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Nigerian Airline Status 2022 – What is next in 2023

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By Prof. Tilmann Gabriel

For the last 70 years, Nigeria is aiming to develop a healthy airline industry, originally as a one national airline construct, as so many other nations, then leaning towards a minority share with reputable airlines, now focusing on a primarily private airline industry, as customary in most economies around the world.

The only successful airlines in Africa are currently all owned by the respective Governments: Ethiopian Airlines, Royal Air Maroc, Egypt Air. Most other national carriers owned by their Governments like Kenya Airlines, South African Airways, Air Mauritius etc are struggling to survive, only possible by significant annual subsidies from the Government. What is the truth then, looking at this airline business, specifically in Africa?

Business is an infinite game, never ending, with new rules and new players all the time, frustrating for executives and employees to remain the number one, never sure if this is sustainable for the years to come. ‘Too big to fail’ is a book that describes the dilemma of executives who have to innovate a huge company to stay abreast with changing rules and aggressive new players. IBM, General Motors, Sears and others are such examples, and airlines like PanAm, TWA, Alitalia were considered too big to fail.

In Nigeria, the largest African nation by people (220 million, going towards 400 million in the next 30 years), all initiatives to launch a sustainable National Carrier were doomed to fail. Nigeria Airways, founded in 1958, was the longest symbol of Nigerian national pride. The author counted some 130 AOC (Air Operator’s Certificate) holders in Nigeria, which went under in those 70 years of Nigerian airline industry, assuming this is a world record. Many of these 130 airlines were only flying for a few years, after spending lots of money (an airline launch costs at least 150M USD today), energy and disappointed hopes. Nigeria Airways was the longest existing airline so far, shut down in 2003, after 45 years in the domestic, regional and international skies.

Key reason for the demise of Nigerian Airways was the involvement of the Nigerian Government, dictating fares, rules, and free tickets for many. No airline can survive such intervention in the revenue creation. Sucking the lifeblood out of an airline, which has critical costs in the US dollar (aircraft leases, fuel, foreign fees), is a sure recipe for failure. Eventually, the then Government was no longer able to substitute such failure. What happened with the next hope of a successful Nigerian airline project, Virgin Nigeria? An agreement for Virgin Nigeria, to use the same terminal for domestic and international operation in Lagos, was no longer honoured by the new Government elected in 2007. Eventually, the 51% Government majority share in Virgin Nigeria was left with the pull-out of Virgin’s 49%, and with it the loss of the international relations and the Virgin supplied aircraft. Successor Air Nigeria was not able to survive without the Virgin assets and expertise.

Why is Ethiopian Airlines successful then as a 100% Government owned airline. Not a short story. Over 70 years it grew mainly organically, slowly and with realistic budgets and expectations. The main difference was that the Management, still led today by the highly regarded Girma Wake as Chairman, was never directed by the Government and by the inevitable changes of Governments in a democracy. Today, Ethiopian is the leading African Airline, with a 20% profit margin and a strategic plan to double its fleet of 130 aircraft by 2035. Vision, strategy, and a highly competent management governed by a Board of experts is the key for success. Disruptive innovations, adjusting to the fast changes in aviation (for example ET’s new cargo focus during the years of Covid), lean cost structures and as a reliable contractual partner with its lenders and aircraft lease companies, have made Ethiopian a valuable African airline, winning awards, and global recognition.

Is this possible in Nigeria as well? The Buhari Government, early on in its 8 years of ruling, agreed on an aviation roadmap with a National Airline, a leasing company, a maintenance company, and an Aviation University as its key components. Under the Minister of Aviation Hadi Sirika, all these roadmap projects are well under way, proof of a successful strategic political direction of this Government of the last eight years. It is important that the next elected Government continues this direction and present a stable aviation industry in Nigeria to the world, based on international aviation laws and supportive political governance.

The Private Public Partnership (PPP) concept which governs all these aviation projects, ensure that it is not the Government and taxpayers’ money, which the success of these aviation companies is based on, but a consortium of industrial investors, carefully selected by the independent Infrastructure Concession Regulatory Commission (ICRC) governed privatisation process. This way the Government has initiated its political strategy to create a profitable aviation industry in Nigeria but sustain from political influence and the reliance on taxpayers’ money.

The African continent is looking into a brighter future, the aviation industry is going to grow rapidly, far behind the rest of the world. Airlines will be a key infrastructure development for the continent, driven by the African Union agenda 2063. African free trade, combined with an open sky for African based airlines is the prerequisite for this development, which shall improve the infrastructure of the continent and contribute well above 5% to the country’s Gross Domestic Product, but also create tenths of thousands of jobs. The Single African Air Transport Market (SAATM) will be the frame for the success of those African airlines which get it right. Serving not only their own country but many of the 54 African nations, as flying between those nations will be enabled by SAATM. It is high time that Nigeria therefore has a strong domestic airline to cope with the SAATM challenges of an Africa wide competition.

