Berthing National Carrier amid Turbulence

Since 2015, Mohammadu Buhari’s administration has continued to promise Nigerians that it would berth national carrier in the course of his administration, but such promises are still hanging in the air. However, amid litigation hanging on the planned national airline, the Minister of Aviation still believes that Nigeria Air would fly before end of May 29, 2023, but stakeholders are in doubt, writes Chinedu Eze

After the inauguration of his ministers on November 11, 2015, the then Minister of State, Senator Hadi Sirika, in 2015, held a press conference in Lagos and reeled out his plan for the aviation industry.

Sitting atop his Aviation Road Map was the establishment of national carrier, which was later named Nigeria Air when it was unveiled in London at the Fanborough International Airshow in London, July 2018. 

Sirika then assured Nigerians that the national carrier would be established that year, noting that “This is an important day for Nigeria, which has the largest economy in Africa, and largest population, with GDP of around half a billion dollars, and the only true aviation player in West and Central Africa”.

According to him, “Nigeria has unfortunately not been a serious player in Aviation for a long time. We used to be a dominant player, through Nigeria Airways, but sadly not anymore. This will be a national carrier that is private sector led and driven. It is a business, not a social service. The government will not be involved in running it or deciding who runs it. The investors will have full responsibility for this. The Nigerian government will not own more than five per cent (maximum) of the new national carrier. The government will not be involved in running it or deciding who runs it. New terminals in Lagos and Abuja Airports will add 11 million passenger capacity in each of the two airports.”

Two months after its unveiling, the Minister of State then, Senator Sirika suspended the establishment of the project and he announced in September 2018 that the project had been suspended. “I regret to announce that the Federal Executive Council has taken the tough decision to suspend the national carrier project in the interim. All commitments due will be honoured,” Sirika said at that time.

Nothing significant happened in 2019 and 2020 when Covid-19 pandemic struck, but in June 2022, the Minister announced that the Nigeria Air Limited had received  an Air Transport Licence (ATL) from the Nigeria Civil Aviation Authority (NCAA). But before obtaining ATL, in 2021 the Federal Executive Council (FEC) had announced its approval for the commencement of the operations of the national airline in April 2022.

On the obtaining of ATL, Sirika said: “Nigeria Air Limited received from Nigeria Civil Aviation Authority Air Transport Licence, signialing the end of the beginning of operations of the airline. Commencement date of domestic operations will be announced in due course.”

Many Failures

The first promise of a national carrier by the Buhari’s administration was in 2015. The promise continued to 2016, 2018, 2021, 2022 and finally before the end of this administration on May 29, 2023. 

Last year the federal government announced the selection of Ethiopian Airlines as technical partner and core investor for the establishment of the planned national carrier, the Nigeria Air. It disclosed then that the selection of Ethiopian Airlines would put to an end, several months of speculations about who become the technical partner and core investor in Nigeria Air. This raised the hope of the Nigerians who looked forward to having another national carrier. 

But the plan to have the national carrier became clouded in another uncertainty when Airline Operators of Nigeria (AON) sued the federal government over the establishment of the airline over ownership arrangement and the allegation that it was styled to stifle other airline operators. With that litigation, it has become uncertain when the airline would really begin to operate.

However, during the National Aviation Stakeholders Forun held in Abuja last week, Senator Sirika assured that Nigeria Air must take to the skies before end of the Buhari administration.

“Operation of local and international flights will commence soon. Before the end of this administration, before May 29, we will fly. Negotiation meetings with the Ethiopian Airlines Group Consortium and the Federal Government of Nigeria are ongoing. Next step: Federal Executive Council approval of the Full Business Case,” Sirika said.

He identified the benefits Nigeria stands to derive from the establishment of the national carrier, which include reduced capital flight from Nigeria, maximisation of the benefit of Bilateral Aviation Safety Agreement (BASA) and Single African Air Transport Market (SAATM) and development of an aviation hub. he also said the National carrier will contribute to the country’s GDP, facilitate hospitality and tourism, facilitate growth and development of the Nigerian agricultural sector, and create jobs around the Agro-Cargo Terminals (which are yet to be established).

There has been nostalgia about Nigeria having another national carrier, especially among those who were comtempranous of the hey days of Nigeria Airways Limited (NAL), but looking at the current realities, some Nigerians are not positively disposed to the country having a national airline. Reports also indicate that many Nigerians have criticised the Muhammadu Buhari administration for seeking to start a new national carrier after the former national carrier, Nigeria Airways, collapsed largely due to corruption. Besides, the Ethiopian Airlines having 49 per cent of the stakes in the planned airline, there are no signs that the new carrier would not be enmesshed in corruption, even if government owns one per cent.

