…Operators threaten to sue FG
…Insist multiple entries for foreign airlines will kill local operators
…As FG defends approval for revenue generation
By Moses Adeniyi
Crisis in Nigeria’s aviation sector has further heightened as Domestic Airlines have threatened to sue the Federal Government over dissatisfaction on multiple entries into Nigeria granted by the Government to foreign airlines operating in the Country.
The operators have lamented the phenomenon, if left unchecked would strangulate domestic operators, thrusting them out of market, while foreign airlines take over.
Stakeholders under the Airline Operators of Nigeria (AON) who gathered on Thursday in an engagement, agreed the body was fully resolute to engage the Federal Government in a legal battle, should the current policy on multiple entries granted to foreign airlines be left unaddressed.
The body however, mentioned it would explore engagement with the Government before embarking on the action, disclosing talks would commence in the next few days with the Minister of Aviation, Sen. Hadi Sirika, to deliberate on the issue.
The body lamented that against the scarcity of foreign exchange in the Country, foreign airlines are allowed to remove billions of dollars every year from the Country.
Speaking at the first quarter (Q1) 2022 Breakfast Business Meeting organised by the Aviation Round Table (ART) in Lagos with the theme: “Economic Implications of Multiple Entry Points by Foreign Airlines Into Nigeria,” the President, AON, Alhaji Yunusa Abdulmunaf decried that billions of naira are being lost annually to multiple designations granted to the foreign carriers, warning that “if the policy continued unabated the domestic airlines would die, while the foreign airlines would eventually take over the domestic market.”
The body has decided to challenge the government in a court of law if the current policy on multiple entries to airlines is not addressed, the AON President, who was represented at the occasion by the Vice President, Mr Allen Onyema said.
He questioned why foreign airlines which have not been able to employ more than 150,000 Nigerians should be given such multiple entries, while domestic airlines with more employment capacities would have “to beg to be given rights to build a hangar in its own country,” and “has no land in its own country,” “no land for its assets and passengers.”
“All the foreign airlines that come into Nigeria, every day, the Central Bank Govenor cries about the amount of money being repatriated abroad. 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, and airlines in Nigerians have been hassled with lots of requests on how to repatriate dollars into the system. Where am I going to get it from?” he questioned.
“Yet we are creating more avenues for these things to happen by giving multiple destinations to these foreign airlines.
“All the foreign airlines that come to this country, maybe about 20 or 30 of them have not been able to employ more than 150,000 Nigerians.
“We keep on badmouthing Nigerian airlines, forgetting that we are the architects of our own undoing. Air Peace alone employs over 4,000 people directly.
“It would take foreign airlines another 60 years to generate 4,000 jobs. Yet Air Peace has to beg to be given rights to build a hangar in its own country, it has no land in its own country. No land for its assets and passengers. It didn’t start today,” he decried.
This is just as the President of ART, Dr Gabriel Olowo, in his comments, decried the domestic sector being eroded through multiple entries of foreign airlines into Nigeria.
According to him, the phenomenon has left foreign airlines gradually taking over the domestic market with continuous approvals for multiple entries for foreign airlines.
“The damages of multiple entries into Nigeria are huge. Britain for instance has 21 flights into Nigeria weekly. European Union has 43 frequencies every week in Nigeria. Also, the Middle East has 56 flights weekly into multiple entries into Nigeria.
“As it is today, we have zero participation in the international sector as an industry and the domestic sector is eroded through multiple entries into Nigeria,” Olowo decried.
Among other issues of concern, the debate over foreign entries has recently become a subject of tough discourse in the Aviation sector – a subject that has formed a dissatisfaction among domestic airline operators.
The body however believes the government would address the issue in the next 21 days, adding, however, that the body was not giving the government an ultimatum.
…FG defends approval, says it would generate revenue for Nigeria
Meanwhile, the Federal Government has defended the policy of multiple entry points it granted to foreign airlines, arguing it will generate revenue for the Country.
