US embassy cable - 05LAGOS89

UNCLAS SECTION 01 OF 02 LAGOS 000089 
 
SIPDIS 
 
TRANSPORTATION FOR FAA; DAKAR PLEASE PASS TO FAA REP ED 
JONES; ROME PLEASE PASS TO TSA REP JOHN HALINSKI; ACCRA 
FOR DHS 
 
SENSITIVE BUT UNCLASSIFIED 
 
E.O. 12958: N/A 
TAGS: EAIR, EINV, NI, CVIS 
SUBJECT: CONTINENTAL STEPS CLOSER TO DIRECT LAGOS- 
NEWARK FLIGHT 
 
 
1. (SBU) Introduction and summary.  On December 2, 
2004, the Nigerian Civil Aviation Authority (NCAA) 
approved Continental Airlines' request to provide daily 
service between Newark and Lagos, possibly as early as 
this spring.  That same day the NCAA informed 
Continental that its initiation of flights nonetheless 
hinges on Continental's passing a safety oversight 
audit satisfying the requirements of an assessment 
program approved by Nigeria's Minister of Aviation 
(MOA). While the NCAA seems to be accommodating 
Continental, we suspect that the NCAA will not have the 
last word in the matter.  We have reason to believe 
that the MOA has not facilitated Continental's work; if 
anything, the MOA has made it more difficult, most 
probably in an effort to give Virgin Nigeria Airways 
(VNA) a lead on Continental.  We are monitoring 
Continental's efforts closely, which represent a test 
case of Nigeria's willingness to respect the Open Skies 
agreement between Nigeria and the United States.  End 
introduction and summary. 
 
2. (SBU) Houston-based Continental Airlines has been 
laying the groundwork since October 2003 in Lagos for 
direct flights to Newark, New Jersey.  (Comment. Should 
Continental begin operations before June 2005 as 
planned, the airline will be one of the few providers 
of direct flights between West Africa and the United 
States. End comment.) During the week of January 10 - 
17, two Continental representatives came to Lagos to 
begin hiring managerial staff.  These human resources 
officials told Consulate Economic Officer that 
Continental will have five or six permanent expatriate 
employees in Lagos and 50 to 60 direct hire local 
staff, as well as an additional 30 to 40 local 
contractors.  Continental is scheduled to hold a press 
conference in Lagos on February 1 to publicly announce 
its new Newark-Lagos flights. 
 
3. (SBU) Chris Amenechi, Continental's permanent 
representative in Nigeria, told Lagos consulate 
officials on January 16 that Continental has had 
difficulty acquiring office space at Murtala Muhammed 
International Airport (MMIA).  He believes the problem 
lies with the Ministry of Aviation (MOA).  Amenechi and 
MMIA officials agreed on office space for Continental 
on two occasions since September 2004, only to be told 
later the "Ministry" (according to Amenechi meaning the 
"MOA," airport officials being unwilling to name names) 
had reserved the space for Nigeria's new national 
carrier, Virgin Nigeria Airways.  The most recent offer 
of airport space to Continental meets its requirements, 
but is not contiguous and covers 320 square meters 
(almost 1000 square feet) in three different places 
around MMIA. 
 
3. (SBU) On January 12 in Abuja, Embassy Economic 
Counselor, Economic Officer, and Economic Specialist 
met Bismarck Rewane, the lead financial adviser to the 
Government of Nigeria (GON) on Virgin Nigeria Airways. 
Rewane confirmed the GON's determination to get VNA 
airborne and U.S. landing rights despite the US-UK 
aviation dispute over UK landing rights.  Rewane also 
addressed Continental Airlines' intention to begin 
direct U.S.-Nigeria flights. 
 
4. (SBU) Rewane said the GON had not given Continental 
Airlines formal approval to begin Newark-Lagos flights 
in 2005, despite Continental's receipt of written 
approval signed by Nigerian Civil Aviation Authority 
(NCAA) Director General, Peter Alawani.  (Comment. 
Rewane may be right.  The NCAA is probably not be the 
body that will ultimately decide the issue.  We have 
seen nothing from the Ministry of Aviation through the 
Ministry of Foreign Affairs, the channel for the Open 
Skies agreement that confirms formal approval of 
Continental's request.  End comment.)  Continental 
Airlines announced publicly on December 9, 2004 that 
the GON had approved its new flights to Lagos.  Rewane, 
who may not be fully in the loop himself, had told us 
January 12 that a "handwritten" GON document approving 
Continental's flights to Nigeria was not sufficient. 
He had added that despite Nigeria's temptation to link 
its approval of Continental flights with U.S. approval 
of landing rights for Virgin Nigeria, he didn't believe 
the GON would "hold Continental to ransom." 
 
5. (SBU) Continental is continuing to take steps to 
initiate operations.  The airline will have security 
experts in Lagos the week of January 24 to assess 
security threats.  Continental is also arranging for 
the NCAA to conduct the International Civil Aviation 
Organization (ICAO)-required safety assessment of 
Continental's Newark and Houston operations. 
Continental expects the NCAA to conduct this assessment 
in March. 
 
6. (SBU) Comment: Although most Nigerians are 
interested in shorter and more affordable flights to 
the United States, which Continental will offer, the 
MOA is engaging in footdragging, which is no surprise. 
The Ministry, after all, has endorsed the VNA deal and 
sees Continental as a threat and competitor.  This 
explains why the MOA has put up barriers along the way, 
such as its denying office space to Continental at 
MMIA.  It is of course possible, as Amenechi has 
opined, that MMIA officials are seeking payoffs from 
Continental in exchange for office space.  Either way, 
both explanations highlight some of the problems U.S. 
companies face doing business in Nigeria.  End comment. 
 
BROWNE