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Stakeholders divided over suspended national carrier

By Wole Oyebade (Lagos) and Azimazi Momoh Jimoh (Abuja)
21 September 2018   |   4:14 am
Stakeholders in the aviation sector are divided over the fate of the national carrier. While some described it as a white elephant project that should be forgotten, others urged the Federal Government to ...

Stakeholders in the aviation sector are divided over the fate of the national carrier.

While some described it as a white elephant project that should be forgotten, others urged the Federal Government to rework its business case and equity and ownership structure, to attract reputable investors at home and abroad.

The government had on Wednesday suspended indefinitely the December 24 takeoff of the proposed carrier.

Though Minister of State for Aviation Hadi Sirika did not give reasons, The Guardian investigation showed that the development was not unconnected with investors’ apathy, ownership structure and funding issues.

Operators under the aegis of Airlines Operators of Nigeria (AON) yesterday commended the Federal Government for taking a bold step by suspending the project, saying the decision was in the interest of the nation.

The Chairman of AON, Capt. Nogie Meggison, said his members had noted that the process was not transparent and did not clearly define the role of private investors or address sustainability issues.

Legacy format detected for design:

“At this time of our national limited resources and struggle to recover from recession, AON would like to state that there are private Nigerian airline investors ready to invest and already investing heavily in the sector and are only asking for a friendlier operational environment and infrastructure support.

“Setting up a national carrier will cost Nigeria at least $3 billion. A single Boeing777 costs about $320 million.

Is it wise or is it our priority as a nation to take $3 billion from the coffers today and put it into a venture that will for sure go down the drain within a maximum of five years?”

He noted that a national carrier would need an additional cash injection of $500 million in subsidy per year on average for the next 10 years to keep the airline afloat.

“AON believes government should focus on governance and let businessmen do business.

Or, as I always say, government has no business in business,” Meggison added.

The Aviation Safety Roundtable Initiative (ASRTI), an industry think-tank, said Nigeria needed a carrier in the status of Nigeria Airways in its heyday to be relevant in aviation’s global community.

The group, however, called for clarity on the plan and better equity and parity between Nigerian and foreign investors.

Its chairman, Gbenga Olowo, said ASRTI would encourage not just minimal involvement of government in the process but also restriction.

This would give a level playing field to Nigerian investors.

“If and when, as expected, this process goes ahead to the finish line, it would be helpful to consider the employment of reputable headhunters in the nomination of even the startup management team.

This is because ‘management challenges’ played a prominent role in the demise of previous attempts.

“We expect government to carefully and transparently work on the involvement of operating local airlines that may be seriously considered.

ASRTI’s position is patriotic and geared toward avoiding the possible colossal and usual loss of both revenue and man-hours from our commonwealth, as experienced in past unguided attempts,” Olowo said.

The Secretary general of ASRTI, retired Group Capt. John Ojikutu, explained that the buildup must start all over again.

He said it was a task that must be done if we must be relevant in international routes and fulfill our obligations to the various Bilateral Air Service Agreements (BASAs).

He proposed that the new design must have not more than 10 per cent holding shares for federal and state governments; 40 per cent for foreign technical investors; and 20 per cent for credible Nigerian investors and the Nigerian public through Initial Public Offer (IPO) to own 30 per cent.

“I became suspicious of the programme when the minister came out with five per cent for the Federal Government and 50 per cent for private investors, without mentioning who the technical investors or foreign investors are and to whom the remaining 45 per cent holdings would go to.

“The suspension of the national carrier means that government could not get its acts right.

Why should the project not fail, when some of us have raised concerns about the equity structure and the modalities they claimed they were going to use?” Ojikutu asked.

The General secretary of the National Union of Air Transport Employees (NUATE), Olayinka Abioye, on his part, said the government must settle all severance pay and the pensions of staff of the defunct Nigeria Airways to earn credibility.

Until this is done, the unions would not support the project, he said.

But the opposition Peoples Democratic Party (PDP) demanded the arrest and immediate prosecution of Sirika for allegedly using a non-existent carrier to defraud the nation of N1.2 billion.

The party, in a statement released by its national publicity secretary, Kola Ologbondiyan, said President Muhammadu Buhari should speak out on “this act of corruption under his watch, particularly following allegations that funds released for the phantom project were diverted to finance his 2019 re-election bid.”

The party said: “The purported indefinite suspension of the Nigeria Air project is part of the fraudulent script by the Buhari presidency, which knows that it cannot go far with the lie, since the project does not exist in the first place.

“We had in July alerted the nation that the unveiling of a non-existent national carrier was a huge scam designed to create an impression of achievement, as well as a conduit by corrupt All Progressives Congress (APC) leaders and the Buhari presidency to siphon public funds for selfish purposes.

“Nigerians now know the reason for the rush to London to ‘unveil’ mere drawings of airplanes, name, logo and imaginary routes of a non-existent fleet as our national carrier, without any structures, operational licence, clear partnership agreements and no form of ground activity any where in our country.”

The statement continued: “What the APC and the Buhari presidency failed to understand is that lies, no matter how ornamented, always have expiry dates.

The truth might be suppressed for a while, but it always has a way of coming to light.

“It is now clear to the world that the Buhari administration is corrupt and lacks the capacity to productively engage acts of corruption.

This is the major reason our economy went into a recession and foreign investors have lost confidence in our nation.

“The PDP demands that the N1.2 billion be immediately recovered and directed to critical interventions in the aviation sector, including the unpaid pension owed retired aviation workers.”