National carrier: Dream coming alive again

The decision by the Federal Government to earmark N8.5 billion for national airline in this year’s budget suggests that the dream for a national carrier could well be alive, WOLE SHADARE reports
 

Despondency

The news of suspension of planned national carrier for Nigeria by the Federal Government late last year jolted a lot of people, who felt that Nigeria has again truncated a great opportunity to bequeath to the country an airline that would very well fly Nigeria’s flag to many countries of the world.

Many became despondent. The Minister of State for Aviation, Hadi Sirika was highly discouraged but was determined to see through the project that had taken his time, the country’s resources and put everybody on edge on the huge expectation of having a national airline 16 years after Nigeria Airways was liquidated in a brazen manner by government at the time.
Although nobody knows the real reason the project was suspended in September 2018, but people, who were close to the vice-president, said he was not pleased with the way the entire project was handled which gave cause for a review.
Not a few saw the suspension of floating a national airline as a subtle way of government’s withdrawal or cancellation of the exercise.
Domestic airline operators jubilated and even congratulated President Muhammadu Buhari for what they termed ‘bold and courageous’ move to stop what they described as another huge money about going down the drain.Jitters

Before the suspension, they pleaded that government should provide a level playing ground for all the airlines currently operating to compete with the new national carrier that would come into operation December 2018 as the government had said it would be private sector driven.

Despite the initial pessimism that greeted the whole idea of a national carrier, many saw the good intention of government to fill in a huge void left by domestic carriers who are just too small, weak and fragmented to provide air transport needs of millions of Nigeria despite the huge incentives given to them by the Federal Government in the form of waiver on aircraft parts and mobile equipment and tax or Value Added Tax (VAT) exemption.

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Hope rises

Last week’s observation that government earmarked N8.5 billion for the airline indicated that the project is afterall on course. The N8.7 billion allocation is working capital for Nigeria Air in the 2019 budget. Another N500 million was earmarked for transaction advisers and N200 million for consultancy towards the establishment of the airline.

“Setting up a national carrier will cost Nigeria at least $3billion.
“But is it wise as a nation to take $3 billion from the Nigerian coffers and put it into a venture that will for sure go down the drain and not make profit within the first five years?” queried the Chairman of the Airline Operators of Nigeria, Capt. Nogie Meggison.
The buzz around the idea of a national carrier is that government may lift the suspension to continue with it since money has been appropriated for the project take-off.
Stakeholders described as a wonderful idea if the government pulls it through, with some considering it as another failed project considering the fact that the administrations before now had tried unsuccessfully to give the country a national airline, which has divided opinion among those who believe in the idea and others who believe is an unprofitable venture.Need for commitment

Experts, who spoke with our correspondent, said setting up an airline takes a lot of process, commitment and funds especially if government is midwifing it. The year 2019 is here, the Federal Government is poised to review its modus operandi. For now, there seem not to be too much activities around that, possibly caused by the poiltical campaigns going on and the national elections that start next month.

Time is of essence if the administration is desirous of bequeathing a legacy to the country considering the fact that Rwanda Air is becoming a huge force in the continent and competing with many other African carriers.Short end of the stick

Africa has over 100 airlines operating flights all over the continent with only a small percentage of them completely based in Africa or owned by Africans.

However, there are very few that cater to ordinary Africans with prices that are affordable and make it easy to travel through the region. Aside more established carriers such as Ethiopian Airlines, Kenya Airways, Royal Air Maroc, South African Airways and EgyptAir among others, other African nations are racing against time to float airlines that would also take part in the market share both in Africa and overseas.
The revival of the national airline is in high gear, which is as a result of the repeated calls from a section of the society and the executive having goodwill to revive Uganda Airlines.
In Africa, about 47 out of 54 countries own airlines or have a majority shareholding or minority shares in designated national airlines or flag carriers.Huge benefits

The benefits of having a national carrier cannot be underestimated.

The benefits achieved by Kenya, Ethiopia, Egypt and South Africa through their respective airlines are there for any interested party to see.
In the East African region, only Uganda lacks a national carrier; even young Rwanda has a high flying Air Rwanda. Let’s first study the tourism numbers, according to the World Tourism Organisation, the most visited countries in 2015 by international tourist arrivals in order are France, United States, Spain, China, Italy, Turkey, Germany, UK, Russia and Thailand.
International tourism receipts grew to $1.26 trillion in 2015, corresponding to an increase in real terms of 3.6 per cent from 2014.
Down here, it could be argued that US and China are vast territorial countries.
The list is also populated by Irish and UK low cost budget airlines Ryanair and Easyjet making it to the top 10 respectively.
When it comes to fleet size, still five out of 10 are based in US, China has two, Germany, France and Canada with their respective national carriers – Lufthansa, Air France and Air Canada making it to the top 10. In terms of the countries visited by airlines, the top four airlines are national carriers namely Turkish, Lufthansa, Air France and Qatar Airways.
It’s evident that a functional national carrier spurs growth in tourism, which is a multiplier effect in the profitability of the airline business.Expert’s perspective

A former Assistant Secretary-General of Airline Operators of Nigeria (AON), Mohammed Tukur, said an airline business required top management, adding that aviation is a highly volatile business and needs great care and handling.

He explained that the main reason most of national carriers have gone under is mismanagement.
“I don’t want to speak about US or UK, which have no state owned national carriers, these are developed countries that can’t be compared to a least developed country such as Nigeria,” he added.Last line
It was an unpleasant revelation recently that Nigeria has been losing over $1.5 billion yearly from the Bilateral Air Services Agreement (BASA) because of non-utilisation of its international flights allotments. Such a report is a call to duty for any responsive government to find the best way to recover such losses or reduce it.

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Wole Shadare