Nigeria, Africa jettison 100% airline ownership

African airlines are opening a new chapter in sustainability of their operations by divesting their stakes in their airlines.

This is becoming a departure from the past where the continents airlines are owned 100 per cent by the operating country.

The full ownership of airlines by African governments without allowing external investors led to the collapse of airlines such as Nigeria Airways, Ghana Airways, Zimbabwe Airways, Air Afrique and others in the past.

But the desire to make their airlines a global brand is necessitating many of them to call for investment and divesting of ownership in their airlines.

Nigeria has equally followed in that stead by announcing that it would only own five per cent equity in the new national airline, Nigeria Air.

Minister of State for Aviation, Hadi Sirika, recently said Nigeria Air will be private-sector driven with the Nigerian government holding about 5 per cent equity in the airline, adding that the government has set December 18, 2018 for the inaugural flight of Nigeria Air.

 The Minister assured that the government would do everything legally permissible to fast track the listing of the airline as a member of the International Air Transport Association (IATA) as well as the speedy subsection of the airline to the IATA Operational Safety Audit (IOSA) enable it ply international routes.

Said Sirika: “This airline, because it is a Private Public Partnership (PPP), the investors put in their money and strategic partners would decide who runs the airline. This airline is a business and not a social service. It is not intended to kill any airline in Nigeria but complement and promote them”.

Managing Director of Aero Contractors, Capt. Ado Sanusi told New Telegraph at the weekend that that is the best way to go for any airline that wants to be a global brand and make them stronger.

His words, “I think it is a welcome development for airlines that want to be global brands. If you remember, Singapore Airlines started buying stakes in airlines many years ago because it wanted to be a global brand and expand their operations.”

This is coming as Africa’s biggest airline, Ethiopian Airlines Chief Executive Officer, Tewolde Gabremariam, suggested the airline should be co-owned by African governments.

Gabremariam said Ethiopia’s government should capitalize on the airline’s stature to consolidate its place in the African continent.

“As a Pan-African airline, I don’t see any reason why we should not sell the minority shares of Ethiopian Airlines to African countries if they are interested in buying.”

 More than anything, Gabremariam’s bullish statement is reflective of the bold new era in Ethiopia. Since Prime Minister Abiy Ahmed came to power in April, he has overseen radical reforms that have changed the country’s trajectory.

In the fiscal year ending July 2018, the carrier announced it bought a 45 per cent stake to revive Zambia Airways, which went into liquidation way back in 1994.

Looking to tap into improving intra-African travel, Ethiopian increased its African network to over 58 out of its over 100 international destinations, introducing flights to Kaduna, Nigeria; Kisangani in DR Congo, and Nosy-Be in Madagascar.

There were also talks by Emirates plans to buy a stake or invest in South African Airways. According to reports, the Gulf airline had been in talks with SAA, South Africa’s flagship carrier, about a partnership.The discussions were said to have been facilitated by the UAE’s embassy in Pretoria,

This has however denied by the UAE based Emirates Airlines.

“We are committed to the South African market and have enjoyed close cooperation with South African Airways since 1997, and we are working closely to further enhance our code-share, ”an Emirates spokesperson said.

 “However, we have no plans to invest to take any equity share in South African Airways or any other airline.”

SAA is one of the UAE carrier’s more than 20 codeshare partners. The tie-up allows flyers to earn and redeem Emirates miles on flights with SAA, which operates the largest route network in Africa and serves over 1,200 destinations and 180 countries worldwide.

In 1999, Singapore Airlines announced it would buy a 49% stake in Virgin Atlantic Airways for 1.6 billion Singaporean dollars ($963.5 million), its biggest bid yet in a string of mostly failed attempts to buy into other growing airlines.

Wole Shadare