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By Cosmas Omegoh, Christy Anyanwu and Agatha Emeadi
Controversy is trailing the proposed new national carrier scheduled for launching in April 2022 by the Federal Government.
Key stakeholders in the Aviation industry have been reflecting on the rational, ownership, and other operational issues that might shape the corporate life of the new outfit.
Questions around these key issues are generating debates that leave opinions sharply divided.
For long, many Nigerians have been awaiting the return of a new national carrier like the defunct Nigeria Airways which ceased operation in 2003. The airspace abandoned by the erstwhile carrier was quickly taken over by other countries’ airlines. They now make huge profits from their Nigerian passengers which they repatriate to their home countries. These worries have particularly left concerned Nigerian stakeholders watching helplessly; they wish a national carrier will be birthed to give the foreign airlines a good run for their money.
Recall that plans for a new Nigerian airline have been on the table since 2015 when President Muhammadu Buhari came to power.
In July 2018, for instance, the Minister of Aviation, Hadi Sirika, at an elaborate ceremony at the Farnborough International Airshow in London, unveiled the Nigeria Air as the national carrier.
The new airline he said would require between $150 million and $300 million as share capital when it comes on stream.
But shortly after the London show, everything about the proposed airline and the fanfare that accompanied it fizzled away as quickly as they occurred, leaving aviation pundits pondering over the development.
From then, nothing has happened until on November 24, 2021 – three straight years after the project had been in limbo – when the Federal Executive Council rose from its meeting to announce its approval of the April 2022 date for launch of the airline it said would run by a private company.
According to Sirika, the Federal Government would hold five per cent equity; Nigerian entrepreneurs would be offered 46 per cent, while the remaining 49 per cent would be reserved for some unnamed strategic equity partners.
This new development went on to unleash excitement in the air – which has continued to grow – as many wait with bated breathe for the proposed airline’s planes to take to the skies.
But you are dead wrong to believe that every Nigerian is excited by the Air Nigeria project.
With the launch date appearing sacrosanct, stakeholders have been examining the national carrier idea again and again, pointing at the key issues they strongly feel might make or mar the company’s take off and even the future.
National carrier good, long over due
Some stakeholders are upbeat that Nigeria ought to have for long, re-floated the defunct Nigeria Airways or another firm.
Chike Ogeah, a lawyer and former Managing Director of Skyway Aviation Handling Company Limited (SAHCOL) believes that “it’s good to have a national carrier,” which must be private-sector driven, insisting that its managers need to entrench transparency for it to succeed.
He cited the example of “Rwand Air, Ethiopian, Kenya Airline, and even South Africa Airline,” explaining that “they are all private-sector led, but backed up by governments.
“Government should give them the kind of guarantee they need to buy spare parts and, buy planes; these are the key roles government should play at the background.
Shareholding issue
“But the actual shareholding and the running of the aircraft should be left for the experts at a time like this for national prestige. “Aside from that, as one of the engines of growth of modern economy, if a nation is governed right, aviation will be the major area that the country will get the best growth. But if it’s not done well, it will be disastrous because it is a very cost-intensive sector. All the funds must be applied judiciously and judicially to ensure that those goals and milestones are enunciated. It’s not something you just throw the ball down the road and expect everybody to start running after it, which in my mind is what is happening now.”
For Mr. Supo Atobatele, former General Manager, Nigeria Airspace Management Agency and publisher, Air Transport magazine, the idea of a new national carrier is “a project that had been delayed for long, the country is overdue for a national carrier.
“When this government came in almost six years ago, it was part of its agenda; the president announced that there will be a national carrier.”
Explaining the idea behind a national carrier, he said: “When we are talking about a carrier, we mean a carrier with our national colours.
“There are two types of carriers: we have a national carrier, and we have a flag carrier.
“Flag carriers are designated carriers on international routes. You can only see the flag of the nation on it, but when you are talking about national carrier, it’s a carrier that gives people in the Diaspora a sense of belonging.
