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Thursday, July 18, 2024

Breaking monopoly in Nigerian aviation industry

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By Isah Aliyu Chiroma

A small number of powerful airlines have for decades dominated Nigeria’s aviation sector, which is critical to the country’s economic development and connectivity to other countries. Due to the monopoly’s suppression of competition, there are now few route options, expensive ticket costs, and frequently poor service.

The goal of recent policy changes and strategic measures, however, is to end this monopoly and enable regional airlines to grow and compete internationally. This change is expected to improve consumer choice, boost industry efficiency, and strengthen Nigeria’s standing in the international aviation market.

These large airlines have benefited from a wide range of commercial advantages, including access to profitable international routes, prime slots at important airports, and preferential treatment in government regulations. It has become difficult for smaller airlines to compete and expand in this market.

Local airlines have also had to overcome a number of challenges, including poor infrastructure, expensive operating costs, and strict regulatory restrictions. Local issues have been made worse by the government’s lack of investment and support for the industry, which makes it more difficult for local airlines to grow and successfully compete on international routes.

Nigeria’s Minister of Aviation and Aerospace Development, Festus Keyamo, has announced that the Federal Government is empowering Nigerian airlines to operate international routes, particularly the United States and South American countries. Keyamo stated that the government is implementing plans for domestic airlines to commence direct flight operations to these countries. He explained that the government is negotiating bilateral agreements (BASA) with foreign entities to ensure that these rights are enforced by local operators.

The Nigerian government has implemented many legislative changes and measures with the goal of dismantling the monopoly and enabling indigenous airlines, having realized the importance of democratizing the aviation sector and promoting economic growth. The National Civil Aviation Policy (NCAP), which prioritizes consumer protection, competition, and liberalization, is one of the most important of them.

More lenient licensing requirements are one of the important initiatives under the NCAP. These rules facilitate the licensing process for new competitors as well as the expansion of local airlines already in operation. Bilateral aviation service agreements (BASAs) with foreign nations are also being reviewed and renegotiated by the government. By taking this action, local airlines will have greater chances to operate on foreign routes and fair competition would be ensured.

The government is making significant infrastructural investments in order to further promote regional airlines. These include increasing safety and security protocols, modernizing airport infrastructure, and optimizing air traffic control systems. These kinds of expenditures are necessary to guarantee that regional airlines can function effectively and adhere to global standards.

Financial incentives and support systems are needed to assist regional airlines in lowering their operating expenses. These policies include of tax benefits, subsidies, and low-interest loan availability. The government needs to increase local airlines’ competitiveness and allow them to provide more reasonably priced and superior services by lessening their financial burden.

Positive outcomes are already being produced by these initiatives. A number of regional airlines have started to grow their fleets and look into additional foreign routes. Consumers will benefit from lower costs and better services as a result of more competition. With the expansion of regional airlines, it will boost employment and help in advancing the nation’s economy as a whole.

With the deregulation of the aviation sector, it will increase trade and tourism. Nigeria may draw more visitors and make business travel easier with additional airlines operating foreign routes, further integrating the nation into the world economy.

To strengthen indigenous airlines and improve Nigeria’s connectivity with the rest of the world, it is imperative that the monopoly in the aviation sector be broken. A more competitive and dynamic aviation sector can be created by the Nigerian government through financial support, infrastructural improvements, and strategic policy adjustments. With this change, Nigeria would be positioned as a major player in the global aviation industry and consumers, local businesses, and the economy as a whole stand to gain significantly.

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