Special Report

August 26, 2023

National Carrier: Facts, fallacies, ignorance

National Carrier: Facts, fallacies, ignorance

By Chris Aligbe 

In recent times, a huge controversy has arisen over the issue of National Carrier in the aviation sector. 

The cacophony of voices has been overwhelming as each voice struggle, as it were, to drown every other with his or her opinion.  Wading through the maze of opinions, one can find conceptual conflicts that leave one in doubt about how much grounding most of those holding them have.

In today’s ongoing discourse, there is the prevalence of concepts like National Carrier, National Flag Carrier and Flag Carrier.  In quite a number of cases, proponents confuse the concepts and use them interchangeably, thus muddling their positions unwittingly.  This is common with those who find no difference between a Flag Carrier and a National Flag Carrier, or a National Carrier with a National Flag Carrier.

There are also those who advocate that the Government should designate any Private airline operating assigned BASA route, whether Regional or International as Flag Carrier or National Flag Carrier.   There are others who from their unfounded, misconceived and unsupported idea that National Carriers are no longer in vogue, urge the government to perish and quit any effort to float a National or National Flag Carrier. 

Even while they cannot cite one Private airline that was floated in the last twenty-five years that is in any global reckoning when airlines are counted; yet they fastidiously hold to their position.  To buttress their position, they cite British Airways privatized in 1989/90 by the then British Prime Minister, Margaret Thatcher, who sold it to British citizens through listing on the Stock Exchange after its turn around by Lord King and Collin Marshall, Chairman and Managing Director respectively.

With the Privatisation, ownership passed from the government to British citizens.  They do not see the difference between the Privatised citizens owned BA and the one-man owned Virgin Atlantic belonging to Richard Branson, a British citizen.  The proponents of this view also cite all US airlines – Delta, American Nat West, United South West as formidable global airlines that are not owned by the US government but have sovereign cover and government protection.   

Again, they miss the critical point and show lack of understanding of the concept of the prefix of “National” to airlines owned by millions of citizens of a country and the one owned by an individual or a family of same country.  They compare them with Nigeria’s Domestic airlines like Azman, Bellview, Medview and Air Peace owned by individuals and advocate they be prefixed with “National” with all the attached benefits. 

Again, these proponents miss the point that airlines quoted on the Stock Exchange are not only open to citizens desiring to acquire shares, the books of such airlines are open to scrutiny and corporate governance is mandatory, all of which make the sources of their income known in contradistinction to our private airlines.  The prefix of “National” implies “Sovereign cover” and no government will grant a Sovereign cover to any business operating internationally whose books and sources of funds are opaque as well as owned by an individual or family. 

Beyond these, what is more worrisome is that  some respectable mainstream print and electronic media as well as some Legislators, Policy Makers and erudite as well as acquitted professionals within and outside the Aviation industry have been sucked into this pipeline of bushy, untrimmed concepts and conceptions.  It has therefore become necessary to attempt a clearing work on the various conceptual strongholds.

The concept of National Carrier at inception at the end of World War II was used in the airline subsector to announce the birth and emergence of nations at the global level.  Airlines were publicity instruments for nations at the international arena while at the local domain, based on the social philosophy of their formations, they had and played the role of connecting peoples of their nations.  There was no commercial or profit motive. 

Thus, on accession to independence, new nations established airlines with the two motives which are to connect the peoples of their nation and foster social contact and economic integration at the domestic level while at the international level, such airlines announced and publicised the birth of a new nation.  These airlines were hundred percent owned, funded and managed by governments. 

Thus, most of them carried the names of their countries such as British Caledonian, the precursor of British Airways, Air France, Royal Dutch – KLM, Turk Hava Yolari – Turkish Airlines, Singapore Airlines, Ethiopian Airline, Egypt Air, Royal Air Maroc, Air Tanzania, Kenya Airways, Air Namibia, Ghana Airways.  Nigeria Airways followed this trend when at inception of independence in 1960, it bought over the shares of Elder Dempstar and British Overseas Airways Corporation – BOAC in the then West African Airways Corporation – WAAC to float Nigeria 100%-owned Nigeria Airways Limited – NAL with an Act of Parliament in 1962. 