“Some African nations that are not as big as Nigeria in terms of population and market, for instance, Rwanda, Cote d’ Ivoire, Kenya, Botswana – all have national carriers; South Africa has a national carrier; Uganda just launched her own national carrier last year.
“So, what we expect now is fast implementation, because Nigerian travellers are suffering. They are at the mercy of the foreign carriers. What do I mean by this? The foreign carriers just come up with all sorts of prices on their various routes and who are the flyers? They are Nigerians.”
He lamented how shabbily Nigerians are treated by some of the foreign airlines, adding “but once we have our own national carrier, we will have a sense of belonging. The national carrier will dictate the market price. A national carrier flying on London route might want to charge N250,000 as against $400 or $500 that others are charging; so others will be forced to come down to N250,000 because that national carrier is going to give equal service to travellers.”
He recalled the good days when Nigerian Airways was in operation, and how “it was regulating the market without making any noise.”
Let carrier start now
Mr Atobatele believes that the right time for the proposed airline to start operation is now, urging that there should be no delay.
“They can lease four to five aircraft and put them on international routes, then two or three on domestic routes. By the time they operate for two three years, then they will become a beautiful bride; technical partners will come for them.
“We were supposed to have started this national carrier almost five years ago; it doesn’t take time. The Federal Government has the capacity and the money.
“We have been given April next year date; let’s see how far the Federal Government can go, hoping they will not come up with another excuse,” he said.
National carrier good, but…
For Comrade Ocheme Abah, Secretary General of National Union of Air Transport Employees (NUATE), “Nigeria is ready and ripe for a national carrier. But the way this very one is being packaged is not very clear.”
His argument is that “we do not want a national carrier that will be competing with local airlines on domestic routes which is what they said they would do at the earlier time.
“We are not lacking airlines at the local level. I thought we were thinking of an international carrier that will compete with the likes of Emirates, British Airways, Quatar, Lufthansa, to reduce the capital flight we are recording through the airlines. We do not want a national carrier that will be competing with Air Peace, Arik, Aero, Azman airlines, among others; with that, we cannot escape capital flight because these foreign airlines, even when they make money in naira, they will still have to repatriate it in dollars.”
Doubts over national carrier
However, Comrade Abdul Rasaq Saidu, Secretary General, Association of Nigeria Aviation Professionals (ANAP), is emphatic on the idea of a “national carrier in two months’ time or so,” is a huge joke.
“It is never feasible,” he maintained, adding “I think it is the dream of the persons saying so.”
Comrade Saidu believes the idea of a new national carrier is something of a wild goose chase.
“What I feel about it all is that some people just want to be in the news. That is the reason they talk whatever they like, and that is what is happening in this case.”
He said spending huge sums of money on the launch of the carrier in London last time and the latest announcement of the airline taking off next year do not add up.
“One must ask these questions: where is the operational base of this national carrier? What brand of aircraft are they going to use? Where is their hangar, their maintenance hangar – because running an airline you must have a place for the maintenance?
“It is a very good thing; we are looking forward to it, but the process and the way it’s being handled – to many of us – is not transparent, and I don’t think they are sincere to the citizens.”
Questions about Nigeria Airways
Saidu demanded an inquest into the defunct Nigeria Airways, declaring that “it was wrongly liquidated by the Chief Olusegun Obasanjo administration. We have challenged that; we have asked questions. What is the value of Nigeria Airways? How much did they sell it? The company’s assets that were creating problems, what is the worth both in Nigeria and abroad? Nobody has answered us.”
He is insistent that “until those questions are addressed, I don’t think any national carrier can be fruitful.”
He, therefore, expressed lack of confidence in the new outfit, recalling that “we have told the National Assembly (about the new carrier but) they are just dilly dallying around it – going clockwise and anti-clockwise.
“People like us, don’t have any faith in the project with the way it is being handled. Even though we want it, I don’t think it will be feasible.”
