Waning hope for national carrier

Nigeria has tried unsuccessfully to set up a national airline and is ready to pour money into the project. How realistic is the agenda for the a new national airline for Nigeria? WOLE SHADARE writes

Hope wanes

In 2014 before he was elected, President Muhammadu Buhari made the setting up of national carrier one of his priorities if he got to be elected as Nigeria’s president. Five years has gone past and the country is yet to be bequeathed with one of the promises of Mr. President.

The President did not forget he made such promise.

Since he assumed office, his ministers in charge of aviation and transportation have pursued the project vigorously but it has been described as one step forward, many steps backward not for wont of not taking steps but they have not been clear cut.

It is heartbreaking that one of the few countries that started the race with Nigeria has progressed better than Nigeria and has actually set up its own national airlines because of the huge gaps domestic airlines have not been able to fill.

Amid slow pace of action on setting up national carrier for Nigeria, some stakeholders even suggested that Arik and Aero Contractors, two airlines that technically belong to the Federal Government, be merged to make it easier if government is in a conundrum on what to do after boxing itself into a corner.

Minister expresses hope

But the Minister of Aviation, Hadi Sirika, would not even discuss that because of the huge liability of the two airlines.

Sirika looks more determined to match his words with actions. He looks committed to delivering on this huge project and has not hidden his determination to achieve this.

The buzz around what people described as a wonderful idea if the government pulls it through is waning as this may end up as another failed project considering the fact that the governments 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 see it as an unprofitable venture.

 

 

State airlines boom

Uganda is the latest African country to pour money into a national carrier. But the aviation industry faces some particularly tough conditions on the continent before it can turn a profit.

Just over three months, a plane belonging to the newly revived Uganda Airlines lifted off from Entebbe for its maiden flight. Fifty minutes later, the jet full of dignitaries landed safely in Nairobi, the capital of neighbouring Kenya.

Ugandans took to Twitter and Facebook to celebrate the successful flight of the Bombardier CRJ-900, one of two such planes currently flying for the relaunched national carrier.

“In some ways this airline is beginning to feel like we are sending someone on the moon if you look at the reactions online,” Angelo Izama, a Ugandan journalist, said.

It’s taken Uganda nearly two decades to get its national carrier back in the skies – the airline was grounded in 2001 after years of losses.

Its relaunch has sparked national pride, with President Museveni describing the inaugural flight as a “historic moment” for all Ugandans.

Prime Minister Ruhakana Rugunda hopes the new carrier will also contribute to the economy.

Ugandans spend $450 million ($405 million) flying with foreign airlines, he said at the inaugural ceremony. That money could rather flow to Uganda.

African countries resurrect airlines

Like Uganda, a number of African countries are championing the idea of a national carrier and are either planning to resurrect their state airlines or pouring money into expanding their fleet and routes.

Ghana, which has been without a state airline since the collapse of Ghana International Airways in 2010, is planning a new national carrier in partnership with Ethiopian Airlines.

In a similar deal, Zambia plans to relaunch its state carrier in late 2019 more than two decades after it was shut down.

Senegal commenced domestic flights with its newly revived national carrier, Air Senegal, in 2018 while Tanzania has announced plans to buy new Airbus jets in order to increase the routes of its state-owned national carrier.

Great potential

On the one hand, the air passenger market in Africa shows great potential. More Africans are flying than ever before and the numbers are expected to grow by five per cent annually in the next 20 years.

The International Air Transport Association (IATA) estimates that the continent will see 274 million air passengers by 2036.

People are flying for tourism and also for education or for medical treatment. And a large part is for business reasons.

It’s also an underserved market. It can be necessary to fly from one African country to a neighbouring nation via hubs such Addis Ababa, Johannesburg, Nairobi – or even via Europe or Dubai – because there are no direct flights.  African carriers could help fill these connection gaps.

Industry experts also say for African carriers to succeed, the continent needs an open-skies agreement to free up the aviation sector from protectionism.

But so far only 28 African countries have signed the Single African Air Transport Market and only ten of these have begun changing their own laws to implement the deal.

Costly national carriers

National carriers are also costly to run. According to IATA projections, African airlines will lose $100 million this year and most state-owned flag carriers in the region are losing money.

Ethiopian Airlines is sub-Saharan Africa’s only profitable large state-owned airline. Carrying 11 million passengers in 2017, it serves over a hundred destinations on all five continents.

South African Airways, one of the continent’s biggest airlines, has been making massive losses since 2011 and has only survived thanks to huge government bailouts.

The airline is also without a permanent chief executive and has yet to file annual results for the two most recent financial years because of concerns about its viability as a business, reports Reuters.

Mixed feeling

Anxiety mixed with palpable joy could best describe plan by the Federal Government to put in motion process that would help to establish a national carrier for the country. Apparently worried by loss of huge revenue from the aviation industry, the government had concluded plans to regain some grounds by floating a national carrier before the end of 2018.

It was unpleasant revelation recently that Nigeria has been losing more than $1.5bilion 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. And since from the onset, he (Buhari) has shown the zeal in the possibility of returning the national carrier, the BASA report and others like it, have made it ideal and created appropriate time for something to be done.

First and foremost, it is worth mentioning that the majority of countries in Africa and possibly in the world have national carriers with ownership ranging from private entities to a majority or minority state ownership shareholding.

Last line

It remains to be seen if the proposed national carrier will bring the hope for return on Nigeria’s investment.

 

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