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Nigeria: Why the National Carrier Project Failed


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This Day


Although it may seem that the planned national carrier project is still on-going, prevalent factors which included the designation of Aero Contractors to carry the nation's flag, lack of support from stakeholders, and the absence of an acceptable model, have worked against the carrier's take-off, writes Chinedu Eze

Many Nigerians, especially industry stakeholders were pessimistic when the federal government through the former Minister of Aviation, Stella Oduah firmly announced that Nigeria would float a new national carrier.

They were pessimistic because they did not believe government could successfully run an airline. This is confirmed by the demise of the defunct national carrier, Nigeria Airways Limited, which ghost is still haunting those who were involved in the airline.

Many former workers of the airline would argue that the airline was not at a hopeless financial state when it was liquidated, that there were airlines at worse situation in other countries that were revived, including Kenya Airways.

The national carrier plan failed because government refused to carry stakeholders and other Nigerians along with the fear that if it did the project might be scuttled by those who did not want it to work. So it wrapped a lot of its plans in secrecy with the media leaking uncoordinated snippets of it that never made sense.

Government chose Aero Contactors when there was a bigger airline, Arik Air with more than twice the number of aircraft in Aero’s fleet and with New Generation aircraft of average of seven years. This choice heightened suspicion of Nigerians that government was not sincere in its pursuit of the programme.

Industry observers said Aero was not chosen from an objective, strategic plan because it was a better airline; it was chosen to cast aspersion at Arik which obviously qualified to be designated in accordance with government’s plan. So the choice of Aero was a retribution against Arik for the dark relationship it had with the former Minister, which the airline significantly shared the blame.

But personal grievances and acrimony should have given way to national interest. It would have been in the national interest that an airline with international clout was designated instead of Aero that barely operates regional services. For over 10 years Aero has operated scheduled services it has less than 12 fixed wing aircraft. But kudos must be given to the airline for its safety record and its development of indigenous manpower.

National Carrier vs Flag Carrier
Although the Federal Government said it would established a national carrier, but sometimes this definition is blurred by the clamour for flag carrier against the backdrop of the statement often made by the Ministry of Aviation that the airline would be wholly privately driven. This definition has remained equivocal till now.

Many industry observers can readily say that what are in vogue today are flag carrier airlines; not national carriers. This is because the private sector is taking over the management and ownership of many airlines and it is believed the private sector can always effectively manage airlines better than government or its agency can do. But there is always a thin line in that definition.

In Nigeria when loosely used, flag carrier means an airline that is privately owned which is given concessions or rights by government, while national carrier is seen as an airline owned by government. Although it is the vogue to have flag carrier but many industry experts believe that because of the peculiarity of the Nigerian situation, a national carrier would be a more successful venture than a flag carrier, but with a caveat that government should not own a substantial or major shares in the company and would not manage it.

Travel expert, Ikechi Uko said that although corruption and nepotism hinder government owned organisations in Africa, but Africans tend to recognise and respect government owned organisations, adding that privately owned businesses always face uphill task to survive, except in countries like South Africa and Kenya.

“African countries respect what is owned by government and all the successful airlines in Africa are national carriers which include South African Airways, Egypt Air, Ethiopian Airlines, Royal Air Maroc and Kenya Airways that is partly owned by government.

Need for National Carrier in Nigeria
Nigeria is losing huge resources to foreign carriers; they lag behind in aviation development, while they provide huge market for international passengers, which these foreign airlines airlift every day. Considering the history of aviation in Nigeria, the country is way, way behind in air transport in terms of the number of Nigerians employed in the country.

While Ethiopia, Kenya, Egypt, South Africa provide manpower for international aviation, as many citizens from these countries work in international airlines in other countries, expatriates have taken over the Nigerian aviation sector.

Uko noted that foreign airlines see Africa as a hunting ground, disclosing that by next year there will be increase in air traffic in Nigeria as more foreign airlines will come to operate from the country and some of them may even register domestic airlines in Nigeria. The objective of this plan is to mop up the passengers from Nigeria which is growing every year.

