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DEFINING A NATIONAL SELF INTEREST-LESSONS FROM A BASA AGREEMENT GONE SOUR

By Tunde Adeniji

The DG NCAA Captain Musa Nuhu recently issued a Press release, conveying the decision of the Honourable Minister of Aviation Sen. Sirika Hadi to replace the operating schedule approval for 21 frequencies/week given to Emirates airlines with 1 weekly Frequency. He had relied on the spirit and letter of the Bilateral Services Agreement (BASA) between the two countries in responding to the single slots weekly offered to Air Peace at Sharjah Airport. The DG’s letter ended with his assurance to members of the public that national interests in all Aviation matters will be jealously protected.

The Aviation Policy and Strategic group discussed the fallout from this decision exhaustively, deconstructing the issues involved, even as its erudite members put forward many good suggestions about how to proceed. The engagements have been rich and enlightening and our intention in contributing to this discourse is to focus on the need to define a National Self Interest in a robust policy framework to guide future BASA/external Aviation relations engagements.

This need is justified based on our experience as a Nation which seems to suggest that we may be haunted yet again by the many decision makers who fell into the trap described below by Jon Moen:

“People who are managing a (financial or economic) crisis are not immune from personal motivations…Sometimes the people in charge don’t know at first that their personal motivations and past experiences might not be compatible with what is best for the greater good.”

We view National Self Interest ‘’As the overriding purpose governing the state’s relationship with the outside world, it serves two purposes. It gives policy a general orientation towards the external environment. More importantly, it serves as the controlling criterion of choice in immediate situations. The dominant view of national interest, in other words, dictates the nature of a state’s long-term effort in foreign policy and governs what it does in a short-term context’’.

The concept of Bilateral Air Services Agreement (BASA) is the outcome of the compromise between the Open Skies advocacy of the US and the strong opposition by the UK and European countries, as a protection from their inability to compete with the formidable dominance of the US in post WW2 world. The delegates at the Chicago convention therefore agreed to a regime that allowed every country complete and exclusive sovereignty over its airspace with the provision that permissions were to be negotiated between contracting states on a bilateral basis. There are at least three different models of BASA, with varying levels of liberality, as may be agreed by the parties to it. We may therefore consider is a contract that should be mutually negotiated like any other

Slots on the other hand ‘’is the most emotive subject in civil aviation. It is the approval from an appropriate authority to take off at a particular time at one airport and land at its destination at another time. The difficulty arises in so called coordinated airports i.e., congested airports where there are severe capacity limits at certain times of the day. It subsequently dictates the difference between operating a route or not’’-D.H. Bunker

The Adam Smith model of Self-interest as the motivator of economic activity with competition as regulator to ensure the market runs efficiently without intervention, is situated below:

“It is not from the benevolence (kindness) of the government (of UAE), Its flag carrier (Emirates), or Airport (Sharjah) that we expect access to Air Peace, but from their regard to their own interest.”

It is important to state at the outset that the self-interest we advocate is (in the words of Lauren Hall) consistent with the demands of justice and becomes the germ from which virtuous, fair behaviour grows, to drive the larger economic engine of society.

In clear economic terms slots represents a barrier to entry and airlines awarded slots benefit from an economic rent. A system established to ensure stability has slowly become the property of the airlines. Slots are sold at a remarkable premium or used as a tool to exert unfair competitive pressures. It has been reported that many European countries who oppose the sale of slots, do so on the principle that, a private firm cannot benefit from a public good (Mackay 2008)

The decision to operate slot system or not remain those of the relevant airport and can be considered “its own internal cuisine‘’ just as ‘’A country’s motivation is its own concern, but the righteousness of its actions is the concern of all’’.

Nigeria like other states deliberately follow certain policies in pursuit of their national interest. The current face off with UAE, shows clearly that we have been a bit too eager to give than to receive or at least gave out before we received.

Our BASA is seemingly driven by the needs and ease of other countries. We have offered multiple entry points to countries, even where our own carriers have faced issues with slots for decades. These incongruities have never been convincingly explained to operators and other stakeholders

We have a unique opportunity to review our thinking and position in this area, especially as our slow adoption of Single African Air Transport Market (SSATM) and African Continental Free Trade Areas (AfCFTA) is totally in sharp contrast to our rush to embrace these dominant international brands

Our policies can start by ensuring that the investment by Nigerian carriers is complimented by access to the best of our facilities as no other country will ever offer them same.

