HOPES, FEARS FOR NIGERIA AIR SHOW - Soul 2 Soul Mates Blog

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7/23/2018

HOPES, FEARS FOR NIGERIA AIR SHOW


The unveiling last week of a new national carrier Nigeria Air both rekindled hope and created fears in Nigeria. Speaking on Wednesday, July 18, 2018 before some select Nigerian legislators, heads of aviation agencies, airlines, aviation equipment manufacturers and the investing community at the Famborough International Airshow in London, Minister of State for Aviation, Senator Hadi Sirika, announced 'Nigeria Air' as the name of the new national flag carrier. The colour scheme of green and white, symbolic of Nigeria's colours, was also adopted for the airline.

The minister said the unveiling of the airline at the Famborough Airshow took due note of the fact that being the largest congregation of global aviation industry players, it afforded the best opportunity to market the airline to prospective investors and register it in the minds of all stakeholders ahead of its formal launch billed to take place soon in Abuja. Sirika announced that Nigeria Air will make its inaugural flight on December 19, 2018. Commencing with 5 aircraft, the airline is expected to grow in capacity to 30 aircraft within five years.

According to Sirika, Nigeria Air will be private-sector driven with the federal government acquiring only five percent equity in order not to repeat past mistakes. He said, "This airline, because it is a Private Public Partnership (PPP), the investors who put in their money and strategic partners would decide who runs the airline. This airline is a business and not a social service. It is not intended to kill any airline in Nigeria but complement and promote them."

It would be recalled that the defunct national carrier, Nigeria Airways, was liquidated under former President Olusegun Obasanjo in 2003 owing to huge liabilities occasioned largely by corrupt practices. Nigerian Airways, founded in 1958, was wholly owned and managed by the federal government. Mismanagement, abuse of privileges by government officials and failure to uphold contractual agreements were some of the problems that led to its collapse. British billionaire Richard Branson, set up Virgin Nigeria in 2000 had to pull out in 2010 over what he described as interference by politicians and regulators. The airline was rebranded Air Nigeria but it closed down in 2012 with N35 billion debts.

Minister Sirika lamented the many years of not having a national carrier in Nigeria despite its large flying population. He said the unveiling of Nigeria Air was an important day for Africa's largest economy and largest population. Sirika said the new airline will take advantage of 81 routes including domestic, regional and international.

The benefits of having a national carrier are numerous. Apart from creating jobs, a national carrier opens several windows for aviation training, establishment of maintenance facilities, ground handling and aircraft leasing. The money that today accrues to foreign carriers from the proceeds of Nigerian travelers to international destinations will eventually boost the country's economy when Nigeria Air becomes operational.

However, fears are already building up on the nature of the intended PPP which should not only drive the business but also define operational guidelines for the airline. For instance, if Nigeria Air is planned to be private sector driven, how come government has decided the choice of aircraft, lease/purchase of aircraft and acquisition partnership without a board or management for the airline? This is at a time when investors are still being wooed to invest in the airline. Besides, partnering with other national carriers that are supposedly competitors in a similar business is not likely to be very helpful in building a competitive national carrier that Nigeria Air is projected to be.

As government proceeds with other arrangements, it should be guided by transparency in all stages. We also advise that efforts should be made to resolve all opaque or outstanding issues including the establishment of a maintenance facility and a leasing company before the airline is finally launched. Otherwise, Nigeria Air would be another national carrier planned to fail.

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