Without a national carrier, Nigeria will not be able to grow the needed manpower and will not create jobs for its teeming population in the aviation sector. National carrier also improves the image of a country besides developing indigenous manpower through training and providing jobs for them.

“Airline business is established for strategic national interest. The Middle East has seen the gain of the airline business and a country like the United Arab Emirates is using it to extend its power beyond its region. It is using aviation to hold power and it is the driving force behind the UAE economy. It is something to be respected; Nigeria needs to establish its own national carrier,” Uko said.

Ethiopian Airlines contributes about 38 per cent of the GDP to Ethiopian Economy, Emirates Airlines contributed directly and indirectly substantially to UAE economy, so is Egypt Air and other successful international carriers in Africa. Nigeria gains nothing from aviation; rather it loses every day to international carriers.

Uko said: "To be able to control our environment, we must have a national carrier.”

Former head of communications of the defunct Virgin Nigeria, Francis Ayigbe said national carriers are meant to service interests far more than the assumption that it is a drain pipe, noting that if effectively and efficiently structured, it could be a source of national pride, adding that there are shining examples of this in several parts of the world.

“Flag carriers are, on the other hand, are individually owned or run through diverse shareholding structures. Most nations especially in Europe pride themselves of their flag carriers. But it should be pointed out that these presently successful flag carriers were once national carriers which enjoyed the benefits of governments’ support and protection at infancy and other developmental stages of their history via funding, including facilitating them to viable markets through diplomatic measures.”

Ayigbe said there is the need for Nigeria to have a national carrier, “First it will enjoy the grandfather right that is due to it; enjoy prime space at airports and they would not be subjected to obscure parking slots.”

“There are allegations that a national carrier would be mismanaged through inefficiency. So are flag carriers. In fact, statistics show that there are more run down flag carriers than national carriers. We also have seen flag carriers with suffocating boards.

"At this stage, it is instructive to say that if the options of the International Financial Corporation (which advised Nigeria on the establishment of national carrier) were thoroughly examined vis a vis the Kenya Airways option, Nigeria Airways today would have far outstripped several national airlines such as Egypt Air, Kenya Airways, South Africa Airways, Ethiopia Airlines etc.,” Ayigbe said.

What to Do ?
Many in the industry said that the most practicable thing to do for Nigeria to have a carrier of its own is to develop a national carrier or flag carrier with full government support with one of the existing airlines.

By it structure, the number of fleet and international operations, Arik Air is most qualified to be adopted by government to actualise this objective, if its owner would be willing to partner with government.

Government should provide such incentives as air cabotage law now known as the proposed Fly Nigeria Act, whereby Nigerians travelling on government expense are made to travel with Nigerian airlines. Government should review downwards the charges and taxes on that airline and also carry out debt negotiation with the given airline.

Travel expert, Uko noted that converting debt to equity was the model government should have adopted in order to own minority shares of an existing airline so that it would have an imprint in the airline and thereby securing government and people’s support for the airline.

Ironically government has been indicted variously for the woes of Nigerian airlines. From providing mulitdesignation to foreign airlines and introducing inimical policies against local carriers, government seemed to be insensitive to what the country is losing in the aviation sector.

For example, THISDAY gathered that the management of the Nigerian National Petroleum Corporation (NNPC) deposits money with British Airways for its staff travelling from Abuja to London. Such huge resources that are repatriated could come back to Nigeria if government insists and negotiates with UK that Arik must be given landing slot for its Abuja to London flight.

This can easily be done at the diplomatic level. Other countries’ government protect their airlines, but Nigeria fritters its opportunity away.

Uko told THISDAY that government officials envy Nigerian airline operators and an average Nigerian would rather patronise foreign airlines than patronise indigenous carriers.

“Nigerians don’t support their own. In aviation, those who struggle through all the obstacles and establish airlines are fought against by government’s inimical policies. That is why flag carriers may not work in Nigeria. Flag carriers have not worked as a model in Nigeria. If any carrier has to make it as an international airline, it must have to represent Nigeria,” Uko said.

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