Many domestic airlines are not able to break even because of the unfriendly business environment. They are weighed down by heavy debts.
Sadly, this has been traced to a number of factors, which include unfavourable policies that govern the operations of the airlines in the country.
Analysts in the aviation industry believe that one of such policies is the issue of the Bilateral Air Service Agreement entered into by the Nigerian government in partnership with some foreign airline operators.
The BASA is an agreement which two countries sign to allow international commercial air transportation between their territories.
However, the agreements entered into by Nigeria are largely skewed in favour of the foreign airlines which have multiple entry access into the Nigerian airspace, a feature that is not reciprocated by the local airlines into the foreign countries.
The multiple entries granted these airlines, experts have said, has contributed in no small measure in reducing the capacity of Nigerian carriers.
As a result of this imbalance, analysts in the aviation industry have called for the institution of major policies that will help to protect and strengthen the activities of the local airlines in Nigeria, to ensure that they are able to compete favourably with their international counterparts.
An aviation expert, Mr. Olumide Ohunayo, said that government needed to empower the local operators with an airline policy that would help to increase their capacity.
Ohunayo, who is the head of the Zenith Travels, said such policy should include key areas which had been giving operators and stakeholders a cause for concern, such as the reduction of taxes, stablisation of aviation fuel and provision of market for carriers.
He said, “What we need is a national airline policy that will strengthen the industry and our airlines. The policy should include a reduction of taxes, a modernisation of Air Traffic Control, regulatory burden reforms, stabilisaton of aviation fuel prices, provision of market for the flag carriers through a Fly Nigeria Act.
“There should also be economic growth stimulation with accompanying jobs and salaries, while also ensuring that our local carriers consolidate and compete globally through favourable partnerships.”
He explained that despite the transformation witnessed in the airport terminals through government’s remodelling effort, a lot still needed to be done to improve the industry.
“There should be more focus on airport certification, fragmented carriers, inadequate insurance for agencies, skewed bilateral agreements, executive interference and impunity among others,” he said.
On his part, the Chief Executive Officer, ED Aviation Consult, Mr. Edward Young, condemned the granting of multiple entries to foreign airlines, adding that it was doing the local operators little good.
He stressed that the issue of multiple destinations gave foreign airline operators a higher advantage over the local operators, adding that this had in turn reduced the scope and effectiveness of the domestic airline operation.
This, he explained, could be a major factor responsible for the instability in airfares on domestic routes.
He, therefore, posited that government must, as a matter of urgency, create an enabling environment to ensure that local or domestic airlines break even.
This, he added, would help to reduce capital flight and improve activities as more aviation experts would be willing to stay in the country.
He said, “I think it is important for the Federal Government to create policies that would boost the activities of local airline operators. For instance, there should be a policy that any international carrier that comes into the country should drop passengers at the capital, maybe at Lagos airport or Abuja airport; and from there, the domestic airlines will take over to drop the passengers in their final destinations.
“It is not nice that flights such as British Airways can just have access to most of our airports, and can drop and pick up passengers in other cities such as Kano, and Enugu. Even Air France goes to cities such as Port Harcourt and Kano to drop and pick up passengers.
“All these multiple entries that our government gives to these international airlines are not helping our local industry and it hardly happens in other climes, and should not be encouraged to happen in this country.”
Young noted that the move was robbing the local operators of a lot of business and revenue, adding that it could be one of the reasons some operators were in debt as they could hardly meet their financial obligations.
“For instance, Emirates comes into Nigeria from Dubai twice in a day and lands in various locations in the country; they are taking a lot of our business and this should be looked into by our government,” he stated.
Speaking on the same issue, the Chief Executive Officer, Finum Aviation, Mr. Sheri Kyari, said that there must be concerted efforts on the part of government and regulators to bring down the cost of domestic flights.
He said that there were a lot of challenges that made airfares to be on the increase, adding that they ought to be addressed urgently.
“I think government should focus on how they can assist airlines to bring down the cost of the fares. If this is done, there will be increased patronage and it will help airlines to strategise and expand their activities,” he said.
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