A crisis, they say, is a terrible thing to waste, and so we suggest  that the minimum positive outcome from this saga should be a comprehensive policy paper that will spell out in clear terms, how Nigeria will take actions that will reduce to the barest costs and increase to maximum  benefits its engagements to further our National Aviation Interests.

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FG on NAHCO strike: We’ll no longer tolerate it — aviation is an essential service Hadi Sirika, minister of aviation

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The federal government says it will no longer tolerate strikes and riots in the aviation sector.

On Monday, flights at the Murtala Mohammed International Airport (MMIA), in Lagos state were disrupted due to a strike by Nigerian Aviation Handling Company Plc (NAHCO) staff members over salary increments.

The strike was later suspended after the management of NAHCO said it had commenced negotiations with its workers.

NAHCO provides ground handling (cargo/ramp), passenger, and other services to several international airlines including Air France/KLM, Qatar, Ethiopian Airlines, Delta Airlines, Virgin Atlantic, and Turkish Air.

Speaking with statehouse correspondents at the presidential villa, Abuja, Hadi Sirika, aviation minister, described the action as “wrong, inhuman” and against the law.

Sirika explained that the FAAN act prohibits strikes and riots in the aviation sector.

He apologised to the public and said the government would ensure that the law is enforced to prevent future occurrences.

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“This is very important to the traveling public. First, we apologise to them, our teeming passengers in this difficult moment,” Sirika said.

“Secondly, this will not happen in the future by the grace of God. And the reason is simple; aviation is an essential service, the act has been assented to by Mr. President, so strikes and riots around our airports are prohibited by the laws of the land.

“Now that we have the act in place and assented to by Mr President and passed by the National Assembly, we will deal with it according to the law.

“We will ensure no essential service is being disrupted by anybody no matter how aggrieved. There are other channels of channeling issues when they arise but they are not permitted to go on strike because aviation is an essential service and is the law of the land now.

“I will give you an example, there was an airline that had to return to base because it couldn’t land. Imagine if there was a patient on that aircraft. Imagine somebody attending to a very serious issue or matter at hand or business or a student trying to catch up with an exam and then because of somebody who is aggrieved some other person will die.

“Government will no longer allow that. So it’s in the law of the land, check the FAAN act, it’s been assented to and it’s going to take place soon, in fact now, from today we will not allow that.”

He said the government was always willing to listen to any grievances, adding that there are procedures to address such.

“They should please desist from this. It is wrong, inhuman, and not allowed. It is not permitted and we will not be permitting it any longer,” he said.

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Nigerian Airline Status 2022 – What is next in 2023

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By Prof. Tilmann Gabriel

For the last 70 years, Nigeria is aiming to develop a healthy airline industry, originally as a one national airline construct, as so many other nations, then leaning towards a minority share with reputable airlines, now focusing on a primarily private airline industry, as customary in most economies around the world.

The only successful airlines in Africa are currently all owned by the respective Governments: Ethiopian Airlines, Royal Air Maroc, Egypt Air. Most other national carriers owned by their Governments like Kenya Airlines, South African Airways, Air Mauritius etc are struggling to survive, only possible by significant annual subsidies from the Government. What is the truth then, looking at this airline business, specifically in Africa?

Business is an infinite game, never ending, with new rules and new players all the time, frustrating for executives and employees to remain the number one, never sure if this is sustainable for the years to come. ‘Too big to fail’ is a book that describes the dilemma of executives who have to innovate a huge company to stay abreast with changing rules and aggressive new players. IBM, General Motors, Sears and others are such examples, and airlines like PanAm, TWA, Alitalia were considered too big to fail.

In Nigeria, the largest African nation by people (220 million, going towards 400 million in the next 30 years), all initiatives to launch a sustainable National Carrier were doomed to fail. Nigeria Airways, founded in 1958, was the longest symbol of Nigerian national pride. The author counted some 130 AOC (Air Operator’s Certificate) holders in Nigeria, which went under in those 70 years of Nigerian airline industry, assuming this is a world record. Many of these 130 airlines were only flying for a few years, after spending lots of money (an airline launch costs at least 150M USD today), energy and disappointed hopes. Nigeria Airways was the longest existing airline so far, shut down in 2003, after 45 years in the domestic, regional and international skies.

