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Friday, 11 October 2019

Getting Nigerians to fly Nigeria

Getting Nigerians to fly Nigeria

With the Fly Nigeria Act, Nigeria seems set to join the rest of the world in rising to the aid of local carriers to curb capital flight, KELVIN OSA OKUNBOR writes

 BANKOLE Bernard, the National Association of Nigeria Travel Agencies (NANTA) President, is worried. Reason: Nigeria stands to lose more revenue repatriated to other countries by airlines.

He said measures must be put in place to force government officials, contractors and others who do business with the government to patronise indigenous carriers.

Across the world, the survival of airlines is increasingly becoming topical. Investors, regulators, governments and other multilateral institutions are routinely evolving measures to save their carriers from death.

Rise in airlines’ collapse is stirring debate among investors and managers to consider options of either merger, acquisition, consolidation or better still, forcing governments to consider a string of measures to protect the operator.

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Countries are enlisting in the global move to design a raft of measures, policies and initiative that will continuously protect their airlines.

Call it protectionism you are not far from the fact. The protectionist move is gaining traction, as countries are now working out instruments to save their airspace from foreign carriers’ domination.

In Nigeria, a coalition is growing to save struggling indigenous carriers from invasion by foreign carriers, which have taken over the market.

Over 30 foreign carriers operate in Nigerian airspace, courtesy of the 75 bilateral and multilateral air services agreements it signed with other countries.

Nigerian Civil Aviation Authority (NCAA) statistics put the total ticket sales of foreign carriers operating into Nigeria at over $3.1 billion.

The statistics stated that $1.4 billion was earned as ticket sales by foreign carriers in 2017, but rose to $1.7 billion in 2018.

The 21 per cent increase in revenue from foreign airlines ticket sales confirmed their dominance in the Nigerian market.

One of the ways to save local airlines, according to Bankole, was through a legislative instrument otherwise known as ‘Fly Nigeria Act’, which was already in place in other countries to drive the agenda of protecting indigenous carriers.

Chairman, House Committee on Aviation, Hon. Nnolim Nnaji, said the lower legislative chambers were set to curb the invasion of foreign carriers into the Nigerian market by urging the government to review the existing  air treaties signed between Nigeria and other countries.

Nnaji said the lower legislative chambers have concluded plans to work with the Senate on how to initiate laws and other measures that will assist indigenous carriers.

According to her, the House was set to review the policies that tend to hinder the growth of domestic carriers, which enabled the dominance of international carriers over the nation’s airspace.

He added that the House will partner the Ministry of Aviation to put together a policy framework for the development of the Nigerian Aviation sector as a major hub for the African continent.

Besides, he said efforts were on for the creation of an enabling environment that will support local airlines in addition to curtail foreign airlines’ domination in the Nigerian Aviation market.

Part of the ways to achieve that he said is the possibility of reviewing the multiple entry designations granted to some international airlines to protect the local industry and ensuring safe and quality service delivery by all agencies and organisations that operate in the industry.

He said:  “Our Aviation industry has great potential, which has over the years been unduly exploited by foreign airlines. My understanding is that several foreign carriers operate multiple flights out of Nigeria daily charging very exorbitant fares without any indigenous operator reciprocating same. These no doubt promote capital flights, unemployment and negatively impact on the economic growth of the nation, which should not be tolerated.”

Industry clamour

The dominance of foreign airlines in the Nigerian airspace is increasingly drawing the ire of stakeholders.

This is coming on the heels of billions of Naira carted away as tickets sales by the foreign carriers operating in the country.

Last year industry experts called on the federal government to introduce the Fly Nigeria Act to support the sector.

This, they noted would make it compulsory that anyone travelling on government expense must fly the local airline or its partners.

The experts under the aegis of Aviation Round Table said if the Fly Nigeria Act is introduced, foreign carriers would be forced to partner with local airlines in terms of code-share and other arrangements that would earn indigenous carriers revenue from such partnership.

Speaking in an interview, President, Aviation Round Table, Dr Gbenga Olowo said: “There is need to sign the Fly Nigeria Act legislation, to help protect the Nigeria travel market for both local airlines and travel agent.”

In the last few months, stakeholders in the aviation industry have relived the imperative of the Fly Nigeria Act to return the local airlines to profitability and saved them from collapse.

The Act has been in the works in the last two decades, and it is mainly to drive sufficient traffic to local carriers.

Specifically, the legislation is to allow Nigerian commercial operators a monopoly on the fares of government related travel in and outside the country.

All civil servants in the country or anyone on government funded air travel will be compelled to fly with the local carriers. The bill, according to an estimate, will generate N500 billion for local airlines.

Speaking further Olowo said: “The Airlines Operators of Nigeria (AON) need to ask themselves if they are making sufficient money in the business to cover the cost. That is why AON should go and put up a bill in respect of the Fly Nigeria Act because it is an indirect way to free business for the airlines and arrest market share.

“Sign the Fly-Nigeria-Act”

Zenith Travels Limited Executive Director Olu Ohunayo said the government must review the Bilateral Air Service Agreement (BASA) in order to create opportunities for Nigerian airlines to compete with their foreign counterparts by introducing Fly Nigeria Act, which would make it compulsory for foreign airlines to partner indigenous carriers and share revenues from ticket sales.

According to him, Fly Nigeria Act would make it compulsory for anyone travelling on government expenses to patronise Nigerian airlines or their partners.

Ohunayo said by so doing, local airlines benefit from revenues earned on ticket sales by international carriers.

He said the government can also back indigenous carriers by supporting them to operate international destinations by playing the inevitable aero politics on their behalf.

He decried the huge amount repatriated out of the country every year by foreign airlines.

Also speaking Managing Director of Overland Airways, Capt. Edward Boyo, agreed that the Fly Nigeria Act initiative was good for the industry, but the local airlines needed more from the environment to make headway.

He said: “The Federal Government sent an executive bill to the National Assembly, a bill called the Fly Nigeria Act. You cannot say because you are the government and not do the appropriate things. Take Julius Berger for instance, they have billions worth of contracts in this country. They have a flying budget for their workers. What percentage of that flying budget goes to the indigenous carrier? That is the only way indigenous carriers can survive. ”

Ministerial Drive

Minister of Aviation Captain Hadi Sirika said government was aggressively pursuing a Fly Nigeria Act, as part of measures to support indigenous carriers.

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