The recently revised Bilateral Air Services Agreement (BASA) between the Federal Government of Nigeria and the United Arab Emirates (UAE) marks a significant turning point in the aviation relationship between the two nations. The agreement officially recognizes the US dollar and other freely convertible currencies as legal tender for airfares on routes between the two countries. This provision has paved the way for the highly anticipated return of Emirates Airlines to Nigeria, resolving a protracted diplomatic and commercial impasse that led to the airline’s suspension of operations in 2022. The agreement not only allows for a smoother resumption of flights but also solidifies a framework for future aviation cooperation between the two countries.
The core of the revised BASA focuses on currency flexibility and operational autonomy for designated airlines. The agreement explicitly grants designated airlines from both countries the right to sell tickets and ancillary services in their respective local currencies or any other internationally accepted currency. This provision facilitates easier transactions for travelers and offers airlines more flexibility in managing their revenue streams. For Nigeria, the designated airlines include Air Peace and United Nigeria Airlines. The UAE’s designated airlines comprise Emirates, Etihad Airways, Air Arabia, flydubai, Air Arabia Abu Dhabi, and Wizz Air Abu Dhabi. Furthermore, the agreement affirms the right of airlines to utilize their own transportation documents and conduct commercial operations directly or through agents, reinforcing operational autonomy.
While the acceptance of foreign currencies for air ticket sales aligns with existing practices for certain international carriers already operating in Nigeria, such as Delta Airlines and United Airlines, the inclusion of Emirates in this arrangement has sparked controversy within the Nigerian travel industry. Nigerian travel agents have expressed strong reservations about the requirement to handle large volumes of foreign currency, particularly US dollars, for ticket sales. This presents a considerable logistical challenge, as agents must remit these funds to the International Air Transport Association (IATA), often facing limitations on cash withdrawals and transfers imposed by Nigerian banking regulations, such as the $10,000 limit. This situation creates a complex operational landscape for travel agents and highlights a potential friction point in the otherwise positive developments stemming from the revised BASA.
The BASA also addresses local operational expenses incurred by foreign airlines. The agreement stipulates that these expenses should be settled in the local currency of the host country unless otherwise permitted by domestic financial regulations. This provision aims to ensure that a portion of the airlines’ revenue circulates within the local economy and supports local businesses. This balanced approach acknowledges the need for currency flexibility while also promoting the use of local currency for on-the-ground operations, benefiting the host country’s economy.
Despite the resumption of flights by UAE-designated airlines to Nigeria, a noteworthy asymmetry exists in the operationalization of the agreement. As of the current status, Nigerian designated airlines, Air Peace and United Nigeria Airlines, are yet to commence operations to the UAE. The reasons for this delay remain unspecified, raising questions about the practical implementation of the reciprocal aspects of the agreement. The delay in commencement of flights by Nigerian carriers highlights the complexities of implementing bilateral agreements and the need for continuous monitoring and engagement to ensure that all parties benefit equally.
The revised BASA between Nigeria and the UAE signifies a move towards greater liberalization and cooperation in the aviation sector between the two countries. The agreement addresses key aspects of airline operations, including currency usage, operational autonomy, and local expense settlement. While the agreement holds considerable promise for enhancing connectivity and facilitating travel, the concerns raised by Nigerian travel agents regarding foreign currency transactions and the delayed commencement of flights by Nigerian carriers underscore the need for ongoing dialogue and adjustments to ensure smooth and mutually beneficial implementation of the agreement. The agreement also allows room for future designations of UAE airlines, demonstrating a commitment to continued expansion and collaboration in the aviation sector. This forward-looking approach provides a framework for ongoing adaptation to the evolving aviation landscape and ensures that the agreement remains relevant and beneficial for both countries in the long term.
