National carrier: Uganda sets pace for Nigeria, Ghana, others

The launch of Uganda Airlines recently could ginger Nigeria, Ghana and others to speed up processes for their own national airline. WOLE SHADARE takes a look at many African countries belief in national airline project amid failure of flag carrier airlines

Uganda takes the lead

Uganda may have set the tone for the revival of national airline as the country after 20 years relaunched a new carrier named Uganda Airline last week amid fanfare. The sing song in Africa for now is national carrier. Governments may need to ask if there’s still value to having a national carrier other than patriotism or pride. And they may wonder whether it still makes sense to prop up airlines as more countries open their skies to new entrants and foreign carriers.

The big question
The question is, does every country still need a national airline? The consensus is that as more countries adopt Open Skies agreements and open their borders with neighbours, each country no longer needs its own airline, particularly loss-making ones supported by governments.
An airline operator who craved anonymity, said, “If the choice was whether I wanted to have a national airline and pay a shitload of taxpayer money just to maintain the flag on airplanes, compared to having someone else come and fill the void, I’d choose someone else,” he said. “If nations want their flags to be carried, they can do it in many other ways.”
Of course, not everyone agrees.

Many governments see national airlines as “embassies with wings” and key tools for global trade. Others view their national airline as a public utility, and fear that if it goes out of business, no other  carrier will backfill the routes. Some like having a national airline merely for patriotism, national pride, and nostalgia.

A re-think

The launch of national airlines is set to be best of actions to be taken by many governments in Africa to resuscitate their national airline. Nigeria would probably have been the first in West Africa to relaunch or float a national airline but the exercise was truncated by the Federal Government after so much effort had been put into it by the Minister of Aviation, Hadi Sirika two years ago.

Although, Sirika’s pursuit of the project was met with opposition by those who felt the whole exercise was shrouded in secrecy and not too clear to many even when he assured that the carrier, Nigeria Air would be delivered to Nigeria.

Despite the suspension of the project, the Federal Government maintained that it was committed to delivering on its electioneering promise.

Recent observation that government earmarked N8.5 billion in the 2019 Budget for the airline indicated that the project is after-all 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.

Divergent views

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.

Majority of Nigerians are clamouring for a national airline when the country’s flag carriers have failed to operate profitably, with the lifespan of many of them not exceeding 10 years.

Ghana in talks with Ethiopian

Aside Nigeria that is ‘desperate’ to float a carrier for the nation, Ghana, Nigeria’s neighbours Addis Ababa-based Ethiopian Airline has reached an agreement with the government of Ghana, foreshadowing the setup of a new national airline in Accra.

Africa’s largest airline is advancing this partnership in line with the West African country’s nonstop efforts to rejuvenate its aviation sector, and the East African country’s relentless developments to expand its services across the continent’s aviation space.

According to report, the coming airline will be home-based, and Ghana, as well as its private sector, will have a minimum of 51 percent stake in the development.

Ghana lacks a national airline, and that has been so since the basket case that befell the Ghana International Airways in 2010.

  As Africa’s tenth largest country and home to more than 30 million people, the country is in need of a dependable aviation hub.

A burgeoning economy and abundance of resources in the nation, among other positive factors, contribute to making Ghana a hot spot in the continent.

Are national airlines still vital?
Many politicians fear their nations will be irrelevant if they lose their money-losing flag airlines. That’s probably a stretch. In most places, the market likely would fill the gap — provided the government got out of the way. But national pride is powerful, and few people want to see storied brands disappear.
If airlines suffer, governments may need to ask if there’s still value to having a national carrier other than patriotism or pride. And they may wonder whether it still make sense to prop up airlines as more countries open their skies to new entrants and foreign carriers.

Most governments don’t want to let go. But some free-market proponents, like Antonis Simigdalas, who founded Aegean Airlines in Greece two decades ago, effectively putting the decades-old national airline out of business, say it’s an exercise in futility.

At-risk national airlines
Many of these national carriers have rich histories, but without major restructuring all likely will continue to suffer. If they want to keep flying many will require taxpayers’ largesse.

South African Airways
The airline was founded in 1934 and owned 100 per cent by the South African government. A new Chief Executive Officer is trying to restructure the airline, which lost nearly $300 million in most recent fiscal year.

Kenya Airways
It was founded in 1977. Government owes majority stake. Kenya Airways is in the midst of potentially promising restructuring but lost $61 million in final nine months of 2017.

Air India
Air India was founded in 1952. The government owes majority shares. The carrier lost $422 million in most recent fiscal year. Government wants to sell a controlling piece but so far, there are no takers.

Alitalia
Alitalia was founded in 1947 under special administration by the Italian government. The airline filed for bankruptcy in 2017 after Etihad Airways gave up on its investments. In the first six months of this year, the airline lost $359 million according to reports.

Malaysia Airlines
This airline was founded in 1947 with the government owing majority shares. The airline said it is on line to be profitable next year but it has struggled in recent years after losing two aircraft in unusual circumstances.

Aerolineas Argentina
The carrier was founded in 1950. Government owes majority shares. It lost roughly $63 million in 2017 and struggles to compete against more nimble competitors.

Last line
Still, many politicians fear they live in countries where no other airlines, foreign or home-grown, would fill gaps left by a national carrier.