Why Nigeria May Need a National Carrier

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Most debates on national carrier tend to tilt in favour of those who said that government owned airline cannot succeed in Nigeria, going by the experience of the defunct Nigeria Airways Limited. Those who oppose the establishment of a national carrier usually justify their position by saying government has no business doing business.

But there is a new dimension to the clamour for a national carrier. And that is seeing a national airline as catalyst to the growth and development of other sectors of the economy. In this vein, the airline will not be established solely for profit but to support other sectors of the economy like tourism, manpower development, aircraft maintenance, catering, developing airports and creating a hub, while the airline is subsidized; maybe, not directly by government but from money generated by ancillary services, while government eliminates charges by the airline that could weigh it down.

This may be a new dimension to the debate and this argument was proffered in the presentation made on Tuesday by the Chairman of Aso Savings and Loans Plc, an aviation consultant, Ali Mohammed Magashi during the Colloquium on Aviation 2017, organised by Simon Tumba of Nigeria Travel Mart in Lagos.

He said that airline sub-sector does not guarantee better returns on investment, yet it needs huge capital and that is why the private sector is not enthused in investing in airline business. This is backed by the fact that airline operators, inclusion Richard Branson, acknowledge that airline business could make a billionaire become a millionaire, so there is no huge return on investment.

Magashi therefore, argued that because of the poor returns on investment, the private sector may not be able to invest the quantum of funds needed for the sector. But considering the fact that aviation is a critical infrastructure, which facilitates the growth of other sectors of the economy as it provides the fastest movement from one place to another, conveying passengers and cargo, it is indispensable in the economic mix of any nation.
Because the need for this service is critical it becomes part of government’s social services to the people and this explained why most of the airlines established in the world before now started as national carriers, but in the United States (US) while the airlines there could not be described as national but flag carriers; government at interludes inject funds into them so that they would continue to thrive and provide those services that sustain and grow the economy.

“All the airlines that top the world are either owned or still owned by government. The reason is simple; aviation is not competitive in terms of returns, but it benefits other sectors of the economy and that is where government makes its profit. The truth is, there is no successful flag carrier in the world, so it is evident that aviation cannot be grown by the private sector alone. It is essentially a government turf, but the major challenge in Nigeria is political interference, which inhibited the growth of the Nigeria Airways,” Magashi said.

He outlined the benefits of a national carrier, which the private sector driven airlines in Nigeria cannot provide. These include effective regulation and aircraft maintenance, noting that since the demise of the Nigeria Airways Limited (NAL) privately owned airlines have not been able to train engineers rather they would go for readymade engineers who were trained during the period the national carrier held sway. With the demise of and retirement of many of these engineers, Nigerian airlines now go for expatriates. So there is dearth of indigenous technical manpower because there is no national airline to train them.

Magashi said that there is no local airline that is training pilots today and even those who trained cannot be absorbed by these airlines to do type-rating and these are services that used to be provided by the national carrier.

“The only way to train manpower is to develop national carrier. This training is important because it is also for the security of the nation. It was poor manpower development and poor regulation that led to the accidents we had today,” he said.

On the development of tourism, Magashi said that national carrier is key and made reference to Dubai and Emirates, South Africa tourism and South Africa Airways, Kenya Airways and Kenya tourism, noting that tourism flies on the wings of national carriers.

“National carrier is embassy on the wings. Government needs to spend money on infrastructure. We need to move our aviation industry. Kenya doubled the growth of its tourism industry because of Kenya Airways,” he noted.
The aviation consultant also remarked that national carrier is the pivot for job creation in the aviation industry and also the establishment of other ancillary services such as catering company, leasing company, aircraft insurance firms and partnerships with service providers like airport management, fuel suppliers and others.

But the major challenge about establishing a national carrier is government interference. That was what made NAL go into bankruptcy, which prompted the Chief Olusegun Obasanjo’s government to liquidate it. So how can government insulate a national carrier from government interference, which is the main reason many industry insiders insist that national carrier cannot work in Nigeria?

Magashi suggested that government could establish a governing council made of persons with established integrity and goodwill and those who have names to protect to head the national carrier, which would now appoint the management based on merit and not on federal character.

He noted that in football, Nigeria do well because “we bring our best to the field. So when you appoint the best to manage the airline and ensure that there is no political interference it will grow.”
Many in the industry still see establishing a national carrier as tough because of the fear that it may not thrive due to interference but Magashi hypothesis may be the best approach to the planned national carrier by the federal government.