FG Engages Qatar, Airbus for National Carrier Establishment


Chinedu Eze

Despite the uncertainties surrounding Nigeria’s plan to establish a national carrier by December this year, Middle East carrier, Qatar Airways has been engaged to be the core investor and Airbus to be the provider of aircraft that would feed the leasing company, which would provide aircraft with fleet.

Although the Transaction Adviser, which was established to chart modalities for establishing the national airline, has advanced in its work, the Minister of State, Aviation, Senator Hadi Sirika confirmed the development, as government is said to be poised to deliver on its promise.

Sirika recently met with Boeing on similar discussions, but THISDAY learnt from sources familiar with the deal, that Airbus wants to stamp its foothold in West and Central Africa dominated by Boeing aircraft and also wants to use the opportunity provided by the proposed national carrier to do so.

A source told THISDAY that in the interim, Qatar Airways would provide long-haul aircraft for the new airline on wet lease, which means that the flights would be operated mainly by the Middle East airline’s crew and technical personnel till when the national carrier would be able to take over fully.

The source explained that if Airbus succeeds in providing aircraft for the leasing company, it would deploy its short haul aircraft for domestic and West Coast operations, which would be operated by pilots recruited by the new company.

If government succeeds in establishing the national airline, the Buhari administration must have realised a key project in the aviation industry, which will have reverberating effect in the economy of the country.
The federal government had promised to concession the major airports in the country, establish aircraft leasing company, a maintenance facility and a national carrier and it has instituted transaction adviser to actualise these projects but industry observers say that failing to realise these plans in the last three years, it would be difficult to establish them in the remaining one year of the administration.

“As at this moment the new national carrier does not have offices, even interim offices, where it would operate from; perhaps they may use the facility of Skyway Catering Limited, which is still under the Ministry. If the resources are there a company can construct offices for the airline under two months,” a source told THISDAY.
Many industry observers do not believe that the establishment of the national carrier would be private sector driven as initially conceived because the private investor must be convinced that it is on-going concern before they would commit their money in the project.

“I don’t think this will be realised now. They may start it and later offer it to the private sector. They may start it with funds from international financiers with government guarantee as Afrexim Bank and African Development Bank have agreed to commit funds for the leasing company and also support the airline,” the source added.
In justifying the need for a national carrier for the country, an aviation consultant and the Chairman of Aso Savings, Ali Mohammed Magashi noted that a national airline was necessary because the 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.

Magashi argued that because of the poor return 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.

“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.