Five weeks ago, the Federal Executive Council approved April 2022 as the take-off date of Nigeria Air, the proposed new national carrier.
Hadi Sirika, Minister of Aviation, said the Federal Government would own only five percent equity in the airline while other Nigerians would get 46 percent.
He disclosed that strategic partners, including foreign airlines, would be identified to take up the remaining 49 percent equity.
Sirika also made it known that Nigeria Air will commence operations with three wet-leased aircraft.
He said leasing would be the arrangement pending when the company ordered new planes.
He added that it would take about three to five years to get an ordered aircraft delivered.
“They will start with wet-leased aircraft and that’s how 90 percent of airlines in the world would have started. So they will start with a wet-lease of three aircraft and then continue to expand, place orders and then get deliveries,” he said.
Wet-lease is an arrangement covering the hire of an aircraft, including the provision of a flight crew and sometimes fuel.
Sirika stressed that the federal government would not manage the carrier, rather investors in the carrier would run the business.
About four months to the announced date of commencement of operations, the technical partner has not been mentioned, there is no personnel, there is no investor and physical or technical structure on the ground currently to make this a reality.
Before an airline is considered ready to commence operations, it must have gone through the five different stages of acquiring Air Operating Certificates for local flight operations from the Nigerian Civil Aviation Authority and these stages take between one and three years, depending on how satisfied the authority is.
In addition, the airline must have readied its aircraft, whether leased or purchased; it must have four key technical staff, some that include the chief pilot, chief operations officer, maintenance officer and chief engineer, and must have an operational base.
As at press time, investigations show that the country’s prospective national carrier currently has not met any of these criteria, and industry stakeholders have expressed concerns as to how the airline hopes to kick off in four months’ time with none of these structures on the ground.
“Any attempt to set up or continue with the planned national carrier will lead Nigeria to a government carrier that will end up the way of the Nigeria Airways
Olumide Ohunayo, an aviation analyst, said he was surprised to hear the minister announcing April 2022 as the take-off date for the national carrier because the airline has no structure or investor in place.
“In four months, how does the minister hope to go through the five stages of the AOC and fly in April? This will be a miracle, and this has confirmed the fears of the industry that the airline will be favoured, allowed to override the system and processes and will bully the regulator and all other participants in the industry,” Ohunayo stated.
He stressed the need for a level playing field, saying that whatever structures, systems, processes, or checks and balances other investors are subjected to, it must also be the same for investors of Nigeria Air.
“Why will a five percent holder be the one deciding on the fleet to be used, routes that will be operated, take-off date and other operational issues? These should be determined by the management and board of the airline, which are not yet in place,” he said.
John Ojikutu, aviation security consultant and secretary-general of the Aviation Safety Round Table Initiative, also argued that a five percent shareholder cannot plan and dictate to the rest having a 95 percent stake.
Ojikutu said any attempt to set up or continue with the planned national carrier will lead Nigeria to a government carrier that will end up the way of Nigeria Airways.
“There is nothing on the ground to show that Nigeria Air can take off and land by April 2022,” Ibrahim Mshelia, owner, West Link Airlines Nigeria and Mish Aviation Flying School, also noted.
Mshelia said whether Nigeria will use leverage or get incentives, the time is too short and it is unrealistic for the national carrier to commence operations in four months.
Tilmann Gabriel, the transaction adviser to the government for the national carrier, said efforts were ongoing to ensure that the airlines were certified.
“A lot of work has been done and it did not start today, rather it started three years ago. An Air Operator Certificate is to be applied for in the next couple of days from the NCAA, which is the regulatory authority,” he said.
We recall that the Nigerian aviation industry was never in the news without mentioning the defunct Nigeria Airways, which used to be the country’s national carrier and at some point, was the only airline in the country.
However, the once bright Nigeria Airways abandoned the skies due to poor corporate governance and mismanagement, leading to a financial crisis, which made it cease operations in 2003.
Following an extended period without a functioning national carrier, it dawned on the government to encourage private sector participation. This led to the joint venture partnership between the Virgin Group and local investors in 2004, birthing Virgin Nigeria Airways, which replaced the former Nigeria Airways. Amidst changing names from Virgin Nigeria to Nigerian Eagle Airlines and, finally, to Air Nigeria, the partnership was unsuccessful due to persistent government interference, leading to a collapse in 2012.
The timing of the Nigeria Air project appears unfortunate as the emergence of the Omicron Covid-19 variant is already igniting travel bans across the world. This will possibly dampen the revenue assumptions if operations commence at the said date, April 2022.
Also, given the stages required to complete the transaction process, we believe the April commencement date may not be possible, more so as 2022 is a pre-election year that is usually characterised by a focus on election campaigns to the detriment of project completion.
We see no need for any hurry. In our view, the government needs to take effective steps to identify and prevent the obstacles that have led to previous failures.