Ethiopian Airlines ‘burden’ for Nigeria Air

Ethiopian Airlines is in the eyes of the storm. The carrier is so successful that its success is becoming a huge problem for many airlines and other stakeholders who likened its role in many parts of Africa as predatory, writes, WOLE SHADARE

Burden of success

Never has success become a huge burden than what the best airline in Africa is going through at the moment. Is Ethiopian Airlines a victim of its own success? The carrier is world-class by every standard and one that can rub shoulders with many other international carriers of repute.

The success recorded by the carrier is humongous. It cemented its position as Africa’s leading airline, helped by significant cuts at others, notably South African Airways because of its continued major challenges, and generally minimal growth across the board.

 

Ethiopian Airlines is a highly-coordinated hub carrier that uses its well-positioned Addis Ababa hub to target growing and increasingly important markets. It mainly focuses on connecting the Middle East, Asia, Europe, and North America with East, South, Central, and West Africa, along with connecting other destinations.

Shareholding saga

Ever since the Federal Government announced as a strategic partner in Nigeria Air, a flag sector-driven airline or a private sector airline backed by the government, the carrier has come under fire from some airline operators, stakeholders, and other aviation enthusiasts. Opinions have been sharply divided.

Apparently unsettled by the grim prospect, operators maintain that it would be unfair for the government to be both the regulator and operator, at the same time egg on a “national airline”.

The 49 percent shareholding by the biggest airline and the most prosperous carrier in Africa has elicited hot debates in the aviation industry. Not a few had argued that Ethiopian Airlines’ equity is huge and at best reduced drastically. Some others queried the rationale for bringing in partners to float an airline for Nigeria when the country could have gone ahead to float the carrier 100%.

Asking the country to go back to 100% ownership of the national carrier is tantamount to repeating the very problems that created the failure of Nigeria Airways Ltd.

 

The debate rumbles

The debate for a national carrier for Nigeria will never go away depending on the side or position one takes.  It is a position of naysayers and optimists. It is the most contentious debate that no one may ever win.

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Each time a discussion on the topic pops up, friends tear each other up on the need or otherwise of the project that the Minister of Aviation, Hadi Sirika, is currently working on and one that had reached 75 percent completion according to the promoters of the project.

The recent face-off is one involving two respected aviators, Sindy Foster of Avaero Capital and Dr. Daniel Young, a brilliant aviation consultant. The duo has been on each other’s neck over the propriety of setting up Nigeria Air which has thrown up issues of transparency, exposure of Nigerian carriers to the threat that the start-up poses, and shareholding issues among others.

The two respected aviators are not the only two that have put on their gloves arguing nonstop why the deal was not in the best interest of Nigeria.

Sindy Foster, Principal Partner, Avaero Capital

Opposition

Respected aviators and entrepreneurs like the Chief Executive Officer of West Link Airlines, Capt. Ibrahim Mshelia, President of Top Brass Aviation, Mr. Roland Iyayi, President of Aircraft Owners Association of Nigeria, Dr. Alex Nwuba, a member of Aviation Safety Round Table, Group. Capt John Ojikutu and Mr. Olumide Ohunayo were unanimous in their position that the choice of Nigeria Air or a national carrier was good but argued that the ceding of 49 percent to Ethiopian Airlines, a direct competitor to Nigeria was a risk.

While they questioned the rationale for picking Ethiopian Airlines, Iyayi called for the outright cancellation of the project. Iyayi’s call for the cancellation of a project that had taken almost six years to birth doesn’t look realistic, particularly when President Muhammadu Buhari had given his total support to Sirika to ensure that the carrier is launched in December 2022. The cancellation of the project when it is about 70 percent completed is not realistic some experts said.

The former Managing Director, of Nigeria Airspace Management Agency (NAMA), Iyayi said the entire process of selecting a strategic investor for Nigeria Air and all issues surrounding the carrier had been shrouded in secrecy.

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Iyayi said, yes, it has been agreed that the country needs a national carrier to reciprocate all BASAs routes but the manner and the process adopted thus far are wrong.

“This is an airline being set up using government as a face but owed by private individuals that are my contention and I think on that basis, it should be stopped and a more transparent process should be put in place because there is a need to reciprocate all our Bi-lateral Services Agreements, BASAs and Multilateral Agreements in different countries but it should be done in a way that gives the benefits of the commonwealth to all and not to a few”.

At a webinar organized by Avaero Capitals Partners with the theme: Nigeria Air-The Solution to Nigeria’s Aviation Problems? 75% of the participants agreed in a poll that Nigeria needs a National carrier while 93% said a foreign investor should not be the largest single shareholder in the carrier.

Nwuba raised some posers, “What are they bringing to the table, and how does this fit into the objectives of the National Carrier project? They will own 49% of Nigeria Air and are expected to bring in $300m, what do we know about the use of the capital”.

“We know that Ethiopian Airlines will pay for their aircraft, crews, and aircraft maintenance, how much of what they are bringing do we know will go back to them? Why has ET for decades been relentless about control of the Nigerian national carrier?

Ethiopia has been very successful in aviation, how will this partnership ensure that Nigeria is also successful in the aviation space?

Olowo

Olowo expresses optimism

President, of Aviation Safety Round Table (ASRT), Dr. Gabriel Olowo on his own part explained that the Industry unanimously voted for a national carrier rather than shout on the rooftop for the empowerment and consolidation of the existing carriers. 

“Nigeria Air is now born. Why cry on split milk when you have no faith in the midwife? We should concern ourselves by ensuring that there is a level playing field both for the new airline and others that the carrier would be competing with.

He posited that he had failed to see anything wrong with the shareholding model proposed by the minister where Ethiopian Airlines holds 49%

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Dr. Daniel Young, aviation consultant

Young backs project

Young expressed his disagreement with the position that the new carrier should be owned 100% by Nigerians. Government ownership of the airline, which he said became the new model after the 1971 acquisition of the airline 100%, marked the beginning of the downward spiral that eventually led to the death of Nigeria Airways in 2003.

“There is no point rehearsing the history of the rise and fall of Nigeria Airways, but one thing is clear, from the time the first cracks of failure began to show, many investors, consultant-necromancers, fake airlines, and portfolio experts of different sizes and shapes and shades have shown up before successive administrations with magical solutions and ideas to resuscitate the dying airline or now dead airline”

“With no prejudice, I was, at a time very skeptical about Sirika’s programmes and did not waste time to condemn what I thought at the time to be incongruous with established protocols for founding an airline. I utilized every available opportunity to condemn and criticize his programmes as some still want to do.  May I submit that you can call Sirika by any name you may wish, but there is no denying the fact that, he is a very deliberate man who learns quickly, and is ready to take corrections where necessary. It is this conscious approach to learning against the barrage of criticism from all quarters that has led him to this point where we could almost declare with confidence: Nigerian, behold, Nigeria Air!”.

Last line

Stakeholders have expressed divergent views on the much-awaited carrier, it is hoped that the carrier would provide world-class air transportation for millions of Nigeria that seem to have welcomed the initiative. In all of this, trust seems to be lacking but the Minister has said that the project is in the best interest of the country.  

Wole Shadare