He noted that “it may be feasible in future but from the look of things, not now.
Then he added: “If Nigeria is sincere in fighting corruption, and the people want to fight corruption in the Aviation industry, they should start with the liquidation of the Nigeria Airways.”
FG’s involvement raises credibility issues
Although Ogeah says the idea of a new national carrier is laudable, he believes there are unresolved credibility issues around the project – all because of the Federal Government’s involvement.
He says: “I think the most important thing we have to determine is: what type of carrier do we want to have? Is it a national carrier or flag carrier, because they are two different things.
“A national carrier to my mind, is something the government plays a dominant role in, and from what we have heard, this is not so. Government is just going to have five per cent of the shares, and the Nigeria public, I think will have 46 per cent. That means the government and the Nigerian-investing public will have 51 per cent, which is majority.
“Then the foreign partners whether individual or institutional major shareholding would have 49 per cent. That to an extent makes the carrier a wholly-Nigerian affair because they have the majority shareholding. As per government role, that’s where a few of us have a problem.
“Government is the one setting these things up on its own terms, doing everything it’s doing about floating an airline. We don’t see enough openness regarding what government is doing.
“We are saying that government should open up that process a little for us so that the unions, stake holders in the industry can be actively involved to know exactly where we are going to. These are exactly the kind of concerns I have.”
Similarly, Group Captain John Ojikutu (rtd) former commandant, Murtala Mohammed International Airport, is worried about the premise on which the new national career will operate.
“We lost the track long ago,” he says. “We have a lot of unanswered questions like: are we setting up a national career or a government career?
“Interestingly, before the end of 2019, the minister talked about starting this project and they said the Federal Government would buy five per cent shares, and as a stakeholder, I asked ‘who then takes 95 per cent of the share capital? It is a question that has not been answered till date.
“The next was that we are starting a new national carrier with three lead-aircraft which is very worrisome. The people that will buy the 95 per cent, are they aware and have they approved of it? If they are, they should be discussing it.
“Then again, we heard of foreign technical partners who are investing 49 per cent shares. Who are they? Who are the Nigerian investors? These are the people that should be talking about national carrier, not government with five per cent capital shareholding.
“If government is taking five per cent out of 51 per cent, who then takes the remaining, 44 per cent shares in Nigeria? We have not heard all that; so why are we sure that the airline will take off next year?”
Left to him, “people are not being sincere with some of these issues and facts.” He insists that “as far as I am concerned, there is so much announcement about hurried spending – and all points towards the forth coming election.
“The Federal Government should forget about the national carrier if they are not going to get people with the main shares, and thereby get it right.”
FG’s involvement makes it govt carrier
Ojikutu warned that “if in all sincerity we are having a national carrier, the foreign partners or foreign investors should not have more than 40 per cent with Nigerian investors following closely with not more than 30 per cent, the government taking five per cent, while the remaining ones will go to the public at the stock market.
“When we discussed this with some stakeholders, they all agreed that it is a national carrier; but the way the Federal Government is going about it now, it is no longer a national carrier, but rather government carrier. And if it becomes government airline, it is pointing to the era of Nigeria Airways that was turned from national carrier to government airline.”
In the same vein, Comrade Abah raised issues of concern about the Federal Government’s looming involvement in a venture it ought to be a junior partner. Listen to him: “The issues around the national carriers are a bit hazy for the Aviation industry.
“Why should the Federal Government that will only own five per cent of the shareholding be the one spending to put the company together? Why is the least shareholder be the determinant factor in giving the company its name, deciding the type of aircraft that the company would use, including list of names of management, shareholding etc?
“I don’t know any business outfit that is set up in this manner.
“Another bothering issue is why a company whose foreign investors own 49 per cent shareholding should be called a national carrier? What then is national about it?”
He also contended that “assuming a Nigerian entity owns about 51 per cent equity, there might be some level of ownership. How then does a Public Private Partnership (PPP) operate under an ICRC Act? How does it fit in?”
