Mixed reactions trail multiple entry points for foreign airlines

Participants at the quarter two-brunch business meeting organised by Aviation Safety Round Table Initiative (ASRTI) in Lagos have agreed that in order to protect the interest of Nigeria and its airlines, there is a need to review the Nigeria’s existing Bilateral Air Service Agreements (BASAs) and enforce the reciprocity principle in international agreement.

The theme of the Aviation Safety Round Table Initiative is Aviation Reset: Agenda for the New Dispensation (Increasing the Numbers).

It was also agreed that Foreign airlines’ designated to fly into the country should be restricted to either Lagos or Abuja and a secondary entry point with the call for the present multiple entry points to the foreign airlines to be discontinued to enhance the drive towards regional hub creation.

This is just as the government has been tasked to ensure the foreign airlines timely repatriation of their ticket proceeds to their home countries to force them to reintroduce their inventory fares they had earlier suspended which led to the sharp increase in fares.

Reacting to the call for the restriction of foreign airlines to one or two points in the country, the Chief Executive Officer of Aero Capital Partner, Sindy Forster however, argued that restricting the foreign airlines to one major airport in the country would have an adverse effect on the flying public.

Citing the example of United Kingdom where there are many functional airports many foreign airlines fly to, Sindy explained that some of the foreign airlines preferred to fly into Manchester, Bristol, Edinburgh and other regional airports as well, apart from Heathrow International Airport.

While canvassing for the liberation of the sector by the Nigerian Government and maintaining that this will drive growth and eventually reduce the cost of airfares, Sindy explained that it is customer’s demands that will determine airports airlines want to fly into, stressing that the restriction of foreign airlines would also impact negatively on domestic movement.

“We have already seen the lower impact on passenger numbers for domestic airlines when international flights were restricted. Does Nigeria want to grow passenger numbers for domestic airlines? Or does it want to do what it does best and restrict the life out of every industry?

“Liberalisation has been the driving force of aviation growth all over the world. Yet Nigeria is saying it is liberalised, but it is still one of the most difficult places in the world with restrictions upon restrictions. Do you know the cost of international flights would come down if you genuinely liberalise and allow more flights? Look at open-air agreement territories and see the impact. Nigeria will restrict itself into stagnation if it is not careful.”

For the Chief Operating Officer of Ibom Air, George Uriesi, Nigeria had not been tactful with the liberalization of its airspace to foreign airlines over the years, hence describing the multiple entry points granted foreign carriers as primary the cannibaliser of domestic traffic with major negative consequences on the growth of domestic airlines. He arguing that if domestic carriers could not become stable and successful at home first, their growth level would be stunted, while competitiveness would also be eroded.

“More than this, allowing flights to be operated all over the place by international airlines, let us get away with sub-optimal infrastructure that does not support hubbing. So, it’s a lose-lose for the country. Do the domestic airlines have their blame for stunted growth? Yes. But have they been enabled to grow? No.

“What enabled Johannesburg (South Africa) to grow into the continent’s major hub at a time was a strategic decision to restrict international to domestic and international to international transfer traffic into South Africa to Johannesburg only. The flights that were allowed into Cape Town and Durban had to be Origin and Destination (O&D) traffic only. No single ticket connections. Johannesburg, despite its far southern position grew to become the continent’s number one airport, at its peak reaching 23 million passengers, until Ethiopian Airline’s smart strategy turned Bole International Airport around and began to flog Johannesburg.”

Uriesi made case for purposeful policy formulation and implementation by the government, saying this would aid development in the sector.

Also speaking at the event, a security expert, Group Captain John Ojikutu revealed how Nigeria was losing about $200 million annually to multiple entries by foreign carriers, while the country’s airlines are suffering.

Expressing support for multiple frequencies for the foreign airlines, but opposed multiple destinations for them, Ojikutu explained that any approval above dual designations to foreign airlines exposes the country’s domestic routes and domestic markets to the international airlines.

According to Ojikutu: “I have said it repeatedly that no foreign airlines must be given landing rights to Lagos and Abuja, but to Lagos or Abuja and to any other airport at alternative geographical location and not more than two. However, the airline can fly many times a day to the two airports of its choice. These are great sources of forex revenue earnings for the government from the arising commercial agreements.

“Additional two destinations given to Qatar are not different from what had been given to Ethiopian Airline; both I am against. In the 1990s, when Egypt Air and Middle East Airline were lifting regular West African regional passengers to and from Lagos, it became a war between them and the Nigeria Airways and it was stopped. Who will fight the battle now for the domestic airlines when we do not have a national carrier or designated flag carriers?

“Imagine the number of passengers on the extra frequency flights by these airlines and the earnings from their landing and parking? Commercial agreements, if well-managed, can pay well for the loss in reciprocity.”