Litigations

There are allegations that many things about Nigeria Air are mired in secrecy. Key among these is the ownership arrangement. Ethiopian Airlines as stated earlier has 49 per cent and Nigerian private investors, Skyway Aviation Handling Company Plc (SAHCO), MRS and other institutional investors have 46 per cent, while the federal government has 5 per cent. But there have been a controversy trailing this ownership arrangement because it has not been confirmed the fiscal commitment of these companies to the planned airline and SAHCO is also in court with the federal government because it said that stakes were allocated to it from Nigeria Air while it was really interested in airport concession and had planned that it would win the concesion of the airport airport terminals.

Industry insider told THISDAY that the litigation against Nigeria Air would not likely be resolved before the end of May when the Buhari administration would vacate office.

THISDAY also learnt that whatever judgment from the High Court would be appealed by AON if it did not favour the association, adding that it is not likely that the Court would give judgment on the case soon.

He said: “But the question is, how much is Ethiopian Airlines bringng for the 49 per cent stake of the Nigeria Air it has? May 29 is two months away, what is the capitalization of the airline? How much is Nigeria getting from the Bilateral Air Service Agreement (BASA) that has been ceded to the airline and credit guarantees and tax holidays? Airline that will start in two months should have brought some money from that shareholders or are they coming into Nigeria to plough it, to rip it off.”

The insider reasoned that it would be better if the federal government declared 100 per cent ownership of the company and give it full funding because as at now, no money is coming from any other place; government has been funding the project since is started the implementation of that project.

“Let the federal government own the company 100 per cent. The names of the others should be removed because invariably the federal government has been financing the project, giving the airline tax holiday and guarantee and even allowing double bidding of the company ownership,” he said.

Aggressive Ambition

Reacting to the newly assured date, industry stakeholder and the Managing Director of Flight and Logistics Solutions Limited, Amos Akpan, described the promise made by the Minister as aggressively ambitious.

“The statement by the Minister of Aviation is aggressively ambitious, viewed from what we know and see on the ground. Maybe the Ministers knows things the rest of us in the industry do not know. There are unresolved matters on the ground. There are regulatory procedures to fulfill. There were deadlines that we didn’t meet; and pronouncements from the same Minister that didn’t happen as he said on the same subject. The time is short and I think it is unrealistic,” he said.

Rating the minister on the Aviation Road Map, which chronicled what he wanted to achieve in the last eight years in the industry, none of which has been completed achieved, Akpan said that the national carrier remains work in progress.

“My rating is to state exactly what I have seen on the ground compared to what the Minister promised seven years ago. On the national carrier, I have not sighted the contract or the site for construction of the national MRO (Maintenance, Repair and Overhaul). On manpower and training, I have not seen pilots use the simulator at NCAT (the Nigeria College of Aviation Technology), neither have I noticed the filling of manpower gap between NCAT and operators in the industry (government and private). On aircraft leasing and finance company, there is no existing leasing company for industry financing. In the area of building airport cities (aerotropolis), there is no existing aerotropolis city and on the national carrier again, no aircraft, no schedule, no station personnel and infrastructure for Nigeria Air except offices in Abuja airport. The Minister does not seem to consider the existing case in court while making his pronouncements,” he said.

On aerospace university, which was also part of the Aviation Road Map, Akpan said there is no governing board, no offices for aeronautical university, non existing academic faculty or program, no NUC (National University Commission) accreditation, but gave kudos to the Minister on the new airport terminals and noted that the MMIA new terminal launched, opened, functional but grossly underutilized.

Akpan said: “The Cargo terminals are in the same status as it were in 2014. SAHCO and NAHCO (Nigeria Aviation Handling Company Plc) have acquired new equipment, which has improved their capacity and impacted their performance. But the cargo terminals have become rowdier and less efficient in processes. The security surveillance installed in our airports makes tracking of criminal activities effective. The aviation unions do not agree on the (airport) concession as they have gone to court. There is no clarity on the position of current and existing concessions. The Executive Secretary of Aviation Round Table (ART) and aviation security expert, Group Captain John Ojikutu (rtd), told THISDAY that he was doubtful of the realization of the national carrier project since 2018.

Ojikutu said: “I have my serious doubts and that has been my position since the Minister’s moves in 2018. If ever it does, not many intercontinental routes will be available if we are still keeping the foreign airlines monies. Even if we pay this monies, how many countries have we normalised the plans to operate with or submitted our operational plans with for acceptance? The airline would die same way the Virgin Nigeria died immediately a new administration comes in. This is what I see on the government airline owned by those in the administration of government and not a national carrier owned by Nigerians. By the way, why is it that the Minister representing only five per cent ownership is the only one doing the show? Where are the representatives of the remaining 46 per cent?”

Two months to the end of the Buhari administration, Nigeria Air is yet to secure Air Operator Certificate (AOC), but optimists are still looking forward to the new airline.