Stakeholders Doubt Viability Of Nigeria Air Project

10 months to the expiration of the administration of President Muhammadu Buhari, stakeholders have expressed pessimism that the Nigeria Air project will debut in the life of this administration as has been heralded.
The national carrier, which aviation stakeholders have said is a white elephant project, is yet to see the light of the day despite all the amount the government has expended on it.
According to them, from 2019 till 2022 appropriation bills, the federal government has appropriated over N12.6billion as working capital for its expected national carrier.
In the 2021 appropriation bill presently before the National Assembly, the government had earmarked N1billion as working capital for the airline.
In 2019, the government budgeted N8 billion as working capital despite the suspension of the project as well as another N500m for transaction advisers. In 2020, N4.6 billion was provided in the budget as working capital.
The ministry of aviation, also proposed to pay the sum of N250 million as consultancy fee for the establishment of the national carrier in 2021, while N304 million was appropriated for that purpose in the 2020 budget.
Speaking to NATIONAL ECONOMY, the secretary general, Aviation Round Table Initiative (ARTI), Capt. John Ojikutu (rtd), said the national carrier is a still-born project that won’t see the light of the day, to talk less of being profitable.
According to him, he has shown his objection to the birthing of a national carrier publicly, saying it a political class spending.
He said, “I am not too surprised about the hawking of the National Carrier going on today in an election year. All the political office holders’ spending comes up only about quarter to go or in election year.
The N19.5billion intervention funds for government agencies came in 2007 election Year; N200billion intervention funds for private airlines came in 2011 election year; request for N64billion for Abuja second runway came in 2015 election year; though rejected, but came out as N5billion for the Abuja runway repairs.
Ojikutu continued, “$338million request for the national carrier in the 2019 election year was rejected or better still, stood down by the FEC in November 2019. I am not surprised about the stillborn national carrier coming up again in the 2022/2023 election year and I have shown my sincere objections to it publicly.”
According to him, the government should have used over 30 aircraft in Arik and Aero’s fleets to set up a national carrier instead of setting up a completely new airline.
“Something went wrong with the manner of taking over the receivership of Arik and Aero that those that could have helped with technical and investment support stood aside. At the time of the receivership, the two airlines had over 30 aircraft together in their fleet that could have been used for a national carrier or two flag carriers if their assets and local and foreign debts were well assessed. Unfortunately nothing about these were carefully examined.
“Today, how many of those aircraft are remaining in the airline’s fleet? What has been the progress made by Asset Management Company of Nigeria (AMCON) that has no knowledge of commercial aviation on the recovery of the debts of over N300billion? Any aircraft leasing company or foreign technical investors looking at the manner the two airlines were run down will be wary to listen to any Nigerian investors except if you have the cash,” he said.
Also speaking, an aviation analyst, Engr. Ifeanyi Ogochukwu, declared that the government needed not to invest any amount of money on the proposed national carrier project.
Ogochukwu, who is also a licensed air traffic safety electronics specialist charged that the government should take a cue from global trends, which seem to negate state-owned carriers, adding that most governments had divested their interests in their hitherto national carriers.
He said, “Besides, the current Nigeria national carrier journey has had a lot of missteps already, which begs the fact that the government should learn from experience and global trends in this quest and let the airline industry be private-sector driven. Think of it, the huge amount of money spent so far in pursuing the national carrier, what is the benefit of this to Nigerians?
“Most countries that used to have government-funded carriers have either divested completely or have minority stakes where the carriers still exist. This is to ensure that beyond risk mitigation, other drivers for privatisation are allowing the airline’s executive management to make financial and operational decisions free from political pressure or meddling.”
He advised the government to provide national policy directions, strong foreign economic policy for aviation, particularly Bilateral Aviation Agreement (BASA) administration, address the multiple destinations and codeshare agreements with foreign airlines, develop the political will, and create an enabling environment for aviation businesses to thrive.