The Minister of Aviation, Sen. Hadi Sirika, on Thursday during the 1st Quarter Aviation Safety Round Table Initiative (ASRTI) Business Breakfast Meeting said these entries will help domestic airlines to improve their distribution and connection opportunities.
Sirika, represented by Group Capt. John Ojikutu, the Chief Executive Officer, Centurion Aviation Security and Safety Consult, argued that though granting of multiple entries points to foreign airlines into the Country has been an issue of contention in the industry, yet granting of multiple designations also opens up prospects to domestic airlines, adding that it also improves their market by distributing passengers for connection.
“Multiple entry points are granted to foreign airlines based on the nature of their Bilateral Aviation Safety Agreements (BASAs).
“This will expand the business and grow the economy of foreign airlines. The idea was to generate revenue for the country.
“Foreign airlines are able to land at different airports connecting different area of the country to foreign countries, thereby promoting commercial trade, tourism and friendly relations,” he said.
Sirika who reeled out some obvious disadvantages of the policy, still maintained there were advantages to gain, positing that granting of entry into more than two airports could expose foreign airlines to domestic routes.
According to him, it would therefore affect the domestic markets of the domestic airlines and this had its negative implications.
He further argued multiple entries is also against the Carbotage Act, which does not allow the airlines to generate much-needed revenue that will help in their growth.
The Minister however, said domestic airlines stand to gain from opportunities created by International airlines distributing passengers for connection with these airlines.
“Nevertheless, there are prospects for domestic airlines as they have opportunities for improved domestic markets by distributing International passengers for connection with these airlines.
“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.
“This is in addition to any other airports outside the geographical area of the first choice of Lagos and Abuja, e.g Port Harcourt, Kano and Enugu.
“In this way, they do not take over all the businesses on all the International Airports,” he argued.
Crises
Nigeria’s aviation sector has recently been ridden with crises and grievances threatening operations, particularly by domestic airlines.
Mid-March, Monday, March 14, airline operators had issued a 72-hour ultimatum to shut down operation over rising cost of aviation fuel.
They had declared that should the Federal Government refuse to intervene in the cost of aviation fuel, they would withdraw their services in 72 hours.
Lamenting some of the crises, the Vice President, AON, Chief Allen Onyeama, had in the resumed meeting with oil marketers, the regulators, and the House of Representatives leadership on Monday 14th March, 2022 decried: “I have the mandate of every airline in this country to announce to you that if they cannot come down from their rooftop, we have only three more days to be able to fly. We are not threatening this country. We have been subsidising what we are doing.
“I will give you the rate as of today, (at) N630, N640, N650 (per litre). We have an aircraft going to Kano that has about 7,000 litres of fuel on it. Multiply it by 630. The unit cost per seat already is about N70,000 per seat. You have not talked about the insurance that is very static and Nigerians pay a lot of insurance premiums because this country is stigmatised.
“You have to insure in London and other places abroad. It is a loss. All the insurance companies in Nigeria put together cannot even insure one aircraft.
“So, you have to go abroad to insure and they slam us with heavy premiums. What we use in insuring one plane is what the legacy airlines of this world use in insuring about three planes. So, the Nigerian airline is dead on arrival.
“Yet, the fuel cost which was supposed to be about 30 to 40 per cent (of operational costs) in every other clime in the world, in Nigeria it is about 70 per cent even before this time (of scarcity). So, you can now see the mortality rate of airlines in this country and the causes.
“They have refused to answer your simple question whether you got money from the CBN or from the black market. How much is the unit cost of your acquisition so that we know if the airlines are cheating you or you are cheating the airlines, or if you have formed a cartel to increase your prices overnight?
“From what is happening, if we continue this way, the least ticket you will expect from airlines will be about N120,000 for Economy (Class). And we don’t want to do that because it will not help the ordinary man.
“I have the mandate of airways to inform the House that we are now demanding that we should be given a license to import this fuel. If we can buy jets that cost about $80m, we can afford to import this fuel.”