over 3 million passengers airlifted to international destinations, Air Peace operated 1, 358 flights and moved 154, 285 passengers.

Experts say that Nigeria airlines are no major players in operating Nigerian international routes; so, open skiesdeals and multilateral deals will not favour Nigeria; unless the federal government becomes intentional in empowering local carriers beyond giving them destination approvals.

Industry stakeholder and Executive Secretary of Aviation Round Table (ART), Olu Ohunayo, told THISDAY that he is yet to see the benefits of open skies agreement Nigeria signed.

He said that when the US wanted to sign open sky agreement with Brazil, Brazil had target goals, which they were yet to accomplish. They refused to sign the agreement with US, until they accomplished those goals, which would enable them benefit from the agreement.

“Everybody must protect his interests. And that is what the Brazilians did. Now, the same Open Sky that the US has been pushing to everybody, China is pushing it to the US now.The US government has refused to sign with China because China would have advantage over the US carriers.

“So, if the Open Sky was for everybody, was beneficial to everybody, then some people would not have been resisting. The initiator would have also signed with China. That is my point. Everybody should push his aeronautical agenda to suit his economy and suit his operations. But we have all signed all these without going through the necessary rudiment. I was shocked when the last one with the United Arab Emirates, because the only way to give us in that message was that we can, Nigerian airlines can go to any airports in the UAE.

“Once they give you that, they are coming for you. They are coming for your meal. To say that they too can come to any airport in Nigeria, they are coming for your meal. Yes, I have seen the code-share signed with some domestic airlines. But let me keep saying, let us wait and see and watch. I feel that Open Sky with UAE was not necessary because of the size of aircraft they use to operate. As a result, we send them to Lagos and Abuja. And whatever they cannot take out of these two cities, they give to other domestic carriers,” he said.

The Managing Director, Flight and Logistics Solutions Limited, Amos Akpan, said that since the open skies agreement was signed between Nigeria and the US was signed in 2010, only Arik Air flew between Nigeria and New York, remarking that the intention of the agreement was for the two countries to benefit from liberalized air travel between each other.

“It was supposed to increase flight frequencies and routes, offer more airline options for passengers, improve connectivity to other markets and boost tourism. But Nigeria has not been able to get airlines to stay competitive on international routes leaving the utilization of Nigeria’s Bilateral Air Service Agreements (BASA), including the open skies, to be dominated by foreign carriers. It appears like there is barrier that says Nigerian airlines cannot grow beyond this. We – all stake holders – have to work to break this apparent but unacceptable barrier. We seem to know what the problems are but we need the will to implement the solutions,” he said.

Akpan recommended actions that should be taken to remedy the situation.

“We need to do the following: support local airlines by enabling them access finance at single digit interest rates over long tenures, grant them tax breaks. Local airlines have to enter into code sharing agreements with foreign carriers. Encourage public private partnerships for airport development with intention to modernize facilities and expand infrastructures – like create one hub airport.

“In summary, I recommend we look inwards by building capacity first so that we become strong enough to compete in the global market. Let’s provide satisfactory domestic air services. Let’s capture the West African air services. Let’s build partnership amongst our airlines and consolidate our hold on our traffic in Nigeria and West Africa. Let us strengthen our regulatory framework. Let us emphasize on corporate governance principles in management of airlines,” Akpan said.

He also urged that the management of Nigerian airlines should pay attention to improved customer services, fleet modernisation, yield management, effective route planning and network development.

“Let us build maintenance capacity for the aircraft in our fleet. My point is that we will expose ourselves to exploitation if we do not build capacity to handle global competition before we enter into such agreements as the Open Sky,” he observed.