….Says national carrier granted 5 years tax waiver, others
By Chinelo Obogo
Minister of Aviation and Aerospace Development, Festus Keyamo, has expressed concerns over aspects of the deal signed between his predecessor, Hadi Sirika on behalf of the Federal Government and Ethiopian Air over Nigeria’s proposed national carrier.
Speaking after this week’s Federal Executive Council (FEC), he said that among the terms of agreement between the Nigerian government and Ethiopian Airline, which was the major investor in Nigeria Air, was that the national carrier would be given a five-year tax waiver, a move he said would have destroyed domestic airlines.
He stated that critical details of the agreement with Ethiopian Airlines required reevaluation, citing concerns about staffing arrangements and the potential for creating a monopoly at the expense of other local airlines. He said that his responsibility as a minister is to address stakeholders’ concerns and underscored the need to ensure a fair evaluation of the situation.
He said that he had submitted his observations to President Bola Tinubu, who will determine the next course of action regarding Nigeria Air.
Nigeria Air, founded in 2018 with ownership stakes divided among Ethiopian Airlines (49%), Nigeria Sovereign Investment Authority (NSIA) (46%), and the Nigerian Federal Government (5%), received its first aircraft in May 2023 but has since remained inactive.
Besides the issue of tax waivers, Keyamo pointed out a proposal in the agreement allowing Ethiopian Airlines to appoint personnel at all levels within Nigeria, which could lead to a scenario where ET controls top management positions.
“Now we have looked at all the issues and it’s before Mr. President. But let me just give one or two snippets because of Nigerians who are quick to judge.
“In the agreement, you are giving tax waivers to Ethiopian Airline coming into Nigeria. They asked for tax waivers for five years and you granted them, to come and compete with your local airlines who are paying those heavy taxes. How? You want to create a monopoly? That’s why when they tell you that we want to crash price by… it’s a lie. It’s robbing Peter to pay Paul.
“Because they have removed all taxes from you and you’ve granted them tax waivers, initially they will crash prices, but once you’ve driven every other person out of the market, you’ll now have a monopoly, then you can now hike it 500%, nobody dares to challenge you.
“The only thing that brings down prices in the commercial world is fair competition. In the agreement, they also made a proposal that they will appoint everybody; top management, everybody Ethiopian, in Nigeria, and we agreed. We agreed.
“I’m just giving you snippets. I’ll do a full interview, I’ll not give more. So when I’m ready to talk, I will talk, but I cannot preempt Mr. President. We have raised all the concerns before him,” he said.
During a recent tour of the airports in Lagos,
Keyamo announced that the Nigeria Air project which is currently in a legal tussle between the Airline Operators of Nigeria (AON) and Sirika was suspended pending a thorough review of the terms and conditions of the deal. He also announced the suspension of the concession of Abuja and Kano international terminals, saying he would have to go through the project to ensure that the interests of Nigerians are protected.
Last year, the AON dragged Sirika to court asking the it to stop the national carrier deal and withdraw the Air Transport License already issued to Nigeria Air by the Nigerian Civil Aviation Authority. The AON also claimed that the firm which served as transaction adviser for the transaction was incorporated in March last year and alleged that the company was linked to the aviation minister.
The local airlines further alleged that the ATL issued to Nigeria Air did not pass through the normal security clearance. According to them, the federal government’s partnership with Ethiopian Airlines on the project would send domestic airlines out of business by opening up the domestic air travel market to Ethiopian Airlines.