Saturday, 2nd December 2023

Nigeria Air: How to float national carrier without rancour, borrowed planes

By Joke Falaju, Abuja
14 July 2023   |   3:19 am
On March 12, 2023, the Crown Prince of Saudi Arabia, Mohammed bin Salman, officially announced the establishment of Riyadh Air, the second national flag bearer of the country.

The recent unveiling of Riyadh Air in Saudi Arabia offers Nigeria vital lessons on how to roll out a national carrier – if it must be done at all, JOKE FALAJU reports.

On March 12, 2023, the Crown Prince of Saudi Arabia, Mohammed bin Salman, officially announced the establishment of Riyadh Air, the second national flag bearer of the country.

The airline is planning to be the largest in the Middle East in terms of revenue. It will operate domestic and international scheduled flights to over 100 different destinations in the Middle East, Africa, Asia, Europe, South America and North America.

Two days after the announcement, it was revealed that the airline had ordered 39 Boeing 787-9 aircraft, with options for 33 more aircraft. Unlike Nigeria Air – unveiled in 2016 at the London Air show by the immediate past Minister of Aviation Hadi Sirika amidst backlash from Nigerians over lack of consultation as many citizens got to know about the project when it was unveiled in London – Ryadh Air was launched amidst global cheers at the just-concluded Paris Air Show on the June 4, 2023 and with immediate footprints in international aviation.

The same day, Riyadh Air unveiled its first livery Boeing 787-9 aircraft, it received its airline designator code “RX” from the International Air Transport Association (IATA) at the World Air Transport Summit, which took place in Istanbul.

On June 12, 2023, the first aircraft was delivered to the airline’s fleet by Boeing and on June 14, 2023, the airline was granted the Passenger Air Transport Economic License by the General Authority of Civil Aviation (GACA), which is necessary for the airline to begin commercial operations.

Still on June 12, at the Paris Air Show, Riyadh Air signed an agreement for 90 GE Aerospace’s GEnx-1B engines to power its future fleet of 39 Boeing 787-9 aircraft.

According to the Saudi Press Agency (SPA), Riyadh Air will be a company owned by the country’s Public Investment Fund (PIF), with Yasir Al-Rumayyan, the governor of PIF, serving as its chairman.

Tony Douglas has been appointed as the Chief Executive Officer (CEO). He previously served as the CEO of UAE-based airline Etihad Airways from January 2018 until October 2022.

Riyadh Air is set to be a ‘world-class airline’, and is expected to add $20 billion to non-oil GDP growth and create more than 200,000 direct and indirect jobs.

Nigeria Air project, on the other hand, has been a suspect. Recall that the project is a Public Private Partnership agreement orchestrated by the former Minister of Aviation, Hadi Sirika, wherein Ethiopian Airlines owns 49 per cent, MRS owns 31 per cent, SAHCO owns 15 per cent while the Federal Government owns five per cent equity.

But the arrangement has not gone down well with many stakeholders, especially airline operators. The AON protested that the new carrier’s strategic partnership with Ethiopian Airlines gave it an unfair advantage that would stifle the growth of domestic airlines by monopolising domestic, regional and international routes.

There are no disputes about the numerous advantages of having a national carrier, but aviation experts think that the deal is not in the interest of Nigeria, Nigerian aviation or passengers.

However, some experts in their arguments in favour of the Nigeria Air project, said Riyad Air aircraft also used for the unveiling is registered in the U.S. under a Boeing registration number: N8572CT, saying that was the same as the Nigeria Air unveiling with ET registered aircraft but Nigeria Air livery.

An aviation expert, Captain John Ojikutu noted that Nigeria does not need a national carrier but a flag bearer. He said: “A country like Nigeria should not be talking about National Carrier but a flag carrier. What we need to have is an airline designated for inter-continental route and two carriers for regional and continental operations.”

“We have wasted too much time and money on the national carrier. Since 1993, they wanted to kill Nigeria Airways, and then they came up with Virgin Nigeria, but they still failed.

He said what needs to be done by the Nigeria Civil Aviation Authority (NCAA) is to come up with a commercial or economic report of airlines that are operating now, saying two of the airlines are good to go. He said if AMCON and the Federal Ministry did not mess up Arik and Aero contractors the two airlines would have been used to set up flag carriers.

“Most countries that had a National Carrier during the same period of Nigeria Airways have closed down. Even America does not have a national carrier; what they have is flag carriers, even British Airways is a flag carrier.” He said: “The former Minister of Aviation messed the whole process up. He is the only one running up and down. What about the remaining 95 per cent shareholders? If you are having an airline like that, you should allow the people with 95 per cent stake to control the whole process, and then come in when they are ready. It is only the government that is spending money, what about others?”

Ojikutu added that before designating an airline as a flag carrier, the government must ensure that 20-30 per cent of the shares are owned by the Nigerian public. He said, if the government must go into partnership with an airline, it must not be competitors on the BASA route. They can go to Europe or Asia to get partners, but not with a competitor on the BASA route.

“We have done it before; we have partnered KLM and South African Airways. It did not work, so we should forget about it,” Ojikutu said.
An Aviation commentator, Olumide Ohunayo, also submitted that “National carriers are usually owned and funded by the government. Most times, you see the government establish a national carrier where the market is closed. The dominant carriers are the ones owned by the government or the Middle East countries with excess funds.

“But in our case, we don’t have that excessive fund, with our multidimensional poverty rate, which is more important to get out of than running a national carrier.” He added: “With the domestic carrier that we have, we can build a strong flag carrier because we have the market. Government can provide the necessary support that will attract partners to them. That is why we should be looking at how to build a flag carrier from the present crop of carriers that we have. This is doable and that is what we should focus on.

“Sirika has his agenda, dream and purpose, which was higher than national interest, which is why everything he did ended up in litigation, protest and condemnation. The new minister, when coming in, needs to investigate all the projects by the former minister so that we don’t have partially functional projects,” Ohunayo said.