‘Why Government-driven National Carrier May Fail’

0

Chinedu Eze

Aviation industry experts have identified factors that may lead to the failure of the planned national carrier, if it driven by the federal government.

Although the federal government has said at different fora that the ownership of the airline would be predominantly private and that government would own about five to 10 per cent stakes.

However, the process so far has indicated that the proposed airline was being midwifed by government and it has not been clear how the private sector would be wooed to own major shares in the arrangement, as the federal government through the Ministry of Aviation is wholly in charge of actualising the project.

So, findings showed that industry experts are skeptical about the success of the proposed national airline.

Travel expert and organiser of Akwaaba African Travel Market, Ikechi Uko, told THISDAY that government should create a situation whereby the private sector is supported by government to set up at least three major airlines and reserve some shares for government in order to give the airlines a national seal.

He said government ought to concentrate in building major airports, major maintenance, repair and overhaul (MRO) facility and providing the needed infrastructure so that Nigeria would have modern airports that could compete with the best in the world.

MRO, he said, would also enhance profitability for airlines, as they would maintain their aircraft locally, adding that the facility would generate huge revenues too as airlines from other countries would maintain the aircraft in Nigeria.

“I think airports are more beneficial than airlines when they are under government management.
“Our airlines fail because they don’t have government protection. The recent intervention made by the Minister of Aviation, Senator Hadi Sirika by stopping Senegal from having more designation to Nigeria when it failed to allow Arik and Air Peace to fly to Senegal, is the kind of protection Nigerian airlines need to grow and compete effectively.”

He added: “So it is important that government should protect Nigerian carriers. If not, our airlines will get crushed by unfair practices by other countries, in the bid to protect their own airlines.

“I know an airline operator that pulled out of Ghana because the country wants to establish its own national carrier. It is obvious that when it does it would no more create equal opportunity for all the airlines operating in that country.

“Government can take five per cent stake in three airlines. Five per cent is safe, but for government to start its own airlines, I doubt whether the airline will thrive after five years, but a little government participation in the airlines will help them to survive because of government protection,” Uko said.

CNN international anchor and business editor at large, Richard Quest, said recently that Nigeria does not need a government- owned carrier.
“The government of Nigeria should not be in the airline business. What you do is that you deregulate your air space, allowing in those who can run the routes for you.

“Nigeria does not need a nationally owned carrier. You don’t need the government starting an airline. It will be very nice if investors in Nigeria decided to put their own money into an airline. “South African Airways is a good example of an airline that is in deep financial trouble that you have to question its right to exist. It has so much government’s money poured into it and it has failed to turn profitable. Eventually, you have to say this thing will never be profitable, close it down,” Quest had said.

Speaking in the same vein, President of Airport Council International (ACI) World, Angela Gittens, had told THISDAY that national carriers are largely inefficient because of the government subsidy “and so it is more subject to governmental types of economics and not the market, they haven’t been exposed to the market. So when they do suddenly get exposed to the market, sometimes they fail.”
National carrier if successfully established will cut back the huge revenues foreign carriers repatriate from Nigeria annually