Key reason for the demise of Nigerian Airways was the involvement of the Nigerian Government, dictating fares, rules, and free tickets for many. No airline can survive such intervention in the revenue creation. Sucking the lifeblood out of an airline, which has critical costs in the US dollar (aircraft leases, fuel, foreign fees), is a sure recipe for failure. Eventually, the then Government was no longer able to substitute such failure. What happened with the next hope of a successful Nigerian airline project, Virgin Nigeria? An agreement for Virgin Nigeria, to use the same terminal for domestic and international operation in Lagos, was no longer honoured by the new Government elected in 2007. Eventually, the 51% Government majority share in Virgin Nigeria was left with the pull-out of Virgin’s 49%, and with it the loss of the international relations and the Virgin supplied aircraft. Successor Air Nigeria was not able to survive without the Virgin assets and expertise.

Why is Ethiopian Airlines successful then as a 100% Government owned airline. Not a short story. Over 70 years it grew mainly organically, slowly and with realistic budgets and expectations. The main difference was that the Management, still led today by the highly regarded Girma Wake as Chairman, was never directed by the Government and by the inevitable changes of Governments in a democracy. Today, Ethiopian is the leading African Airline, with a 20% profit margin and a strategic plan to double its fleet of 130 aircraft by 2035. Vision, strategy, and a highly competent management governed by a Board of experts is the key for success. Disruptive innovations, adjusting to the fast changes in aviation (for example ET’s new cargo focus during the years of Covid), lean cost structures and as a reliable contractual partner with its lenders and aircraft lease companies, have made Ethiopian a valuable African airline, winning awards, and global recognition.

Is this possible in Nigeria as well? The Buhari Government, early on in its 8 years of ruling, agreed on an aviation roadmap with a National Airline, a leasing company, a maintenance company, and an Aviation University as its key components. Under the Minister of Aviation Hadi Sirika, all these roadmap projects are well under way, proof of a successful strategic political direction of this Government of the last eight years. It is important that the next elected Government continues this direction and present a stable aviation industry in Nigeria to the world, based on international aviation laws and supportive political governance.

The Private Public Partnership (PPP) concept which governs all these aviation projects, ensure that it is not the Government and taxpayers’ money, which the success of these aviation companies is based on, but a consortium of industrial investors, carefully selected by the independent Infrastructure Concession Regulatory Commission (ICRC) governed privatisation process. This way the Government has initiated its political strategy to create a profitable aviation industry in Nigeria but sustain from political influence and the reliance on taxpayers’ money.

The African continent is looking into a brighter future, the aviation industry is going to grow rapidly, far behind the rest of the world. Airlines will be a key infrastructure development for the continent, driven by the African Union agenda 2063. African free trade, combined with an open sky for African based airlines is the prerequisite for this development, which shall improve the infrastructure of the continent and contribute well above 5% to the country’s Gross Domestic Product, but also create tenths of thousands of jobs. The Single African Air Transport Market (SAATM) will be the frame for the success of those African airlines which get it right. Serving not only their own country but many of the 54 African nations, as flying between those nations will be enabled by SAATM. It is high time that Nigeria therefore has a strong domestic airline to cope with the SAATM challenges of an Africa wide competition.

The existing airlines in Nigeria are organised in the Airlines of Nigeria (AON), and Nigeria Air, the new National Carrier, has meanwhile applied for its membership as well, becoming a respected party of the common interests of the Nigerian airline industry. Some member airlines objected recently against the Ethiopian shareholding (49%) in Nigeria Air, starting a court case, which will be heard on 16 January at a Lagos court. The Aviation Union called this recently an unpatriotic attack on the interests of Nigerian aviation. At the end, Nigeria Air will be launched, the AOC application is in ‘phase three’ at Nigerian Civil Aviation Authority (NCAA), the launch is very near. The PPP process governed by ICRC is also about to close, with the Federal Executive Council’s approval of the contracts with the investor consortium to be signed shortly. The decision process of selecting the preferred bidder consortium of respectable Nigerian owners and Ethiopian Airlines was completely transparent and managed by the ICRC governed PPP procedures.

