Nigeria – New National Carrier

Amid the excitement, airlines and experts raise concern over competition with existing airlines.

After 15 years of operating without the country’s own branded airline, the federal government on July 18th unveiled Nigeria Air, billed to be launched at the end of 2018, Leadership reported.

The defunct Nigeria Airways, which was inaugurated in 1959, stopped operation in 2003. According to reports, the national carrier was plagued by mismanagement, corruption and overstaffing at the time of closure and had debts of more than US$60,000,000, equivalent to $78,115,051 in 2016.

As he unveiled the name and logo of the new national carrier at the UK’s Farnborough International Airshow, Minister of State for Aviation, Senator Hadi Sirika, explained that government will own a maximum of 5% of the airline and will not be involved in its running.

Sirika said unveiling the airline at the Airshow – the largest congregation of global aviation industry players – was intended to market the airline to prospective investors and register it in the minds of stakeholders ahead of its formal launch to take place in Abuja before the end of 2018.

“This will be a National Carrier that is private sector-led and driven. It is a business, not a social service,” Sirika said. “Government will not be involved in running it or deciding who runs it. The investors will have full responsibility for this and the Nigerian Government will not own more than 5% (maximum) of the new National Carrier.

“It is not intended to kill any airline in Nigeria but complement it and promote it,” he added.

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A Nigeria Airways Airbus A310-200 in experimental livery, 1994. Image: CC 1994

The airline is designed to operate on at least 91 routes, out of which 41 are international, according to Lagos-based The Guardian.

Airline operators and experts in aviation on July 19th welcomed the development, though with concerns over the fate of local carriers once the new airline begins operations.

The stakeholders, at the 22nd aviation annual seminar and awards held in Lagos, were unanimous that the whole process is still ridden with confusion, with government not having defined the mode of operations and grounds for fair competition.

Chairman of Air Peace, Allen Onyema, stressed that the new carrier should be made to operate transparently, with regulators giving a level playing field to all. “If the airline will be used to frustrate the hard-earned successes of existing airlines, then we all will be against it,” he said.

“Government has said that it is going to be a private business. It has to operate side-by-side with other airlines. So, if the new airline goes to London, no local airlines should be stopped from the route, once it has the capacity,” Onyema said.

CEO of African Aviation Services Limited, Nick Fadugba, observed that with Nigeria Air coming on board while Arik Air and Aero Contractors are already under the control of the Asset Management Corporation of Nigeria (AMCON), “it means the government owns three airlines and I don’t know any country in the world where that is done.”

He regretted that the government had not first sat with the airlines’ operators to discuss the implications, routes and sustainability impact of the new national carrier before the launch.

Former Managing Director of the Nigerian Airspace Management Agency (NAMA), Capt. Roland Iyayi, said Nigeria Air would get rear operational privileges that private carriers don’t get overseas because the Federal Government would do everything to ensure the national carrier succeeds.

According to Iyayi, what is prevalent in the sector is not strategic but destructive competition and policies. “Now, we have put the cart before the horse; setting up a national carrier before addressing the destructive existential policies that are killing the airlines in the first place.”

Aviation unions threatened to stop the birth of Nigeria Air a few hours after the aviation minister unveiled the name and logo, according to Nigeria Daily Post. Olayinka Abioye, General Secretary of the National Union of Air Transport Employees (NUATE), warned that until the government paid the final severance package of the staff of the defunct Nigeria Airways, the unions would ensure that the plan did not come to fruition.

Meanwhile, Jude Egbas writing for Pulse NG implored readers to support the venture.

“The pitfalls for Nigeria Air are staring us all in the face, but [they] are avoidable as well. In the end, what will make Nigeria Air a sustainable business operation wouldn’t be pseudo or faux patriotism – it would be the commitment of all stakeholders to actualising the vision, warts and all,” Egbas wrote.

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Find out more in the Africa Research Bulletin: 

NIGERIA: Boost to Anti‐Corruption Hopes
Economic, Financial and Technical Series
Vol. 55, Issue 5

NIGERIA: World Bank Economic Update
Economic, Financial and Technical Series
Vol. 55, Issue 4

AIRPORTS AND SERVICES: Single African Air Transport Market
Economic, Financial and Technical Series
Vol. 55, Issue 4

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