WILL NIGERIA AIR SUCCEED WHERE OTHERS HAVE FAILED?

WILL NIGERIA AIR SUCCEED WHERE OTHERS HAVE FAILED?

The Nigerian government is making its third attempt at a national carrier with operations expected to launch in December 2018.

Officially named Nigeria Air, the airline’s logo and livery were unveiled at the Farnborough Air Show in London to mixed reactions at home.

The federal government will own just 5% of the airline in a public-private partnership proposal designed to allow for professional management and avoid previous mistakes.

The Nigerian government estimates that initial capital for the airline will range between $150m (£115m) and $300m in the first few years of operation though the private sector partner has not been identified yet.

“This will be a national carrier that is private sector led and driven. It is a business, not a social service,” Nigerian Minister of State for Aviation Hadi Sirika said.

“Government will not be involved in running it or deciding who runs it. The investors will have full responsibility for this.”

‘Improve infrastructure’
The original Nigerian Airways collapsed 15 years ago and a 2004 joint venture with billionaire Richard Branson named Virgin Nigeria shut down shortly after he pulled out five years later because of mismanagement.

Nigeria Air will take off with 15 leased aircraft in December but there are plans to own 30 planes within three to four years flying to 81 domestic, regional and international destinations.

Nigeria's Aviation Minister Hadi Sirika, a former pilot, promised the government would not be involved in running the new carrier

Nigeria’s Aviation Minister Hadi Sirika, a former pilot, promised the government would not be involved in running the new carrier

While many on social media celebrated the return of the carrier whose logo is a stylised eagle with Nigerian flag colours, other saw it as “propaganda” ahead of the 2019 presidential election.

Aviation analyst Aderoju Omololu is cautiously optimistic that the the airline can be successful if it grows gradually and strategically and engages industry experts in its management.

“The airline should be allowed to operate as a fully private entity,” she told the BBC in an email.

Nigeria’s main Murtala Muhammed International Airport in Lagos currently handles eight million passengers annually while Abuja’s Nnamdi Azikiwe serves five million, several times over their capacity.

Some Nigerians say the government should focus on overhauling outdated aviation industry infrastructure instead of investing in a new airline.

‘Vanity projects’
The reboot of the Nigerian flag carrier follows similar actions by the governments of Uganda and Tanzania as well as several other countries.

Uganda Airlines just ordered four new Bombardier CRJ 900 aircraft as well as two Airbus A330neo planes in a two-day shopping spree at Farnborough.

The revived Ugandan national carrier is due to return to the skies in April 2019, exactly 18 years after its debt-ridden predecessor was liquidated.

Air displays for prospective buyers were held at the Farnborough Air Show

Air displays for prospective buyers were held at the Farnborough Air Show

Neighbouring Air Tanzania is also flying again and expects to kick off its first cross-continental flight to Mumbai in September after it recently took delivery of a Boeing 787 Dreamliner.

Africa’s largest airline by revenue and profit, Ethiopian Airlines, made $2.7bn in revenue in the 2016/2017 financial year and carried nine million passengers.

Though fully government owned, a professional management with complete control has allowed it to turn its Addis Ababa base into a Dubai-like hub for 70 routes.

The Ethiopian national carrier, which already owns a minority stake in Malawi Airlines, has announced plans to help re-launch Zambia’s equivalent, a new airline in Mozambique as well as talks for smaller offshoots in Djibouti, Chad, and Equatorial Guinea.

Its CEO Tewolde Gebremariam met Mr Sirika, a former pilot-turned-senator-turned-minister, and other Nigerian officials at the Farnborough show to discuss plans for the new national carrier though a read-out of their conversation was not released.

Nigeria Air will look to follow the flight path of Ethiopian Airlines whose growth and profitability has exceeded its own projections while loss-making competitors Kenya Airways and South African Airways struggle to stay afloat.

“Mismanagement has killed Kenya Airways and South African Airways and most likely will in Nigeria Air,” said Ken Opalo, an assistant professor at Georgetown University.

“Most of these are vanity projects that will likely prove to be financial sinkholes. States should focus instead on improving airports and lowering taxes on airlines,” he told the BBC.

Years of losses
African carriers are expected to make a collective net loss of $100m for the second straight year in 2018, according to analysis by the International Air Transport Association.

“The continent’s governments need a concerted effort to further liberalise to promote growth of intra-Africa connectivity,” the industry body that represents 275 airlines said in its outlook last December.

Privately owned budget airline Fastjet was pulled from the brink of collapse in late June by a $10m rescue deal from its shareholders that will keep it airborne until the end of the year.

Budget airline Fastjet has failed to expand

Budget airline Fastjet has failed to expand

Internal wrangles and a failed expansion strategy have restricted its routes to just Tanzania, Zimbabwe, Mozambique, Zambia and South Africa.

Its woes are just the latest for an African airline industry held back by restrictive taxes, protectionism, expensive fuel costs and mismanagement.

Many airports across the continent feature old, abandoned planes from national carriers past that ground to a halt decades ago never to resurrect.

“I do not believe any government would seek to own an airline for ‘pride’ reasons,” says Omololu. “Pride is the result of operating a successful airline, that is the goal, not the motive.”

By Larry Madowo
BBC Africa business editor

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Nigerians in South Africa
Nigerians in South Africa 1587 posts

We are about democracy, human rights, public opinion, political behavior, civil rights and policy aimed at improving the human condition, with a focus on African countries.

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