Nigeria Air: Tale of broken dream

Nigeria Air project is put on hold. This could be all government needs to fashion out a more sustainable mode for a successful national carrier, writes, WOLE SHADARE

 Shock

The news last week of the suspension of Nigeria Air came to many as a rude shock. Many are yet to come to terms that an airline which many Nigerians had looked up to would not fly, albeit temporarily.

No tangible reason was given by the Federal Government for the decision to put on hold the project which had come under severe criticism on how not to float an airline other than for “strategic reasons”.

The revival or setting up of Nigeria Air had been in high gear, this was as a result of the repeated calls from a section of the country following the way Nigeria Airways was brazenly liquidated by the former President Olusegun Obasanjo administration.

Some who were born in the 1970s and 1980s took a great deal of pride in state companies which informed government’s decision to embark on a national airline project.

African example

In Africa, over 20 countries own national or have a majority shareholding or minority shares in designated national airlines or flag carriers.

The benefits of having a national airline cannot be underestimated. Government may have looked at the benefits achieved by Ethiopia, Egypt and others through their respective airlines. In East Africa, Rwanda has a high flying Rwandair.

Many looked up to the  new national airline that was expected to be launched on December 19, 2018 as the hope of matching foreign carriers in the area of reciprocity or as a counter to foreign airlines which make huge revenue from the country.

In 2017, foreign airlines operating to the country raked in a whooping N500 billion in tickets sold.

Sirika’s defence

Minister of State for Aviation, Hadi Sirika said while announcing suspension of the carrier said, “Today the government at the FEC took decision to suspend the national carrier project till further notice.

“It has nothing to do with pressure from stake holders and it also not for political reasons.

“The decision to come up with national carrier in the first place was as a result of the lack of capacity of the existing carrier to meet demands,” he said.

On the possible thinking of the international interested parties, Sirika said the government had shown serious commitment towards the project, adding that the suspension would not affect government’s credibility before international interested parties.

Until now, the establishment of a national carrier for the country, Nigeria Air, was in top gear as a result of repeated calls from a section of the society.

Mixed feelings

Opinions were divided ever since the government announced in July that it would float Nigeria Air. While some were excited that the deal would assist to grow the country’s aviation industry, others were of the view that there were fundamental errors with the entire set-up.

In truth, the government, through Sirika did not carry all stakeholders ahead in the entire project and left much to be desired.

The truth of the matter is that Sirika and his team were very passionate about bequeathing a great carrier to Nigerians but it appeared they approached the project wrongly from inception which made many to predict its doom even before take-off.

Many of the people who criticised the project cannot be faulted. People are however consoled that there is a huge possibility that government might revisit it.

Those genuinely clamouring for a national carrier are impressed with the success stories of continental ones like Ethiopian Airlines, Kenya Airways, Egypt Air and South African Airways that have become formidable and efficient airlines. Ethiopian Airlines alone currently flies to over 80 international destinations across five continents with over 200 daily flights.

Campaign promise

The floating of a new national airline was one of President Muhammadu Buhari’s campaign promises. His directive to the ministry to get a committee to review modalities for floating a viable, competitive carrier was a good statement of intent in the national interest that should have been followed by a sound business management plan.

Despite the fact that national carrier projects have become the sing song in Africa for now, 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.

Until the suspension, the Nigerian government was making its third attempt at a national carrier with operations which was set for December 2018.

It’s clear the government was driving it and wants its own national brand with a global reach.
Officially named Nigeria Air, the airline’s logo and livery were unveiled at the Farnborough Air Show in London, which elicited mixed reactions at home.

The Federal Government was expected to own just five per cent of the airline in a public-private partnership (PPP) proposal designed to allow for professional management and avoid previous mistakes.

The Nigerian government estimated that initial capital for the airline will range between $150million (£115million) and $300million in the first few years of operation though the private sector partner has not been identified yet.

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.

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.
The most powerful national brands should be fine. Airlines like Lufthansa and British Airways long ago separated from governments, and their home markets have robust demand. But elsewhere, from South Africa to India to Nigeria, politicians may need to ask whether it’s good public policy to pump taxpayer cash into airlines, directly or indirectly.
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.

Last line

Yes, the suspension of the project has been seen by many as blessing in disguise. It could be what government needs to get its act together and fashion out a more sustainable, rancour free airline for the country.

Wole Shadare