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ASRTI faults new national carrier model, anti-competition drive

By Wole Oyebade
03 December 2021   |   2:47 am
Erstwhile advocates of a new national carrier project have made a U-turn, faulting the model of the proposed Nigeria Air that is scheduled for takeoff in April 2022.

Hadi Sirika

Erstwhile advocates of a new national carrier project have made a U-turn, faulting the model of the proposed Nigeria Air that is scheduled for takeoff in April 2022.

Members of the Aviation Safety Round Table Initiative (ASRTI), a think-tank group of the sector, flawed the five per cent equity stake of the Federal Government, wet-leasing airplanes for operation, preference of a national airline in place of the flag carrier, and its anti-competition tendencies.

Minister of Aviation, Hadi Sirika, recently announced that the Federal Executive Council (FEC) has approved the new national carrier with April 2022 as the new takeoff date.

Sirika, who had been angling for the carrier since 2016, said the public-private partnership model should accrue only a five per cent stake to the government, 46 per cent equity share to Nigerian investors and 49 to foreign partners.

He projected that the airline that would begin operations with three wet-leased aircraft and employ 70,000 Nigerians to surpass the Federal Government in job creation. The airline will also serve multiple international routes and the Single African Air Transport Market (SAATM) agenda of the African Union.

President of ASRTI, Gbenga Olowo, said the idea of the government owning stakes in the carrier is discriminatory to other local airlines and would be inimical to free competition. Olowo said the alternative should be replicating equal commitments to all other airlines.

“I think the government’s five per cent equity in Nigeria Air should be done for all 22 private Nigerian airlines on the ground, to level the playing field. If the government will be fair, it should give equal support to all; concessions for concessions, tax relief for tax relief, the same exchange rate for all, overflight charges, slot, terminal allocation, and so on, should happen to all equally.

“The right nomenclature should be flag carriers, not a national airline. Or, have the airlines come together under mutually beneficial codeshare/block seat agreement to build a united, strong mega carrier. That is, using the Nigeria Air project as the consolidator of all,” he said.

Olowo, who is the President of Sabre Network in Nigeria and West Africa, added that the idea of leased aircraft was unbefitting of Nigeria that has multiple bigger airlines, and about two in the care of Asset Management Corporation of Nigeria (AMCON) – a Federal Government’s debt recovery vehicle.

He said: “A national carrier startup with three wet-leased aircraft and no single Nigerian crew onboard is undeserving for the country. There are bigger operators like Arik and Aero that are already in government portfolios and lying-in-state. Why not add the three wet-leased aircraft to their fleets as stopgap, rebrand them Nigeria Air, and subsequently offer it to the public?” he queried.

Secretary-General of the body, Group Capt. John Ojikutu (rtd), said the government had spent too much time on the national carrier to come up with a faulty model.

Ojikutu said: “I was at the forefront of support for the project until recently. When I saw that the government is going to own just five per cent equity share, I gave up. Who are the other shareholders? We need to know the institutional investors. It (Nigeria Air) would most likely go the way of Nigeria Airways if care is not taken. What is the actual fund for the setting up of the airline? How much does the five per cent amount to?

“Government should set up a flag carrier and not a national airline. Government should not put a dime on this project. I am sorry to say that this airline may not last and may also end up like Virgin Nigeria. How many aircraft are they bringing? We need to ask questions. We should not bring in our competitors as shareholders in the new project,” Ojikutu said.