National carrier: Just rhetoric!
As the first public pronouncement by the administration after the “stepping out” at the Farnborough Air Show last July, what we justifiably expected to hear are specific steps taken on the comprehensive aviation road map announced to the world since 2016. Otherwise, the realisation of our laudable aspiration for a national carrier must yet wait till an undefined date.
As the second citizen of the country, the Vice President is certainly privy to the disposition of the current government on the matter. It is, however, not unlikely that the ministry would have a chronicle of actions taken along the critical path to the actualisation of the laudable goal of having a national carrier. On this, the information given is that “several international companies and local investors have come together and are planning to run the airline and carry the national flag.” Certainly, that does not indicate that the project has been suspended.
In a cabinet, each member must push projects of his ministry. Before the minister could announce to the world, much work should have been done by consultants and officials to create the Aviation Road Map with the goal of making Nigeria the aviation hub of Africa. The national carrier is a component. The comprehensive package includes the concessioning of some airports for efficient operations. To this end, the Ministry of Aviation had received a Certificate of Compliance from the Infrastructure Concession Regulatory Commission (ICRC). Furthermore, there is a plan to have an Aerotopolis, a facility for aircraft maintenance, repair and overhaul. Also planned is an aircraft leasing company. For the realisation of these specific goals, the processes do not stop.
Obviously, the December 2018 target for the “take-off” announced in July was unrealistic. How could it have been possible to do all that was necessary in five months, for the take-off of an international airline that the minister assured would meet all requirements of International Civil Aviation Organisation, pass the assessment of IATA Operational Safety Audit and attain fast membership of the International Air Transport Association (IATA)?
The Minister stated explicitly that Nigeria Air would ply 41 international and 40 domestic/regional routes. After the Farnborough unveiling, aviation experts promptly adjudged the 81 routes as unrealistic because many existing airlines with large fleets fly to Nigeria which is one of the most lucrative destinations for airlines.
The Federal Government had repeatedly said that in this endeavour, it is determined to avoid the mistakes that led to the collapse of the national carrier and its liquidation in 2003. A major difference now is that 95 per cent of the new venture will be subscribed by private inspectors. However, private investors were not conspicuously present at the Farnborough stepping out ceremony, despite the presence of many original equipment manufacturers seeking to sell their products. Between July 2018 and January 2019, how many international and domestic investors have actually committed funds? Progress report is needed on this.
After the unveiling, this newspaper highlighted the problem of suspicions that trailed the timing. It did not require a prophet to realise the uncertainty of the outcome because of the fluidity of the political environment. Would a venture being promoted by government be able to attract any serious private investors a few months to general elections? Those questions arose then.
There have been questions about the cost of the project too. At the time of liquidation, Nigeria Airways had debts estimated at 60 million dollars. There were also pension obligations to the staff whose numbers were allegedly bloated. It had only one aircraft for domestic operations and two leased for international routes. For the new venture, there had been numerous clarifications to the initial capital required ranging from $8 million to $300 million announced at the Farnborough press conference.
We had then concluded that these amounted to “unsuccessful launch of the product” and called for the need to go back to the drawing board. At this time, the Vice President has adduced “the quest for private sector investors” as the reason for “suspending” the project. This is a clear indication that the pertinent issues raised after the unveiling had not been addressed in the intervening months.
Our initial assessment of the project’s riskiness caused by an unstable political environment has been confirmed. Now that the polity is highly heated up on the eve of the national elections, this is no time to expect any serious investor -foreign or domestic- to dabble into uncertain waters. What we considered a “glimmer of hope” last July is now increasingly unveiling as the mirage we hoped against.
All told, we will continue to reiterate that government has no business in serious business beyond using policy instruments to create a conducive environment for operators and entrepreneurs. Our experience with government’s involvement with business through public enterprises has been a dismal failure. It is not a road we should take again.
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