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Aviation stakeholders remain divided over Single African Skies

The Single African Air Transport Market (SAATM) has gained a lot of attention from stakeholders in the African aviation industry and at the world stage.

The initiative has been around for a while now but only gathered steal after the regulators’ insistence to force-feed the plan to African carriers, which included that of Nigeria.

In turn, the regulators along with local airlines and their respective governments are expected to get in line with the SAATM or risk not gaining the benefits it has to offer in the long run.

Senator Hadi Sirika, Nigeria’s Minister of State on Aviation, announced that the country was preparing to examine all the subsisting Bilateral Air Services Agreements (BASAs) to be in consonance with the Yamoussoukro Declaration (YD) while the process of domesticating the decision is at the advanced stage.

It can be recalled that the Yamoussoukro Decision that was adopted back in 1999 was named for the Ivorian city in which it was agreed. It commits its 44 signatory countries to deregulate air services, and foster regional air markets open to transnational competition.

On the other hand, Single African Sky is a continental program that would establish a high-level, satellite-based air navigation system for the entire African continent.

The air navigation system once finished and is operational, would lead to complete continental coverage for satellite air navigation, better flight safety, and cost savings due to shorter flight routes.

The Minister who made the announcement during the sensitization workshop on Single African Air Transport Market (SAATM) at the Nigeria Civil Aviation Authority (NCAA) Annex under the theme, “Implementation of SAATM: Its impact on the Nigerian Aviation Industry and National Economy,” remarked that the future held great challenges and potential as a continent that is striving to reposition itself by taking advantage of the benefits that the full implementation of the Yamoussoukro Decision (YD) through the Single African Air Transport Market (SAATM) has to offer.

He said:

“We must all therefore strive to commit to the full implementation and operationalization of SAATM, we need to leap forward so as to become an effective global competitor in aviation.

“In this regard, Nigeria being one of the pioneer Member States signatories to YD, one of the 23 states that have so far made solemn commitment to the implementation of SAATM by 2018 has constituted a National implementation committee to review all the subsisting Bilateral Air Services Agreements (BASAs) to be in consonance with the YD while the process of domesticating the decision is currently at the advance stage.”

“Nigeria recognized the need to provide for enhanced traffic growth that will be an offshoot of the full operationalisation of SAATM. Currently some of the International airports are being expanded with the addition of new terminals, the Government has also approved the concession of the major international airports in its efforts to re-position them for better service delivery,” added Sirika.

However, the Airline Operators of Nigeria (AON) have railed against the plan, and has appealed to the Federal Government of Nigeria to not push through with the full implementation of the SAATM.

AON reasoned that while the idea may look great on paper, there is a need for government to be made aware of the pros and the cons of the direct impact the decision would have on the Nigerian economy and Nigeria as a whole.

The operators emphasized that they are anxious about the timing not being right, as there remains unresolved issues and challenges faced by Nigerian aviation that would eventually weaken the perceived gains of this momentous pact.

AON Chairman, Capt. Nogie Meggison said: “Some of the problems for Nigeria to take its position and compete favorably in the open skies process include the following:

“The basic issue of free movement of people and trade is an integral aspect of the declaration that will go a long way to determine the fairness of the SAATM project. Sadly, it is a well-known fact that Nigerians require over 34 visas to travel within Africa alone. This is an issue that first needs to be addressed. Before opening the skies, open the visas”, he said.

The operators said the government should come out with a strong policy that would place Nigerian airlines in a favorable position to reap the full benefits of open skies.

According to them, astronomical bank Interest rates of 28% compared to access to inexpensive funds offered and guaranteed by the government of most African carriers make up part of the challenges.

AON also stressed that Nigerian airlines pay VAT while most African carriers do not in their respective countries and in Nigeria. This is already a deficit of 5% on a small margin industry from the start for Nigerian Airlines.

“Airlines in Nigeria don’t have access to forex. We only get allocation per percentage of our bids, which takes an average of 6 months. Most of the African carriers are subsidized and being funded by their government.

“Nigerian airlines are at a disadvantage to other African Airlines that are largely government owned and heavily subsidized. For instance, South African Airways got on the average about $350m yearly in the past decade; Kenya Airways got about $600m in 2016, while RwandAir has never published its financial results for over a decade. Yet they will be competing against Nigerian airlines with private finance at 28%”, the AON stated.

The body also bemoaned the fact that Nigerian airlines are exposed to other charges, taxes, levies and fees. 

“On the average, we pay about 37 different charges that come under the guise of statutory levies and taxes to sustain a staff strength of about 18,000 staff of the various government agencies compared to most African carriers who pay a fraction in their countries to support a staff strength of less than 500,” the operators explained.

AON then called on the government to reconsider the immediate implementation of the open skies and appeal to them to collaborate with the local technical expertise in the aviation sector by going back to the drawing board and coming away with a clear and much stronger policy that Nigeria can completely benefit from.

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