The last may not have been heard of the row between Arik Air Nigeria and the British Aviation Authority (BAA) over Heathrow landing slots of the former that were allegedly reduced. The Federal government attempt to compel the British authority to restore the slots through a reprisal action has thrown up more questions and controversy, with some experts arguing that it is wrong to punish British Airways (BA), a public quoted company, for what seems to be a disagreement between countries. In this interview with GEOFF IYATSE, notable investment expert, Bismarck Rewane, CEO of Financial Derivatives Company Ltd, argues that Heathrow is not ordinarily the best choice for low-key airliners.The last may not have been heard of the row between Arik Air Nigeria and the British Aviation Authority (BAA) over Heathrow landing slots of the former that were allegedly reduced. The Federal government attempt to compel the British authority to restore the slots through a reprisal action has thrown up more questions and controversy, with some experts arguing that it is wrong to punish British Airways (BA), a public quoted company, for what seems to be a disagreement between countries. In this interview with GEOFF IYATSE, notable investment expert, Bismarck Rewane, CEO of Financial Derivatives Company Ltd, argues that Heathrow is not ordinarily the best choice for low-key airliners.'Nigerian Passengers, Reputation Will Suffer The Consequences'What is your stand on government's decision to reduce the Lagos landing slots of British Airways'A bilateral air service agreement law is subject to different interpretations. There are different ways of resolving disagreements arising from such laws. One of the ways is by punishing a party to the agreement.In this particular case, Heathrow does not belong to BA; it is not a property of BA. Secondly, BA is an airline that is privately owned.As it is, it has British interest; it has Spanish interest; it has German interest. It does not belong to a single country. So, the action Nigerian government has taken supports the notion that airlines belong to countries. Airlines do not belong to governments of the countries they are based; they are purely institutions owned by the public. In fact, Nigerians own shares in BA.How was the government supposed to react when the UK government took similar action against Arik'The UK did not take any action against Arik. UK government has rules under which slots in the Heathrow Airport are bidded. There is an option. When DSTv bided for Premier League right, HiTV won the right while DSTv gave up.The following year, DSTv increased its bid and won the right. Slots of the Heathrow Airport are auctioned every year. If you don't get in the primary market, you can buy from the secondary market. Arik bought its slots from the secondary market but when renewal time came, it could not pay the renewal fee.What are the options for Arik, considering the turn of events'It should go and buy from the market. If I want slots today, I will buy. That is the way it is done.Will that be commercially viable for the airliner'You don't have to go to Heathrow. There are five airports in London; you can go to any other airport you want to, or can afford. You must not go to Heathrow.Won't similar issues resurface if it decides to take up landing slots in other airports as you suggest'Heathrow is the busiest international airport in the world. The price of slot at Heathrow is the highest in the world. Before you decide to buy slot in Heathrow, you should have sufficient business to justify it. If you buy slots in Heathrow, whereas you carry only 50 or 70 passengers, you will not find it profitable.I don't believe every airline has sufficient traffic to justify bidding for slots in Heathrow. For instance, if we have a bidding system in Nigeria, Lagos Airport will command four or five times the landing fee of Abuja. This is because Lagos is where the traffic and market is. The same landing fees apply for all airports in Nigeria. But in other places like UK, it is classified.What are the investment/economic implications of the action taken by the government'The first people that will be affected are the Nigerian passengers that will be stranded. Similar thing happened some years back during the military regime.In anyway, what the government has done is a sort of action that is normally taken by military, not democratic government. Nigerian passengers who have booked for tickets and made some other commitments will lose and be thrown into confusion.Secondly, BA will lose part of its Nigerian market. In any case, it will withdraw part of some of its aircrafts to other markets.The greatest victim is the Nigerian reputation that will be seriously affected. Nigeria is a signatory to international conventions on aviation. And immediately you act against the conventions, the world will lose confidence in you. The reputational cost on Nigeria is very huge.Are there going to be sanctions'There will be no sanctions. The only thing is that nobody will do business with you tomorrow. Remember the case of Virgin Atlantic when the company was forced to move from MMA1 to MMA2 against the memorandum of Understanding (MoU), signed with Richard Brandson.Since then, nobody has agreed to come to invest in Nigerian aviation. The company established its airline but it was chased away. There won't be sanction. But the action sends negative signal to the international community about Nigeria.How could the situation be salvaged'I believe the governments will sort it out through negotiation. But the signal we have sent is that we are not willing to comply with international conventions, which we are signatory to.What is the underlying clause in the relevant convention on aviation'The convention says that when there is Bilateral Air Service Agreements (BASA) between two countries, they can share slots. The government does not give landing slots; it can only give you access but you will pay the landing fee. If BA comes here, it will pay the landing fee and obey the rules. The government of the land sets the rules that are operational in the country.Does the action not sound political; one expected that Abuja BA slots should have been reduced instead of Lagos considering the economic relevance of the latter'What I keep saying is that BA is not a party to the bilateral agreement. BA is a private airline. Why didn't they stop Virgin Atlantic flights' Do you understand the logic' If you are going after BA, why didn't you also stop Virgin Atlantic' Why didn't you reduce Abuja flights too like in the case of Lagos' These are the questions people will raise.
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