December 25, (THEWILL) – The April 2022 date for the commencement of a new national carrier by the Federal Government received mixed reactions from players and stakeholders in the Nigerian aviation industry. In this piece, ANTHONY AWUNOR looks at the feasibility of the proposed date...CONTINUE READING
President Muhammadu Buhari’s campaign promise in 2014 to give the country a new national carrier had rekindled hope in the possibility of having a carrier that can compete favourably with the likes of Ethiopian Airlines, South African Airways and others on the continent.
Also, the emergence of Sen. Hadi Sirika, a politician with considerable experience in aviation, as the Minister of State for Aviation and later as Minister of Aviation, raised further optimism, while the ranks of pessimists dwindled.
In the first quarter of 2016, at the maiden Stakeholders’ Briefing held by Sirika in Lagos, he mentioned the birthing of a national carrier as one of the cardinal objectives of the new administration and by July 18, 2018 at the Farnborough Airshow in United Kingdom, he promised that by December of that year, the government would gift the nation a new national carrier with only five per cent shares from the government, while the other 95 per cent shares would go to the public.
But, like a pack of badly arranged cards, the arrangement fell through, just a few weeks to the due date, after the minister had unveiled the name (Nigeria Air) and logo at the airshow.
Since then, not much was heard about the project apart from its annual inclusion in the yearly budget proposals to the National Assembly, which swelled to about N7,304,000,000 (N7.3 billion) with the 2022 budget proposal sent to the assembly.
In the last three years, N6 billion had been set aside as “ongoing” sums for the project and another N704 million as “consultancy” fees for the project within the same period.
However, last month, Sirika shocked the world when he vowed that by April 2022, Nigeria would be gifted with a new national carrier.
Sirika had said that the new airline would have 51 per cent of its equity shares owned by the Federal Government and people, with foreign partners having the remaining 49 per cent.
He reiterated that the Federal Government would not have more than five per cent stake in the new national carrier, while it emphasised no fewer than 70,000 jobs would be generated with the birth of the airline.
The pronouncement, expectedly received mixed reactions from stakeholders and analysts in the sector
Some of the industry analysts insisted that the project lacked transparency from the beginning and projected that if the carrier eventually flies, it would fold its wings within a few years of operations.
Engr Femi Adeniji, Chief Executive Officer (CEO), Tropical Arctic Logistics (TAL), warned that the project may eventually be a failure.
According to him, the way Sirika was pushing for the establishment of the airline seemed like a personal project, rather than a national interest project it was meant to be.
Adeniji wondered how a government, which intended to have only a five per cent stake in an airline, would dictate the terms for the expected 95 per cent shareholders, insisting that Sirika wanted to use the airline to fulfill a political ambition.
He said, “Dead on arrival if the Honourable Minister of Aviation wants to be sincere with himself and the country. I see this project as personal interest for his political ambition and not a national interest. How do you operate or dictate operation with only five per cent shares? Who is fooling who?
“The Chinese I understand are the foreign shareholders. So, they know what they are doing. The more you look, the less you see. All the government is doing is trying to show the Nigerians they fulfill their campaign slogans creating room for whoever runs on the All Progressives Alliance (APC) ticket. That’s the reason I said “do not listen to what they say, but to what they do.”
Mr Olumide Ohunayo, Head, Research, Zenith Travel, expressed surprise at the April 2022 take-off date.
Ohunayo explained that barely six months to the take-off date, there were no structures on ground to indicate the government’s readiness, while its expected investors; local and foreign remained unknown to the public.
He explained that the airline was expected to go through the “rigorous” five stages of obtaining Air Operator’s Certificate (AOC) with the Nigerian Civil Aviation Authority (NCAA) within the same six months period, describing it as a “miracle,” which was meant to favour the impending new national carrier at the expense of other existing airlines.
The five stages of AOC acquisition are Pre-application, Formal Application for intending entrant where documents and manuals must be submitted for evaluation, Document Evaluation, 50 hours Demonstration Flight and Inspection, while the fifth stage is the Certification Phase where the NCAA issues the AOC with the appropriate specifications and ratings.
“That will be a miracle and that has also confirmed the fears of everybody in the industry that an airline is coming that will be favoured and be allowed to override the systems and the processes that will bully the regulator and other participants in the industry.
“Invariably, this airline will bypass the system and ensure it flies with or without the inputs of the regulator. It shows something is wrong somewhere.
“NG Eagle has been on ground with three aircraft and structures, but still has its AOC processes suspended. I am sure this AOC will be released after the take-off of the Nigeria Air. We want more airlines in the industry, we welcome more investors in the industry, but we want a level playing field and whatever structures, processes and plans that you give to other investors, must also be given to the investors of Nigeria Air. Hadi Sirika is quick in decision making. He should put the nation before himself,” he said.
Besides, Grp. Capt. John Ojikutu (retd), CEO, Centurion Securities Ltd, wondered why the shareholders and their value shares had been in secrecy over the years since the government commenced the move for it.
Ojikutu also queried the monetary values of the five per cent, 49 per cent and the 51 per cent stake of all shareholders.
“What are the immediate technical contributions including fleet of the shareholders from these values? How many aircraft for a start and are there provisions for their procurement or supply? Where would the technical crew come from? Where will the airline be based between Lagos and Abuja? Are there provisions for their parking and routine maintenance at these airports where aircraft parking areas have been creating challenges to the Federal Airports Authority of Nigeria (FAAN)?
“Even, if all these have been taken care of, what is the level of the NCAA survey and preparedness for the start of operations to enable AOL and AOC to be issued? Is the minister aware that each aircraft in the fleet and crew must undergo test rides with the NCAA inspectors or are these going to be waived for the new airline? He queried.
But, Mr Chris Aligbe, CEO, Belujane konzult, expressed optimism about the success of the carrier.
Aligbe, in an interview with journalists recently, emphasised that the Federal Government was on track with the proposed national carrier and date.
Aligbe who was also the General Manager, Public Affairs of the defunct national carrier, Nigeria Airways, said that the new airline may be given accelerated attention because it is being driven by the state.
He also pointed out that the fact that Sirika made the announcement for the new national carrier last week, it didn’t mean the processes for the airline were just beginning, stressing that this would have started a long time ago.
On the five per cent stake of the Federal Government and trust by investors, Aligbe insisted that government’s involvement would drive investors’ confidence in the airline.
He said, “All agencies of the state that are supposed to provide the necessary instruments for it are on duty – the NCAA will be on duty to do that. Because it is a state thing, they will handle it at that level. It should be faster than usual; that is what I think. It is not a question of an individual trying to float an airline, there are so many things he will have to learn, but when the agencies are also involved, there is no learning to be done in order to facilitate such things. For me it is not an issue.
“But now, the project has gone through six approvals by the Federal Executive Council (FEC) and if FEC has given it six approvals, including approvals of funds, initial Outline Business Case (OBC), Transaction Advisers and money to be paid, then, the initial thing that happened will not happen again.
