Nigeria Air? We do not need it

There are just too many questions surrounding the idea of ‘Nigeria Air’ being promoted by the Minister of State for Aviation, Senator Hadi Sirika that make many Nigerians to question the honesty of the current administration. First, there was an agreement with the Infrastructure Concession Regulatory Commission (ICRC) that the federal government would have zero investment in the proposed national airlines. In querying the rationale behind the decision, former Asset Management Corporation of Nigeria (AMCON) Chief Executive Officer, Mr. Mustafa Chike, wrote on his Twitter page: “I am baffled. Air France/KLM paid $286 million for 31 per cent of Virgin Atlantic last year but we are paying up $300 million for a start-up airline.”

What is more disturbing is that the experience of Nigeria shows that most of the ‘investors’ we have had in critical sectors usually end up coming here to raise loans from our local banks to fund both their investment and operations. In a risky sector like aviation, we doubt if any rational foreign investor would bring any money for ‘Air Nigeria’ and that is why we believe the National Assembly should wade in before we throw away $300 million.

Even at the risk of sounding repetitive, we agree that given the size of our nation, the huge population and the mobility of our people, there are sufficient grounds to argue for a national carrier. At present the country loses so much money to foreign airliners because there is no national carrier with adequate network of routes or the capacity to operate extensively many of the highly lucrative routes. The few private airlines that attempt to do that do not have the wherewithal and capacity to finance extensive foreign operations. Yet no matter how patriotic we may feel about the issue, going back to the era of our inglorious past remains nothing but a misplaced nostalgia.

At its peak, the then national carrier, Nigeria Airways had over 30 aircraft in its fleet. But by the time it was eventually liquidated in 2003 by the administration of President Olusegun Obasanjo, it had become a huge liability, an object of national shame and international ridicule. Some of the aircraft were seized abroad at will because of indebtedness. Salaries were hardly paid. At one of the most ludicrous moments in 2002, after more than a 24 -hour delay on a Lagos-bound flight from New York, a passenger had to lend the airline $5000 to buy fuel!

Indeed, Nigeria Airways was synonymous with large scale inefficiency, mismanagement and corruption. Yet there is nothing to suggest that appreciable lesson has been learnt as evident in the debacle that followed the federal government arrangement with Virgin Airlines to run Virgin Nigeria as Public-Private Partnership (PPP), a similar model that the aviation minister is now proposing. Sir Richard Branson, chairman of the group, complained of political intrigues, corruption, lack of adherence to agreements, and a regulatory body that didn’t know what to do “and persistently asking for bribes at any point.” The airline was making huge losses in capital and ultimately, the Virgin group was forced to divest its interest. What assurance is there that a new national carrier would be run responsibly?

Indeed, the world over, most nations are divesting from airlines businesses because they are better run by the private sector. To compound the problem, the nation’s aviation industry is currently going through financial stress and many of the airlines are highly indebted. They are hindered by inadequate fleet and capacity and thus cannot compete effectively. Therefore, given the operating environment, we feel that a national carrier is a misplaced priority that would lead to another waste of enormous scarce resources.