Nigeria Air is ready to launch with a fleet of Boeing 737 on domestic services, is currently recruiting many Nigerian aviation professionals to help start the airline operation. The Operations Control Centre at the Abuja Airport is ready to be opened with most modern IT systems. The booking engines on the airline website and App will be available shortly with loyalty credit cards and other innovative pay systems. The immediate goal is to introduce all up-to-date customer service systems to make flying a pleasurable and easy-to-use enjoyment.

Nigeria Air will be a new competitor in the Nigerian market, adding to the existing airlines. As Michael Porter taught us many years ago, the five factors of competition are for all businesses to recognise, amongst them that all competition creates new business for all, as the customer has added choices. In short, the new year 2023 will have added choices for domestic flights for all customers, soon also on the regional and international markets. Nigeria Air has the strategic direction, with a solid business plan for the next ten years and a start-up budget of 250 million US dollars. The Nigerian Government only invests 5% into this start-up funding (12.5 million US dollars), in line with its 5% share in Nigeria Air. By the transparent and structured PPP process the Government has ensured a clear ownership structure, including the leading African airline, with a secured start-up budget which gives Nigeria Air a solid financial foundation. The Buhari Government had promised a new aviation industry which the future of Nigeria can rely on. It took hard work by the many involved, driven by a Minister of Aviation never tired of pushing this Buhari strategy in the last seven years.


Prof. Tilmann Gabriel lives in Abuja and researches and works on African aviation projects.

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Christmas: Passengers Lament High Ticket Prices, call for Expedition in National Carrier Project

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Some passengers at the Nnamdi Azikiwe International Airport (NAIA), Abuja have condemned the increase in airfare during yuletide

The passengers made this known in separate interviews with the News Agency of Nigeria (NAN) and our reporters on Saturday in Abuja

They said that it was just necessary for them to travel by air to celebrate Christmas with relatives as traveling by air is fast and safe”.

A passenger, Mr Kayode Enitan, who expressed displeasure on the increase of ticket price, observed that upsurge in passengers travelling could be as a result of Christmas, few operational airlines, among other reasons.

“I have determined to celebrate this Christmas with my family. For the past four years, they celebrated in Lagos, while I celebrated both Christmas and New Year in Abuja because of work

“About three days ago, I booked with Arik Air for a return ticket from Abuja to Lagos for N170, 000. That is N85,000 for one way. God will save us in this country, “ he said.

Aviation Minister, Senator Hadi Sirika

Mrs Evelyn Chukwudi, a passenger, who frowned at skyrocketing of airfare, said that passengers had not felt any impact on addressing scarcity of aviation fuel.

According to her, the local airline operators have been referring to JET A1 as the major reason for the increase in air fares.

“ Truly, they just keep increasing the ticket prices. I am going to Port-Harcourt with my husband. The fare was about N85, 000 each. We actually booked few days ago with Air Peace.

“ This is too much. It is all about your choice of airline. The local airlines` fares are seemly similar, “ she said.

Abiodun Jimoh who spoke to SunriseNigeria, complained about his inability to get a flight from Abuja to Lagos due to the heavy traffic of passengers, and wondered why the Federal government has failed to fulfil its promise to establish a national carrier.

“The National carrier would have expanded the capacity of of airlines to service passengers, especially at times like this. It would have also ensured fair competition. As it is now, the few airlines operating are enjoying monopoly and can fix whatever ticket prices they want”.

Speaking in the same vein, a Port Harcourt-bound passenger, Ebitimi Promise lamented the prohibitive cost of air tickets by all the airlines which he described as exploitative on Nigerians.

“Where is the Nigeria Airways (referring to Nigeria Air) that government promised? I understand that all the airlines belong to a group and can decide to fix any amount they want, and we don’t have a choice. Please let the Minister of Aviation know that Nigerians are waiting for the national carrier he promised”

Another passenger, Alhaji Muhammed Kabiru, was also disheartened over the increase of ticket prices.
According to Kabiru, he chose to travel by air to Kano due to comfort, safety and timeliness.
“ Big thanks to President Muhammadu Buhari, who paid us our salary on time”

“The airfare now is too high. I paid N90, 000 one way from Abuja to Kano; I booked with MAX Air yesterday. I just need to travel to catch fun and enjoy my leave in Kano, “ he said.

NAN checks at both arrival and departure sides in the Abuja airport showed that passengers at the departure were extremely populated, while passengers at the arrival were scanty.

(NAN, with additional reports by SunriseNigeria reporters)

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