Business Hilights
Tracking Nigeria's Headline Business News Online

20 year’s wait for Fly Nigeria Act killing local airlines—Expert

The need for faster legislative attention to the over 20 year’s preparation for the enactment of Fly Nigeria Act has been stressed in Nigeria.
Speaking at the recent fourth quarterly breakfast meeting of the body in Lagos, President of the Aviation Safety Round Table Initiative (ASRTI), Gbenga Olowo, noted that a key policy or law that will return local airlines to profitability remains passing the Fly Nigeria Act into law and getting it assented by Mr. President.
Investigations by Business Hilights showed that the Act being designed to mainly drive sufficient traffic to local carriers has been in the works in the last two decades.
It was introduced at the National Assembly during the first term of former President Olusegun Obasanjo but has not been able to fly till now.
Additional details revealed that needed legislation is to allow Nigerian commercial operators a monopoly on the fares of government related travel in and outside the country.
Olowo averred that “All civil servants in the country or anyone on government funded air travel will be compelled to fly with the local carriers. The bill, according to an estimate, will earn airlines N500 billion when enacted into law”.
He decried that due to the absence of such laws, the local air travel market has been forced to remain small despite the huge population and the global aviation growth.
Aviation statistics show that out of over 180 million population, about 15 million (that is, eight per cent) travel by air, whereas, a place like Hong Kong, with 73 million has air traffic of 23 million.
While decrying that Nigerian airline operators hardly cover costs of operations on a daily basis, Olowo said “The Airlines Operators of Nigeria (AON) need to ask themselves if they are making sufficient money in the business to cover cost. That is why AON should go and put up a bill in respect of the Fly Nigeria Act because it is an indirect way to free business for the airlines and arrest market share.
“I put it to you (airlines) that you are not making enough money to cover the numerous cost and those cost will keep rising. All the costs are exogenous to you; you keep trying but you cannot control them. Therefore, your solution is to increase revenue by the rescue of market share. NANTA has succeeded and they got something good. AON must follow to ensure that it becomes a law.
“We love our airlines and really want them to compete. But I don’t want to get on board and start comparing them to British Airways or Delta. I don’t want be regretting that ‘if I were to be on BA, this or that would not be happening’. No. that is why our airlines must earn the respect that they crave,” ASRTI boss submitted.
Corroborating Olowo’s presentation, the Managing Director of Overland Airways, Capt. Edward Boyo, made it clear that the Fly Nigeria Act initiative is welcome development, but “The airline business is not different from any other business. Let the market force prevail and let the mechanism work. We airline operators are set out to make profit from the provision of airline transport services and we have an ecosystem within which we operate. That ecosystem must stop predating on airlines. The airlines are on top, but the predatory behaviour of the entire society on the airlines is too much. You don’t do anything for us, yet the public is demanding for an airline industry that they have not invested in”.