Nigeria Air: Why is it important to launch a national airline?

On Wednesday, 18 July, Nigeria announced the relaunch of its national airline, to be named Nigeria Air. The announcement was made by the Nigerian Minister of State for Aviation Hadi Sirika at the Farnborough air show in England. This was the culmination of a process started in August 2015, when the Nigerian Government, under President Muhammadu Buhari, setup a 13-member committee to consult with international partners for the establishment of a national airline. The reaction to this news by Nigerians has been mixed, with one of the prominent comments coming from Rueben Abati, Special Adviser on Media and Publicity to former president Goodluck Jonathan, who asked, “why do we even have to create a brand new national airline from the scratch?”

The Nigerian government is already in control of private airlines Arik Air and Aero Contractors, indebted to the country through the Assets Management Company of Nigeria (AMCON). This ownership can be seen as iterations of the nation’s foray into commercial air transport after Nigerian Airways, which stopped its 45-year operations in 2003 amid reports of mismanagement. Nigerian Airways was succeeded by the Jimoh Ibrahim led Air Nigeria, which ran from 2005 to 2012. Ibrahim, too, faced accusations of mismanagement, including reports of 6 billion naira worth of transfers going from Air Nigeria into his other businesses at the time, Nicon in 2010 and 2011. Ibrahim shut the airline down, claiming “unreliable staff” as his reasons, bringing an end to a rebranded Richard Branson effort, which the British billionaire had abandoned due to alleged government interference.

Since making it a campaign promise, the Buhari administration has been adamant in finding ways to fulfill the dream of another national airline. Last year, Reuters reported the existence of an APC transition paper which “proposed merging a dozen debt-laden airlines on AMCON’s books into a single carrier. It would include Arik and operate in partnership with a global airline to serve the West and Central African region.” From all indications, the administration’s fixation on a National airline is the result of an admiration of Ethiopia’s successful national airline. Ethiopian airline reported a 10 percent increase in revenue to $2.4 billion for 2015/2016, 70 percent rise in profits, and 18 percent climb in passenger numbers to 7.6 million. And last year, the airline had submitted an offer to take over management of the AMCON-controlled Arik Air.

Beyond the allure of matching another African country’s success, there aren’t enough reasons to justify Nigeria Air. The potential for profit is surely not something to consider, given that Nigeria isn’t known for shrewdness in business. There’s a higher chance of mismanagement than efficient running of the airline, even with the low stake (maximum 5 percent) the government is projected to have in the private-sector driven airline.

Perhaps the hope is that Nigeria Air stirs enough nationalist fervor in the country, but there’s no evidence that this will be enough to staunch growing discontent about the state of the country under the Buhari administration. The plan of the government, according to the statement released, is to “provide initial capital and let the private sector manage the airline without interference….” This initial capital is estimated at “$US 150 to 300 million, invested in tranches over time from start up through the first few years of operation.”

In a country that was just announced as having the highest number of poor people in the world, the question of who such financial investment—as is projected to be sunk in the National airline—serves is one that has to be pondered. Government policies like the import ban on goods and subsidy for some petroleum products are already skewed in favour of the middle and upper class, and against the lower class that makes up a bulk of the country.

Why the government considers this national airline an imperative will remain puzzling, open to cynical interpretations like its potential to be used for propaganda in the imminent campaign for a second term by the ruling party. By year 5, the government hopes “to be carrying over four million passengers and have a fleet of 30 modern narrow- and wide-bodied aircraft.” That’s a projection that hopes to surpass the current administration, even after a second term. But those familiar with Nigeria, however, know that to get lift-off of Nigeria Air at year one will require a miracle of Sully proportions.