Ogochukwu also urged the government to ensure total deregulation of the airline industry, just as it happened in the telecommunication industry about two decades ago, adding that a strong and independent aviation regulator would also move the entire industry forward.
Nigeria Air was scheduled to take off on December 19, 2018, but was temporarily suspended about a month to the planned date.
Also, in November 2021, the minister announced April 2022 as another commencement date for the operations of the Nigeria Air.
However, six months after the minister’s commencement date failed, the Nigerian Civil Aviation Authority (NCAA) presented the airline interim management with an Air Transport Licence (ATL). That’s the Licence that will come before the Air Operators Certificate (AOC) that will fully guarantee Nigeria Air the right to begin air services.
After the ATL license, the minister said the commencement date of domestic operations would be announced in due course.
This lack of commencement date has created anxiety among stakeholders who argued whether the remaining months for the administration to wind down is enough to invest in airline business and start making profit.
They also argued over huge scarce resources appropriated by the federal government since 2019 till date
The last that was heard of the plan was that the federal government has approved the lease of three aircraft for initial operations of the proposed Nigeria Air.
Special assistant on public affairs to the minister of aviation, James Odaudu said that the aircraft will be procured from Airbus and Boeing.
He said this is a boost to the process of establishing a new national carrier, which has been in the process for over seven years now.
According to him, the approval by the federal government also indicates that the national carrier would begin operations with domestic routes.
Also, the minister of aviation, Senator Hadi Sirika, while speaking after the Federal Executive Council (FEC), presided over by President Muhammadu Buhari, announced that the airline would begin with domestic routes, then expand to regional and intercontinental routes.
He was not specific with the actual date for the take-off of the airline operations.
On the likely date for the commencement of operations Sirika said, “We will announce commencement soon.”
However, acting chief executive officer of the Nigerian Air, Dapo Olumide said this ATL certificate will enable them to push forward and conclude the process of starting the airlines now.
Also speaking, the NCAA director-general, Captain Musa Nuhu said there is no time for the commencement of the airline yet and the processes will be followed as the need arises.
The role of the federal government is to assist the start-up carrier by providing the initial capital which is between $150 million and $300 million.
The money is expected to be released in tranches over time from the start of operations through the first few years thereafter.
Speaking at the just concluded Conference of the League of Airport and Aviation Correspondent in Lagos, former president, National Association of Nigeria Travel Agencies, NANTA, Mr. Bankole Bernard listed the benefits of Nigeria Air to the country and its image.
“If Nigeria Air is able to come into the market, it will increase the fleet in the market, it brings convenience to the people that are travelling and not only that, we now start to showcase to the rest of the world that yes we could float a national carrier. The impression is going to create a significant one and is going to at the same time change the narrative, what narrative? The negative impression they have about Nigeria that we can’t do anything right but they would see this come to fruition.”
The approval of three wet lease aircraft to commence operation by Nigeria Air has generated heated debate among stakeholders.
Former spokesman, Nigeria Airways, Mr. Chris Aligbe, sees nothing wrong with  leasing of aircraft but the president, Aircraft Owners and Pilots Association, Mr. Alex Nwuba disagrees.
“How does that solve the problem of availability of funds through the Central Bank or will the national carrier get its money through the black market to fund its operation. It is absurd, it’s essentially an absurd proposal made to a group of people that have no knowledge of what’s going on and they are acting like I said judges receiving information on which they judge without basic facts,”he said.
Sindy Foster and Prof. Anthony Kila said certain issues were yet to be addressed to gain the trust of stakeholders to believe in the project.
“The issue we have at the moment is we don’t know who the 95 per cent right now are. For an airline to be launching and we don’t know who is the majority owner of this airline is an issue, and that should be clarified before any aircraft takes flight anywhere.”
On his part, the director-general, Nigeria Civil Aviation Authority, NCAA, Captain Musa Nuhu explained that the agency has no hand in the choice of aircraft to be used as it is a government policy.
As the national carrier is soon to debut, it is expected to be world class with regional and international operations.