The Federal Government, through the Minister of Aviation, Senator Hadi Sirika, has again reawakened the hitherto sleeping plan to float a new national carrier 17 years after the liquidation of Nigeria Airways. The minister had disclosed plans to float a new carrier, Nigeria Air, as one of the critical projects, among other aviation projects to be executed in 2021. The projects he said, would gulp N78 billion in the 2021 budget. Key players who spoke with SHOLA ADEKOLA are opposing the move on the premise that such move is coming when air passenger traffic has dropped by more than 50 per cent with most airlines shedding weights of fleet and manpower due to economic hardship with no help coming from the government.
THE Minister of Aviation, Senator Hadi Sirika on behalf of the government announced 2021 as the year for the take-off of a new national carrier while defending his ministry’s budget for 2021 before the Senate Committee on Aviation. While unveiling the federal government’s roadmap for the aviation sector in 2021, with the establishment of a national carrier topping its priority, Sirika said the roadmap would be implemented through a Public-Private Partnership (PPP).
His words: “In 2021, the sum of N78.96 billion is being proposed for capital expenditure at the headquarters in the aviation ministry and the emphasis will focus on the implementation of the aviation roadmap by Mr. President. The road map would be implemented through a Public-Private Partnership (PPP), topmost of which will be the establishment of the national carrier.”
On the national carrier, the minister declared that all required agreements and arrangements with other partners had been worked out, saying: “this government right from inception in 2015 has been planning and strategizing on how to resuscitate the national carrier for Nigeria as far as global air transportation is concerned. The plan, going by what is on the ground now, will be actualized next year through a PPP arrangement.”
Controversy trails national carrier
The announcement has again triggered tension and serious debates amongst key players with many describing the decision to float a new national carrier at a time like this as insensitive. To the key players the sector is swimming in murky waters of multiple challenges, ranging from economic hardship, crisis of survival inflicted on it by the global coronavirus pandemic with the injurious economic pain thrown at the sector, the failure of government to bailout the sector, to the hitherto various unfriendly policies of government which have been described as the bane of the sector. Since the announcement to deliver the new national carrier next year, the different questions coming from the stakeholders include: what will be the sense in implementing the national carrier at this time of lean resources of the nation and downtime of global aviation. To many, national carriers are no longer fashionable and with the scarcity of credible investors, what magic wand does Nigeria intend to use to achieve this tall dream when investors are running away from floating the controversial national airline after the earlier attempt hit the rock and given the country’s antecedents with such business ventures. Amongst the questions being asked include, if the latest announcement will not be tantamount to another white elephant project destined to fail.
Industry mood
To many analysts, the national carrier policy is another unpopular policy the government is struggling to foist on the sector at a wrong time when there are major critical needs that will bring the sector out of its present doldrums.
According to the Managing Director of Centurion Security Services and a member of Aviation Round Table, Group Captain John Ojikutu (retired): “This is not a time to be talking of national carrier when air passengers have dropped by more than 50 per cent and most airlines are shedding weights of fleet and manpower and when the finance for such ventures is not available in developing countries that would need such money for pressing social services needs of majority of their people.
For Ojikutu, rather than spend such money on a national carrier, the government should look at how to improve the aeronautical landing facilities of many of the country’s airports that do not offer night landing facilities for the domestic airline operators and there are over twelves of such airports. “With our population compared to South Africa and Mexico, the government needs to encourage domestic air traveling now more than internationally; Nigeria’s 26 airports do not carry up to 20 million passengers, whereas Johannesburg Airport of South Africa alone carries more than 22 million passengers. We can begin to develop our domestic airlines as flag carriers through regulations. A good economic audit for three to four years should qualify a domestic airline for regional; a further success of another three years economic audit should further qualify the airline for continental and further same to qualify it for intercontinental routes. It should no longer be automatic for any airline to be designated as a flag carrier.”
Comrade Ayuba Kyari, the head of administration and human resources at the 7star Hangar, an aircraft maintenance firm at the Lagos airport in his reaction agreed with many key players that the term, national carrier, is sort of outdated and signifies waste of resources, especially in our kind of economy. He however said if the blueprint will stabilize the industry and provide jobs and engenders development, that the government should be encouraged to float the national airline.
“Federal government might not be using the right terminology for this proposed airline except if the government is sure to retain majority share holding to protect other investors? Undoubtedly, the term, national carrier is sort of outdated and signifies waste of resources, especially in our kind of economy. However, if the blueprint will stabilize the industry and provide jobs and engenders development, one will not discourage the government. So the government can midwife the project and sell it immediately it takes off. However, there are doubts considering all past budgetary blunders that have taken place in the past years, it will just be another white elephant project and a conduit for enriching some politicians and civil servants. Meanwhile, what is even more worrying is the complete silence from the industry stakeholders on this issue. This should have been debated at a special forum to unearth the merits and demerits of such a costly project.”
Nigeria needs strong flag carriers not national carrier
Besides the excuse of wrong timing for the floating of a national carrier, the key players while insisting that it was out of fashion for any government to put public funds on national carrier which will only make few people rich overnight, government is being advised to channel the energy and the huge funds that will be spent on such unviable venture to making the airports environment and policies more friendly for domestic airline business.
For the key players, what is needed is not a national carrier but formulation and implementation of policies that will strengthen the domestic airlines that are in existence. Those pushing this argument have premised their position on the fact that with a good political will and friendly policies in place, some of the existing airlines like Air Peace, Aero, Arik and Dana can be strengthened to become good flag carriers that will fly the flags of the country around the world.
Like other stakeholders, Mr Ayuba Kyari is suggesting that the government should encourage private ownership of airlines like the existing domestic airlines and also formulate such policies that will drive mergers and acquisitions which he said will grow mega carriers in the country.
The key players cited the example of Air Peace which they said has been able to display high capacity that it can flag Nigeria’s flag high as witnessed in the feats it achieved during the peak of the COVID-19 pandemic which saw the airline standing in for the government by flying some stranded Nigerians across the world and at a point even engaged by countries like China, India and Israel to help evacuate their stranded citizens trapped in Nigeria during the pandemic.
Besides Air Peace, Arik Air, before it’s crisis, did the country proud while operating on routes like the UK and US and other regional routes. To these key players, what these airlines need is government’s goodwill which, if provided with the readiness to play international aero politics, the country can conveniently boast of three or four strong flag carriers.
Mr Richard Omole, an Abuja bound passenger who spoke to Nigerian Tribune at the General Aviation Terminal of the Lagos airport, said it was unwise to hear the government announcing such plans now when the domestic airlines are being killed by the same government.
“Common bailout funds that would have assisted the airlines to survive the pandemic, they cannot release, but the same government wants to bring out N78 billion to float a national carrier that will only collapse after one year. Let the government focus attention on the domestic airlines by providing an enabling environment that will encourage the existing airlines and even attract more private investors. The decision to float another national carrier after Nigeria Airways is another way of wasting national resources”, Omole declared.
Conclusion
In general, the mood in the various camps is tilted towards tasking the government to focus more attention on retaining its regulatory role that will improve the present toxic business environment which will help in supporting private businesses to grow and fill the lacuna of the absence of a national carrier. The position of the majority of the key players is that the economic viability of a new national carrier at this time is a tall dream which will not meet the desired needs of the citizens. Therefore, rather than waste public funds to float a single national carrier, the government is being asked to help strengthen the domestic airlines which are presently operating under a very tight situation.
– Nigerian Tribune