The existing airlines in Nigeria are organised in the Airlines of Nigeria (AON), and Nigeria Air, the new National Carrier, has meanwhile applied for its membership as well, becoming a respected party of the common interests of the Nigerian airline industry. Some member airlines objected recently against the Ethiopian shareholding (49%) in Nigeria Air, starting a court case, which will be heard on 16 January at a Lagos court. The Aviation Union called this recently an unpatriotic attack on the interests of Nigerian aviation. At the end, Nigeria Air will be launched, the AOC application is in ‘phase three’ at Nigerian Civil Aviation Authority (NCAA), the launch is very near. The PPP process governed by ICRC is also about to close, with the Federal Executive Council’s approval of the contracts with the investor consortium to be signed shortly. The decision process of selecting the preferred bidder consortium of respectable Nigerian owners and Ethiopian Airlines was completely transparent and managed by the ICRC governed PPP procedures.

Nigeria Air is ready to launch with a fleet of Boeing 737 on domestic services, is currently recruiting many Nigerian aviation professionals to help start the airline operation. The Operations Control Centre at the Abuja Airport is ready to be opened with most modern IT systems. The booking engines on the airline website and App will be available shortly with loyalty credit cards and other innovative pay systems. The immediate goal is to introduce all up-to-date customer service systems to make flying a pleasurable and easy-to-use enjoyment.

Nigeria Air will be a new competitor in the Nigerian market, adding to the existing airlines. As Michael Porter taught us many years ago, the five factors of competition are for all businesses to recognise, amongst them that all competition creates new business for all, as the customer has added choices. In short, the new year 2023 will have added choices for domestic flights for all customers, soon also on the regional and international markets. Nigeria Air has the strategic direction, with a solid business plan for the next ten years and a start-up budget of 250 million US dollars. The Nigerian Government only invests 5% into this start-up funding (12.5 million US dollars), in line with its 5% share in Nigeria Air. By the transparent and structured PPP process the Government has ensured a clear ownership structure, including the leading African airline, with a secured start-up budget which gives Nigeria Air a solid financial foundation. The Buhari Government had promised a new aviation industry which the future of Nigeria can rely on. It took hard work by the many involved, driven by a Minister of Aviation never tired of pushing this Buhari strategy in the last seven years.


Prof. Tilmann Gabriel lives in Abuja and researches and works on African aviation projects.

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National Carrier to be Launched Before Buhari’s Exit, says Aviation Minister

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By Elizabeth Okwe

The Federal Government has given the assurance that all impediments against the establishment of the National Carrier, Nigeria Air, will be removed to enable it take to the skies before May 29, 2023.

Minister of Aviation, Sen. Hadi Sirika, who gave the assurance at the National Aviation Stakeholders Forum 2023, on Thursday in Abuja, said the Federal Government is taking necessary measures to overcome the hurdles introduced by the indigenous airlines that went to court to stop the process.

He described as unfair the action of the local airline operators, saying that the Buhari government had supported local airlines to stabilise and grow more than all previous governments.

Sirika described their action as constituting a stumbling block to the realisation of the national carrier project which will impact positively on job creation and better opportunities in the industry.

According to the Minister, the Nigerian Aviation industry is the only one in the world where qualified pilots are without jobs while in other climes there’s shortage of pilots.

“About 50 pilots had come to me at a time complaining about their unemployment status, and I believe that the national carrier should be able to employ more pilots and create other job opportunities” he said.

The reason for this, he said, was because of domestic airlines preference for foreign pilots and other operational staff and advised them to begin to put the nation first in their recruitments.

He described Ethiopian Airlines, the preferred bidder for the national carrier as amongst the very best that the industry has, with over 200 aircraft, highly profitability, one of the best training institutions and a Maintenance, Repair and Overhaul (MRO) facility.

The Minister further reiterated that with the population of Nigeria and Ethiopia, the two largest in Africa, and Nigeria’s location at the center of the continent, Nigeria Air will be able to play a major role in the Single African Air Transport Market (SAATM).

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Aviation Minister to Host Stakeholders on Developments in the Sector

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(File photo)

In continuation of the established tradition of regular interactions with major players in the aviation industry in Nigeria since the inception of the Buhari administration, the Minister of Aviation, Senator Hadi Sirika will host aviation stakeholders on Thursday 23rd March, 2023 in Abuja.

A statement by the Special Assistant to the Minister on Public Affairs, Dr James Odaudu said the idea of the regular meetings has been to ensure that all industry Stakeholders are carried along, and make inputs in the development and implementation of programmes and policies for the success of the industry.

The statement also explained that the Stakeholders’ Forum, the 10th of the kind, is to bring together all relevant Industry Players to brainstorm on the Policies and Programmes that have, and will continue to move the nation’s aviation industry forward and set it as one of the best in the global aviation community.

“The Forum will assist the Federal Ministry of Aviation and all its Agencies to have direct contact with the very important Stakeholders in and outside the industry, articulate ideas on the way forward and brainstorm on the developments within the sector as a whole.

