Operator Condemns Multi-Designation of Foreign Airlines

By Chinedu Eze

25 April 2011

The Chairman of Firstnation Airways, Kayode Odukoya, has said that multi-designation of foreign airlines is not healthy for the existence and growth of domestic carriers because they erode the local market and deny the Nigerian airlines revenues.

Odukoya who spoke with newsmen recently at the Murtala Muhammed International Airport, Lagos, said every country must apply some restrictions to protect its own airlines in spite of the open sky treaties, noting that the United States and Europe have policies that protect their own airlines.

He remarked that although the Yamoussoukro Decision, which is an open sky policy adopted by African nation to enable airline from one country in the region to travel to other countries in the continent without immigration restrictions or other hindrances, was accepted with a clause that said that its adoption would be determined by market forces.

He said that this means that each country that is signatory to the Yamoussoukro Decision would look at the its own economic interest before embracing it.

“You have to read the Yamoussoukro Decision, we played significant role in it. I went to the Decision Treaty in Lome, Togo. I was there; we were part of the working committee for ECOWAS. I was the chair of the sub-committee to make this happen, but Yamoussoukro has a clause, it has to be determined by economic forces. Before you designate the route between Lagos and Accra, you look at the average number of passenger movement Lagos-Accra,(Ghana) what is the existing capacity? If we have sufficient capacity between Lagos and Accra why add more because you are going to weaken the other capacity players? And there is nothing as free market anywhere in the world. In the UK how come they are complaining of Emirate, all the European carriers? How come they are trying to restrict Emirate? How come Canada refused to allow Emirate additional frequencies? So there is nothing as free market, you start to advocate when you are strong,” Odukoya said.

He said that the liberallisation and open sky were preached when the mega carriers of Europe had become very strong, but in the past, when they were groping economically they protected their markets, adding that market capacity is critical for a country to determine additional frequency to an airline.

Odukoya warned of what he called frequency dumping whereby an airline drops fares to unprofitable level in order to undercut his opponent, noting that this could kill the domestic airline market.

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