National Airline Takes off in December, Says FG

By Chinedu Eze in Lagos and Kasim Sumaina in Abuja

The federal government yesterday said the proposed national airline for the country would be unveiled in December, 2018.

The Minister of State for Aviation, Senator Hadi Sirika, said this in a statement by the ministry’s Deputy Director, Media and Public Affairs, James Odaudu.

The minister, according to the statement, made this commitment while receiving the Outline Business Case Certificate of Compliance from the Director General of the Infrastructure Concession Regulatory Commission (ICRC), Mr. Chidi Izuwa, in Abuja.

According to the minister, “There is no doubt that the issue of national carrier for Nigeria is very close to the hearts of both the government and the people, which is the reason it has taken the option of a Public Private partnership with the belief that it was the only way to deliver a national carrier that would stand the test of time.”

Sirika also expressed satisfaction with the way the Transaction Advisers had carried out their assignments with utmost diligence and timeliness.

He assured that the National Carrier that would be delivered would be world class in operation and management.

The minister said the presentation of the certificate was a testament on how far the project had gone.

The proposed airline will gulp $8.8 million as preliminary cost and $300 million as take-off cost.

The project would be executed through a Public Private Partnership (PPP).

According to Sirika, Nigeria would receive the first set of five airplanes for the airliner on December 19.

The airline would make profit in three years after operations, he said.

“We will make the investments and follow the business plan through private sector management. We intend to get a 30 aircraft market in five years. But we will begin with five aircraft on the day of launch,” he said.

Sirika added, “At Farnborough International Public Air show coming July 18, 2018 in London, we will unveil the name, logo, colour scheme, the structure and the type of airplane about the national carrier. We will also place the order for the aircraft at the event.”

The minister explained that the government would step in to cover the funding gap at the onset and exit later.

He said the government would not get involved in the management of the national carrier, adding that Nigeria’s population of over 180 million people is huge enough to support aviation and that the airline would take advantage of Bilateral Air Service Agreement (BASA) that the country had with over 70 countries.

According to him, it would also take advantage of the Africa Single Air Transport Market and would be the best player if the government gets it right.

“But if we don’t, it will become a threat to us. But I believe we are on the right track,” he said.

The minister also gave an assurance that the national carrier would not kill the domestic airlines operating in the country.

He commended the efforts of the ICRC Director General and his team in ensuring that the National Carrier project remained on track through the observation of all legal aid regulatory frameworks.

Also speaking, Izuwah, said the presentation of the Certificate of Compliance was an official green light to proceed with the procurement process.

According to him, start-up cost over the next three years is about $300 million, but pre-start-up is $8.8 million.

“The rest of the investment will be equity injection, which will happen in tranches because you do not need all the monies at once. External capital injection also depends on the profitability of the airline. Though, you need that initial government financial to make it take off, but what is important is that the national carrier will be entirely private sector controlled,” he said, adding, “There will be zero government interference. But if that happens, it invalidates the certificate and the entire process.”

He said his commission, in granting the Certificate reviewed the Project Structuring Report, also known as the Outline Business Case, in line with the ICRC Act of 2005.

According to Izuwah, “The certificate was granted on the condition that the federal government has committed to leveraging on private sector capital and expertise towards the establishment of the national carrier through the provision of a Viability Gap Funding for the project.”

He stated other conditions for granting the Certificate of Compliance to an official commitment to zero contribution to airline management decisions and zero government control, warning that any attempt to impose government control would invalidate the Certificate and the entire process.

The ICRC Director General commended the minister for his commitment to changing the face of aviation in Nigeria through infrastructural renaissance and said the PPP remains the only viable option for Nigeria in view of dwindling national resources.