Scenarios with Obadiah Mailafia

July 24, 2018

So much hot air about Air Nigeria

Nigeria Air

By Obadiah Mailafia

I WAS rather intrigued to learn of the launching of Nigeria Air, our new national carrier, which is scheduled to take-off in December.

Aviation Minister Hadi Sirika announced that the total capital involved amounts to US$300 million while the berthing cost is US$8 million. As we understand it, the national carrier will largely be private sector-driven, with government owning only 5% of the shareholding.

The minister also revealed that the government was talking to other prospective investors in addition to Boeing about using airbus in its fleet.

First of all, I am rather surprised that we are actually referring to this new company as a “national carrier”. A new commercial airline that awards 5% shareholding to government could hardly be referred to as a “national carrier”.Nigeria Air

Most national carriers should have at least 40% public share ownership to be called such. I therefore do not think we are right to designate a largely private-owned airline as a “national carrier”.

The rather opaque and secretive manner that this so-called “national carrier” was brokered leaves many questions unanswered? Who are its primary promoters? Are they Nigerians or foreigners?

What are the security implications of designating a largely private commercial airline under the status of a national carrier? If the key investors are largely foreigners, the veil on who these promoters are ought to be opened up.

Two major problems also arise. In the first place, it’s not clear whether this new airline will go through the usual processes of obtaining the industry’s standard Air operator Certificate, AOC.

We understand that these processes do follow various steps involving pre-application, a document compliance phase, then a demonstration and inspection phase, culminating in final certification.

There is also the problem of the legacy issues surrounding the defunct Nigeria Airways. We may be right to suspect that the founders of the new “national carrier” aimed to circumvent those liability issues by brokering a private sector driven successor that is different from the old Nigeria Airways.

At has been reported that the Secretary-General of the National Union of Air Transport Employees, NUATE, Olayinka Abioye, has warned that the new Nigeria Air will not take-off until all outstanding entitlements have been paid to the former staff of the defunct Nigeria Airways.

It is estimated that the federal government owes more than N45 billion in salary and pension arrears to the thousands of former staff of the defunct Nigeria Airways. What the unions are saying is that the successful take-off of the new national carrier is conditional upon payment of these arrears.

As the government works towards launching a new national airline, we need to take stock of certain sober lessons. First, we need to reflect carefully on the lessons why Nigeria Airways failed and also learn from other successful carriers as to what they have done right to sustain their own airlines.

At its peak, Nigeria Airways was one of the best airlines in the developing world. It had more than 60 aircrafts in its fleet, ranging from Airbus A310-200 to Boeing 747-200, Boeing 767-200 and the Douglas DC-8-50.

As fate would have it, I took the last Nigeria Airways flight to Heathrow Airport London in January 1996. Immediately we landed the British airport authorities impounded the plane. It was alleged that it suffered from poor maintenance and that the door had not been properly locked when it was air bound from Ikeja, Lagos, and that it was a miracle how we landed without any problems.

Nigeria Airways suffered from a number of problems: poor management, political interference and over-staffing. It was the norm in those days that any Minister of Aviation or Transport was entitled to carry his family free of charge to any destination on Nigeria Airways. Ditto for goods and baggage.

As a student in England, I have anecdotal evidence of airways staff on ground who used to register in excess baggage for clients, friends and families for payments that went straight into their own pockets. Government ministries and departments bought tickets on credit for their staff that were never intended to be paid back. Government officials could instruct management to give jobs to relations that were hardly qualified.

Apart from this, technical maintenance of the fleet remained a problematic issue. It was the common practice for technical managers to write fictitious reports that an aircraft part was damaged. They would raise vouchers for maintenance works and purchase of spare parts, only to polish and bring back the old part which was passed for new. Nigeria Airways safety record could no longer be guaranteed.

It is also important to learn from successful foreign national carriers. Among the best in the developing and emerging world are: Ethiopian Airlines, Singapore Airlines, Air Mauritius, Etihad and Malaysian Airlines. What have these national carriers done that sets them apart?

Consider the case of Ethiopian Airlines. It was founded in 1945 by His Imperial Majesty Haile Selassie of Ethiopia. Before its founding, the country had few tarred roads. And because of its inaccessible mountainous terrain, Emperor Haile Selassie encouraged the use of light aircraft to reach the interior of the country.

The Italian occupation during the war years and the heavy air bombardment of the defenceless Ethiopians made it clear to the Emperor that aviation was a strategic industry. He built a national carrier that would stand the test of time.

Today, it is a multi-billion dollar company with the largest assets and with the farthest reach by far throughout our glorious continent.  Although a wholly government-owned enterprise, Ethiopian Airlines is run on fully commercial principles. Leadership of the organisation is based strictly on merit. Professionalism is the sole basis for recruitment.

Even in the worst days of the Mengistu Dergue regime, the government studiously avoided any undue interference with the airline. It is remarkable that even in the darkest days of war and famine, Ethiopian Airlines continued to flourish.

Ethiopia is not a rich country by any stretch of the imagination. But they are easily the African champions as far as the aviation industry is concerned. They have a maintenance hub in Bole International Airport in Addis Ababa that also services the fleet of several other countries. Their pilots are among the best. Maintenance and safety records are second to none.

Other developing and emerging country airlines are also doing rather well: Etihad, Singapore, Mauritius and Malaysia are doing very well. They are well-run companies that operate on strong commercial principles. Governments try not to meddle unduly in their day-to-day operations. Professionalism is the watchword.

Careful attention is paid to quality, service, safety and standards. These countries also understand that a national carrier is not just a fleet that conveys people from x to y destinations. It’s also a national symbol. Experiencing a flight in a national carrier is probably the first and most lasting impression visitors would ever have about a country and its people. The beauty and grace of the hostesses, the in-cabin food, entertainment and the entire experience is part of the soft capital that enables a country to radiate positive influence across the world.

We are rather disappointed that the new Nigeria Air is being birthed in such an opaque and stealthy manner. The veil of incorporation must be revealed so that we know who the principal promoters are. It would be contrary to sound business practice for a small group of private investors to launch a national carrier in our name by giving a token, paltry 5% of the shareholdings to government in exchange for the humongous privileges of answering the name of a national carrier. We must also learn the lessons of why Nigeria Airways failed and what we can learn from other successful carriers in the emerging world.