A new national carrier is on the cusp of becoming a reality with the unveiling of its livery in far away Farnborough in London recently, during an air show. Details of its planned take-off have ramped up debates on its desirability against the backdrop of the country’s foul experience with the defunct Nigeria Airways, liquidated in 2003.
The Federal Government has set aside an initial $300 million and another $8.8 million for the airline’s take-off, covering aircraft acquisition and running costs for three years. The government claims to own five per cent equity, which it says will be held in trust for the general public until its shares are sold, while 95 per cent is reserved for the strategic partners.
Exuding confidence while revealing this in London, the Minister of State for Aviation, Hadi Sirika, stressed that the airline would make profit in three years of operations. “We will make the investments and follow the business plan through private sector management,” he boasted. On December 19, the first set of planes will arrive. Operations will cover 81 routes, comprising 40 domestic and sub-regional routes, with additional 41 international routes. Sirika flaunted job creation for pilots, aircraft engineers and other professionals; and Nigeria’s use of 78 Bilateral Air Service Agreements it had with other countries since 1970 as justification for the birth of Nigeria Air. This is as smooth as the narrative can be.
But it is evident that the airline is wholly government-owned enterprise so far, contrary to earlier avowals that public funds would not be involved, nor would government decide who would run it. The strategic partners have been elusive since a body was empanelled in November 2015 to prepare a report on the project, towards fulfilling President Muhammadu Buhari’s electoral promise. Apparently, this is the reason for the obsession. If for three years the core investor has not been snapped up, the likelihood that this scenario will change after the airline’s take-off is doubtful.
The country, therefore, would have been railroaded into another cul-de-sac. A return of Nigeria Airways through the back door bodes ill for the country. Apart from the defunct national air carrier and National Shipping Line, the four public refineries in Port Harcourt, Warri and Kaduna, Ajaokuta Steel Rolling Company, Nigeria Railways Corporation are the other monuments of waste, pointers to the fact that government, indeed, has no business being in business.
Going by global trends, Nigeria’s step is retrogressive and unrewarding. In the West, notable national air carriers have changed ownership to private hands or have an equity holding structure that banishes state control. British Airways was privatised in 1987 and this ramped up its growth. The Dutch national carrier, KLM, was fully privatised in 1998, but by 2004, Air France and KLM merged; Swiss Air and Austria’s national airline have been bought by Lufthansa.
Ethiopian flag carrier, African powerhouse in the airline industry, is entirely owned by the state, but run as a purely business concern and recently said it would sell some of the government’s stakes soon. Its success story cannot be replicated here because Nigeria does not have the discipline to do so.
Given the challenges of aviation sector, lack of a national carrier is not its problem, but the operating environment. It is a demon that has turned the aviation industry into a graveyard of sorts for many local airlines. In time past, the wings of Albarka, Okada, Oriental, Concord, Harka, EAS, Triad, Harco, Savannah, Belview, ADC lines, among others, caressed Nigeria’s airspace. Even Virgin Nigeria, owned by Richard Branson, a British guru in the business, which held promise on arrival as our flag carrier, had its wings clipped by corruption and infidelity to contract enforcement.
Early in July, foreign airlines lamented that the Murtala Muhammed International Airport, Lagos, was the most expensive globally with the high and multiple charges government agencies charge them, devoid of appropriate infrastructure that could justify such financial exertion. They are not the only ones complaining. The Airline Operators of Nigeria claim that they have 32 charges to contend with. This may well explain why many local airlines are debt-ridden or forced to suspend operations. According to the Assets Management Company of Nigeria, one of them was indebted to its trade and finance creditors to the tune of N375 billion in 2017, resulting in the takeover of its operations.
So far, the Nigeria Air transaction is opaque. As a result, its take-off should be on hold until the strategic partners are found. If the government wants to be credited with reform or achievement in the aviation sector, a better way of doing so should be to privatise all the services at the airports. With private capital inflow and world-class infrastructure, efficiency will be guaranteed in the operations of the Nigeria Airspace Management Authority, Federal Airports Authority of Nigeria and Nigeria Civil Aviation Authority, among others.
In fact, Nigeria is not in short of models to look up to in the aviation sector. Beside the sale of BA, the UK aviation industry was better for the privatisation of Heathrow and Gatwick airports. Private investors bought 88.52 per cent of shares in Lufthansa, Germany’s national carrier, when it was privatised. With no punitive measures taken against the corrupt elements who ruined Nigeria Airways, some of whom are lurking around to be part of Nigeria Air; in a country where corruption has become brazen, this is a flight destined to hit a rough weather!
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