Three years after the project of a national carrier was first mooted in recent history, the federal government has said that some private investors are going to raise N102.75 billion ($250 million) for the take-off of the proposed national carrier.
This pronouncement is coming after the initial failed attempt almost 3 years ago to launch the proposed national carrier for the country.
The disclosure is contained in a document on the updated status of the government’s aviation roadmap at the Federal Ministry of Aviation, Abuja on Wednesday.
The Aviation Ministry stated in the document that the project development stage for the national carrier has been completed and as such, the procurement stage is the next step to be taken.
The statement from the document says, “The next set of steps will involve the commencement of procurement phase by placing an advert for a request for qualification in the national dailies and the foreign media. USD250 million approximately is to be raised to start up the airline by private investors.”
According to the aviation roadmap which is contained in the document, the Federal Government explained that the establishment of a national carrier would enable Nigeria to gain optimal benefits from Bilateral Air Service Agreements (BASA), take full advantage of the Single African Air Transport Market and introduce competition.
It states, “The national carrier project will be private sector-driven, with the government holding not more than five per cent of the shares.
However, in a phone conversation with NATIONAL ECONOMY, a former military commandant of the Murtala Muhammed International Airport (MMIA), Group Captain John Ojikutu (Rtd.) said the sum of $250 million can barely buy three new aircrafts for the BASA route, as you can hardly get a new aircraft for less than $100 million.
Ojikutu said he had advised the government in times past to get technical foreign partners to invest between 35 and 40 per cent into the national carrier project, get credible Nigerians to invest another 30 per cent, the federal government invest at most 10 per cent, and private investors from the stock market should invest the rest of the capital. Subsequently, Nigerians can buy the shares of the foreign partners to have a full national carrier.
He said the least amount that would be required to start a national carrier at the moment would be $1 billion, which the federal government could not afford at the moment. He added that if the federal government is not ready for a national carrier then it should support a flag carrier instead.
Also in a telephone conversation with NATIONAL ECONOMY, Captain Dele Ore said government support for a national carrier would portend some form of protectionism. He however said the government should take a quick stand to commence operations of a national carrier but should allow private investors to run the show.
The report said the private sector consortium may comprise reputable international airlines (such as Qantas), leasing companies, aircraft manufacturers (OEMs), financial and institutional investors.”
The government said it was providing the required support by creating the enabling environment in terms of sustainable policies, allocation of BASA routes, provision of financial guarantees and ensuring fiscal incentives to sustain the success of the airline.
In July 2018, the Minister for Aviation, Hadi Sirika, at the Farnborough Air Show in London, had unveiled the proposed new national carrier called Nigeria Air and stated that it would be inaugurated by the end of 2018.
This generated a lot of controversies as many Nigerians questioned the use of public funds to set up a private business and had doubts over the ability of the government to manage the airline after the liquidation of government-owned Nigeria Airways.
The federal government, in 2018 announced the immediate suspension of its widely publicised national carrier due to the alleged non-approval of the airline by the Economic Management Team (EMT) when it launched.
The EMT was also reported to have recommended that public funds should not be used to set up the national carrier.