With this, NAL became the symbol of the New Nation called Nigeria with the concomitant Sovereign Cover just like any Nigerian High Commission or Embassy.  This was the origin of Sovereign Covers for airlines with government equity in part or in whole.

It is this sovereign cover that is the most critical element in aeropolitics.  Students of Politics tell us that elected governments hold whatever authority or sovereign equity they hold on behalf of the citizens.  When therefore through any decision, such as privatisation openly transfers this equity back to the citizens, ipso facto, it transfers Sovereignty to the citizens. 

Hence, any such product owned by the citizens of a country becomes a national product and when such a ‘product’ plays in international arena, it of right carries the emblem or insignia of nationhood.  This entitles it, as of right, to the appendage of “National” which is synomous with a “Sovereign Cover”. 

Again, those who proclaim National Carriers are no longer fashionable and out-modelled deliberately subsume in their arguments that over the last 25-30years, 95% of the airlines floated are all National Carriers, some of which have been partly-privatised and only very few fully-privatised with 100% equity sold through the Stock Exchange to millions of citizens or to companies quoted on the Stock Exchange.

In these cases, the status “National” (Sovereign Cover) still persists and is recognised in aeropolitics Airlines such as Emirates, Qatar Airways, Singapore Airline, Turkish Airline and Saudia are all National Carriers as they are all 100% owned by their governments in trust for their citizens.  While other Airlines like British Airways, fully-privatised, Tunis Air 64%/36% government/private equity, Kenya Airways – 46%/54% government/private equity and All Nippon with only 0.02% government holding as well as Air France 11% government equity and KLM 11% government equity are all National Flag Carriers and so fully recognised in international aeropolitics as their country’s representatives.  

The next class of Airlines are those floated by individuals but over the years became multi-nationals through privatisation and quotation on the Stock Exchange.  They, by this very fact acquire multiple citizenships of investing nations which implies multiple sovereign covers while remaining their country’s National Flag Carriers. 

Apart from Japan Airline Limited – JAL, the second National Flag Carrier of Japan, the classic example in this category is Cathy Pacific, the Hongkong National Flag Carrier, floated by two persons in 1946; Sydney de Kantzow (Australian) and Roy Farrel (American), but now fully-privatised.  Cathy Pacific shareholders include Swire – (HK) 45%, China Air (Chinese government) 30%.  Qatar government through (Qatar Airways) 10% and millions of others hold 15% bought from the Hongkong Stock Exchange.

Flag Carriers – These are airlines owned by individuals or families whose shares are not available to the public.  Flag Carriers are not floated by governments.  Any private airline that has a designation on BASA routes and flies out of the country such as Air Peace with Nigeria Call Sign – NG is recognised as a Nigerian (not National) Flag Carrier.  Flag Carriers have no sovereign covers.   

In Foreign Service, there is a big difference between a Diplomat and a Consular officer serving in their country’s Mission abroad.  The first has full Diplomatic (Sovereign) Cover while the second has not.  Private citizens and Companies from any country living or operating overseas have no sovereign or diplomatic covers.

 In Africa, only Kenya Airways and Tunis Air are National Flag Carriers while all others; Ethiopian Airlines, Egypt Air, Royal Air Maroc as well as recently floated Air Tanzania, Rwandan Air and Air Code Ivoire as well as Air Namibia are all 100% equity National Carriers.  The only upcoming private airline is Ghana-based African World Airways, which is not yet global.  In Nigeria, the most reliable airline is the sub-national Ibom Air owned 100% and well run by Akwa Ibom State Government.  It may be the first airline in Nigeria to attract commercial relationship with a major foreign airline.

Globally, the 20 best Airlines rated on Sky track are either National Carriers or National Flag Carriers.  No individually-owned Flag Carrier comes near global rating.

Finally, those who erroneously argue that government has no business in business should study Chinese economic global forays and success via Chinese State Enterprises and think again.

In the next piece, we will examine the quest for BASA review.

•Aligbe is an Aviation Consultant