An expert has called for an immediate review of Nigeria’s Bilateral Air Services Agreement (BASA) to create an enabling business environment for Nigerian airlines. The multiple entry points and the frequencies of foreign airlines have been more disadvantageous to the Nigeria airlines as opposed to the advantages the agreement was supposed to present.
This was the submission made by Nick Fadugba, Chairman of African Business Aviation Association (AfBAA) at the recent webinar organised by AELEX Partners, the third in the series of its aviation webinars. According to him, at the time the Bilateral agreement was made, the Nigerian airlines in play at the time was relatively new and now, to ensure the growth of the airlines, there’s a need to review the agreement to properly incorporate the airlines as the agreements do not favour the average Nigerian carrier.
According to Fadugba the multiple entry points have diluted the domestic market for the carriers.
Speaking further, he noted that there’s a need to overhaul the current business plans of the airlines with emphasis on unit cost, load factor and yield. He also noted that for the airlines to rise above the current situation there should be cooperation among airlines through joint training, MRO, spares pooling, joint operation, interlining and code-sharing.
While showing optimism, a panelist at the webinar, Ms. Iyabo Sosina, an international aviation expert and former Secretary General of African Civil Aviation Commission (AFCAC), stated that the future of air transport in Nigeria is bright despite all the challenges at play now. She advocated the need for rebuilding and repositioning the industry. According to her, there’s a need to focus on the Nigeria Civil Aviation Authority (NCAA) without unnecessary political interference with the authority. Speaking further, she advised that airlines in Nigeria should be reduced to not more than four. These airlines must be able to boast of between 10-20 aircraft each. She also noted that more than ever before, there’s a need for airlines to initiate collaborative ways of doing business as mergers can’t be forced. This she said will make the industry stronger to be able to compete on not just the domestic level but also on the regional and international scenes.
Dr. Arthur, Group Executive Finance, Ghana Airport Company, noted that airports need to start afresh by collaborating with each other and aviation stakeholders. He advised that African countries should come together to share expertise in order to make the aviation industry viable. He also noted that countries should look at investing in non-aeronautical inclusions such as building malls in the airports
Sindy Foster, the Principal Managing Partner at Avaero Capital Partners stated that the Nigerian aviation industry has been in crisis way before Covid-19. According to her, the lack of capitalization and the low propensity of Nigerians to fly has been a major issue which, more than ever before, has become pertinent to address. For her, there’s a need to look into the factors frustrating the airlines business. One of which is the ticket prices. Multiple taxations should be removed to encourage airlines growth.
Also, she expressed disappointment that the Nigerian government jumped on the train of social distancing on flights by reducing load factor to between 50%-70%. According to her, the airlines were already in a dire situation when they were operating at full capacity and asking them to reduce the load capacity is another way of putting down airlines striving to get back on their feet post covid-19.
The Regional Director, Advocacy and Strategic Operations at IATA, Adefunke Adeyemi noted that the airline industry in Africa has experienced a revenue loss of about $6bn and flights went down by 94% at the end of April. She stated that despite government’s implementing significant relief measures across the globe, there’s a need to do more.
In her words, IATA has advocated for financial support for Africa from various organizations like UNWTO, World Travel and Tourism Council, AFRAA. Adefunke advised that in order to restart the aviation sector, there’s a need to restore public confidence in air travel, putting adequate health and safety measures in place to prevent the spread of COVID-19, while ensuring aviation essential to jump start economies as COVID-19 is brought under control.
In his contribution, Richard Gimblett, a Partner at Holamn Fenwick Willian, a U.K-based law firm, while supporting the points made by other panelists, stated that governments across the world are devising measures to restart the aviation sector and that the Nigerian government should not be left behind.
He advised that the government can restart the industry by providing direct financial support to passenger and cargo carriers, ensure relief on fees, charges and taxes, make forex available for technological innovations while also engaging with the leasing and financial community.
The moderator of the webinar, Theophilus Emuwa, who is also the Managing Partner, Head of Tax at AELEX said there is a need for transparency in the management of funds for the aviation industry to grow.