Chinedu Eze
Eight domestic airlines under the aegis of Airline Operators of Nigeria (AON), have explained why they had to go to court to stop the federal government’s choice of Ethiopian airline and to seek full implementation of a new national carrier.
In an interview with the ARISE News Channel, the CEO of Top Brass Aviation Limited and former Managing Director of the Nigerian Airspace Management Agency (NAMA), Captain Roland Iyayi, explained that AON was not averse to having a national carrier but was against the structure, which it insisted was at the detriment of Nigeria’s interest.
According to Iyayi, “What we have said and what we are saying is that the structure and the design that is being put together currently by the Honourable Minister of Aviation is a bit of an issue which we believe is not going to help the Nigeria state in the long term.
“He has come out to tell us that this is intended to be a public private partnership. And indeed if that is the case, we have a situation where we need to query, as a matter of questioning all the issues that have happened to date. We have found the need to question the transparency of the project, because we believe that most of the issues that have been raised or that are coming up are not entirely transparent, and we have issues with that. We have also come to find out, going through all the documentation that has been provided, that there are undue privileges that are going to be given to this new carrier, which the current domestic operators are not enjoying.
“For instance the government is proposing or the Minister is proposing to have 15- year tax moratorium to the national carrier. And again let’s be very clear; this is not a national carrier in the context in which it is being presented; this is actually a flag carrier. Simply because if you are bringing in a strategic investor at 49 per cent stakes and you have all the institutional investors one of which is 60 per cent owned by a foreign entity, in the long term what you are putting together is actually a foreign airline being allowed to come into the Nigeria airspace to operate, which is at variance with Article 7 of the International Civil Aviation Organisation (ICAO) convention, which is a cabotage.”
AON insisted that the structure of the planned national carrier was not in the overall interest of Nigeria, but being executed to benefit individual interest groups and foreigners instead of Nigeria.
“So we are saying that this not in the longer term interest of the Nigerian public. In any case, if you also review the outline business case that was put together by the Ministry of Aviation, it will seem to us that this is a contrived outcome which has been decided even long before the arrangement was reached. So we believe that ultimately the Nigerian public will not necessarily benefit. There will be unfair competition if you allow a new carrier to come in with special privileges than the other carriers are not getting. Again we have a situation where if you look at what the outline business case has presented, it will appear to us that this whole process will end up in a contrived outcome because it would appear that the choice of Ethiopian airline was already decided even before the process started,” Iyayi said.
AON explained that its issues bordered on unfair competition, contrived outcome of what the national carrier would be and lack of transparency “and we are talking about undue privileges that ultimately will result in a distorted market which at the end of the day will decimate the domestic market to the detriment of the Nigerian consumers.
Iyayi further said: “AON took the issue to the National Assembly before it resorted to going to court, when it became obvious that the lawmakers would not give it the urgent decisive action needed to stop the continuous process of going with the national carrier.
“We have actually been to the National Assembly. We had a sitting at the House of Representative and we also had a sitting at the senate. The outcome at the sitting at the Senate was that we should arrange a further meeting brokered by the Senate so that all parties can come together and then all the issues we have can be addressed. But unfortunately we were informed by the Senate Committee on Aviation, that the Honourable Minister was unavoidably absent. And that being the case and we have a process that is ongoing, we don’t want a situation where at the end of the day, we become stranded and unable to do anything further.”
Iyayi explained that AON went to court because it had, “a recourse and we believe in the absence of being able to sit around at table and negotiate the issues we have, out next best option or recourse will be to go to court and that is essentially what we have done. And that is why we believe that in the interest of the Nigeria public and the state, it is important that we take the step we have taken.”
On the need for a national carrier, Iyayi explained that if the government believes that there was a need to have a national carrier, we also strongly agreed on the need for a national carrier, “because when you have a national carrier and you have a full weight of a state behind you, and a lot of things can get done,” but he stressed that the basis of every bilateral or multi-lateral agreement is reciprocity.
“What we have seen by the agreement that is being put together to be signed with a strategic equity partner, is essentially removing all the bottlenecks that Nigerian domestic carriers are faced with. So if you are doing that for a national carrier, why can you not do the same for the domestic carriers with the capacity to do what you say you want to do? So the point is, we believe that if the larger interest of the Nigerian people is taking into consideration, then what we believe should be done is that the government will unpack an arrangement where you will not bring in into your market your competitor.
“We see Ethiopian Airlines as a major competitor based on the Single African Air traffic Market (SAATM) that is being put in place,” Iyayi said.
He added that AON would push the case to the level of the Supreme Court because the domestic airlines have a genuine case.
