8 November 2012

Nigeria: Issues On FG's Planned Introduction of National Carrier, Acquisition of 30 Aircraft

Lagos — The Minister of Aviation Princess Stella Uduah recently told Daily Trust in an exclusive interview that, as part of its four strategies to grow aviation in Nigeria, the federal government would before the end of the year, complete work on a National Carrier and also acquire at least 30 new aircraft to support local airlines. This, she explained, is a new mode of intervention since the previous N300 billion the federal government gave the airlines some two years ago failed to yield the desired result.

On the National Carrier she explained that "a national carrier that represents our pride as a nation and will be managed by professionals. We are going to have core investors that will be the promoters of this. We will have it transparently and the criteria of who becomes the core investor will be advertised. We will have a consultant that would bring out the criteria and whoever wins, takes it. The rest would go to the open market for subscription."

But some experts have raised concerns on these policies. While some welcome the ideas, some said it is not good enough.

Mohammed Tukur, the Executive Secretary, Airline Operators of Nigeria (AON) speaking to our correspondent on the minister's plan to acquire 30 new aircrafts for the aviation industry said "the Minister of Aviation has gotten it right. As far as airline operators are concerned, we won't condemn the minister on this. It is a welcome development. The minister and the government have done a lot for the aviation industry and it should be commended. Recall how the first bailout from the CBN was used. If the government now says rather than give the airline money, we will set up a company that would acquire the aircrafts or government will acquire directly and give to local airlines who need them, it would be great."

"All the airlines need do is put down their AOC and get the aircrafts. There is a lot of benefits, it will create opportunities for the airlines to create jobs, expand operations and grow their business. But if you give them the money, they may take it and do some other business other than aviation. This model is in the right direction and the best way to improve our aviation industry," he said.

He however noted that the government should allow those who have the resources to invest in aviation even if they don't want the aircrafts the government wants to buy.

"We know what the minister is going through from some operators who are bent on blackmailing her without letting her succeed but we support her because she is trying. However, she needs to fast track the process. Also we need brand new aircrafts. So whatever model they want to adopt whether it is by creating a leasing company or adopting some other means of giving the aircrafts to the airlines, its fine by me provided it's transparent, done by professionals and satisfies Nigerians.

"We welcome more aircrafts and more airlines to drive down the cost of airfare. It is too expensive at the moment as air tickets to Abuja from Lagos costs sometimes over N35,000. It's too much," he noted.

But on the national career, Tukur noted that "for me, I am not in support of a national carrier but it is my personal opinion. What is the national career for when we killed Nigerian Airways? We put a law and liquidated Nigerian Airways and sold it at peanuts. Now the government still says they want to form another national carrier, would they go back to the National Assembly to create another law? or would you call IRS, AERO or Arik to say come and become a national carrier? or would you bring a new company and make it a national carrier, what happens to Air Nigeria?" he wondered.

According to captain Dele Ore, the President, Aviation Round Table who also spoke on "we have always said it but people don't want to appreciate the fact that a national carrier isn't necessary. The idea of a national career is archaic. Government doesn't run business efficiently.

"For government to have a hand in putting a national carrier together, government is looking for trouble. If you set up a national carrier it means you are setting up a competition against the existing ones. If you are an operator that has invested money, how would you feel? They should be careful even though we cannot stop them, we wish them good luck."

But the managing Director, Belujane Konzult, an aviation consultant, Mr. Chris Aligbe noted that a national carrier would also be relevant to the Fly Nigeria Act currently being considered in the National Assembly.

"The national carrier that the minister is talking about is commendable and should be supported because the model and philosophy diverse markedly from the rested Nigerian airways. In her model, the government will not be involved in the management of the national career but the private sector would" he said.

He explained that those who liquidated the Nigerian Airways did it out of selfish interest and out of error, adding that they were informed not to do it but because personal interest overrides national interest, they went ahead and killed Nigerian Airways.

"We gave them instances that those that liquidated their national carrier never survived it. Countries like Uganda and Tanzania did it and failed. We told them all these but their selfish interest overwhelmed them, they collapsed the Nigerian airways left behind huge pension liabilities they have refused to pay,"he noted.

According to him, the act of selling Nigerian Airways has snowballed into the several failings in the aviation industry because there are no standards to benchmark, adding that the national carrier, like a Nigerian Airways would have provided the needed benchmarking standards in the industry.

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