“The Forum is also expected to afford the Stakeholders another opportunity to ventilate their opinions on the journey so far, and ensure that policies and programmes implemented in the aviation industry mirror the expectations of Nigerians, and truly lead to the socioeconomic and national development of the nation”.

It quotes the Minister as saying that the Forum will also seek to provide answers to pertinent questions, provide sensitisation and clarifications on policies and programmes, provide awareness on activities of government and non-governmental organisations in the industry.

The Forum which is expected to be declared open by the Vice President, Professor Yemi Osinbajo will bring together all relevant industry players within and outside the industry namely; The Ministers of Finance, Budget and National Planning, Labour and Employment, Health, Agriculture, Transportation and Environment.

Also expected at the Forum, aside the regular aviation sector players, are the Secretary to the Government of the Federation, the Head of Civil Service of the Federation, Accountant General of the Federation, Chairman, National Salaries, Income and Wages Commission, Director-General, Budget Office, Presidential Committee on Salaries, and CEOs of Media establishments.

According to Odaudu, Senator Hadi Sirika, since assumption of office as Minister of Aviation, has made it a point of duty to hold regular consultations with Stakeholders in the industry including Airline Operators, Labour unions, service providers, regulators etc, especially on the implementation of the Aviation roadmap which was put in place by the Buhari administration.

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Foreign Airlines Trapped Funds Rise to $743m, as Aviation Minister Assures IATA of Intervention

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By Aduku Odaudu

Despite government’s past efforts to tackle the issue of blocked funds of foreign airlines, the amount has increased to $743,721,097 from $662m in January 2023, the the International Air Transport Association has reported.

In a letter presented to the Minister of Aviation, Senator Hadi Sirika, signed by the Regional Manager West and Central Africa, Dr Samson Fatokun, IATA called on the minister to intervene so the foreign airlines can repatriate their funds.

“For over a year, Nigeria has been the country with the highest amount of airline-blocked funds in the world” the letter indicated.

IATA reckoned that the “trapped funds sends a strong message against FD! The increasing backiog of international airlines blocked funds in Nigeria sends a strong message against foreign direct investment (FD!) in Nigeria. Potential investors are reading from the plight of the airlines that they would not be able to expatriate their funds from Nigeria even al this moment when Nigeria is expecting investments in the concession of some of its prominent airports.”

Dr. Samson Fatokun said that it’s important Nigeria respect contractual obligations Foreign airlines fly into Nigeria within the legal framework of the Bilateral Air Service Agreement (BASA) signed between their countries and the Federal Republic of Nigeria.

The IATA/Foreign Airlines delegation with Senator Hadi Sirika and the Permanent Secretary, Dr Emmanuel Meribole

He noted that it is agreed in those BASAs that Nigeria will facilitate the repatriation of.the funds.

He said this has also led to high-ticket prices to mitigate the increasing backlog of these funds in Nigeria and its impact of their cash flow, some airlines have decided to reduce the number of their frequencies, or the number of seats made available for sale in the Nigerian market.

Commenting, the Minister of Aviation, Sen. Hadi Sirika said the “government is concerned especially the ministry of aviation. I am sure you are all aware that this is not a problem that is currently within the leverage of the ministry of aviation if it were to be here it would be resolved today.”

“Unfortunately, it sits somewhere else more with the Central Bank of Nigeria who in turns keeps saying it is between them and the commercial banks” he further explained.

“We will do the very best we can to resolve this matter soon” he promised.

“We will begin from today, we have been doing the best we can because we understand the importance of the services being provided and also the legitimacy of the request because it is something that is backed by the Bilateral and multi-lateral Agreements and something that is the law itself so there is no reason why it should continue to remain” he assured.

Aviation Permanent Secretary, Dr Emmanuel Meribole, Minister of Aviation, Senator Hadi Sirika and the IATA Regional Manager for West and Central Africa, Dr Samson Fatokun during the visit

He also urged the airlines to bear with certain situations, adding that the way they deal with the matter is not the best way to deal with issues of sovereign and in this case some of the airlines that decide not to come to Nigeria, it is a commercial decision you take which is fine but to do other things to show some resentment to the country is not acceptable.

“Some go to the extent of saying that they are not allowing Nigerians to go or no visa issuance which I think is anniversary and uncalled for; we do know that we need your services but we are very convinced that you need our market more that we need your services. I think Nigeria should be treated with some level of dignity and honour” he quarried.

“From your document here Qatar Airways has $208m blocked, Ethiopian Airline with $117m blocked. These are the major tickets and IATA $216m which is the highest while Emirates is $35m” he said.

“I know certain payments have been made. At some point when we decided to closed down Abuja airport for rehabilitation and to move to Kaduna. All of you foreign airlines refused to go to Kaduna which shows that you are only interested in what you can gain from a country which is the money but you are not willing to give anything.

“Some of you approached me and said you do not have were your crew will stay so you can fly to Kaduna. But we provided hostels that were better equipped than most hotels in town, good catering services, still you refused to identify with us”

He charged them to always adopt the give-and-take attitude in business relationships.

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