Africa: Analysts say Nigeria’s plans for a national airline are likely to fail
Nigeria’s quest to establish a national carrier has resumed fervently, with the listing of a N47bn ($155m) take-off grant in its 2019 budget.
According to a recent statement issued by the minister of state for aviation Hadi Sirika and reported in Nigeria’s Punch newspaper, “President Muhammadu Buhari directed that the viability gap funding for the project be provided for in the 2019 Appropriation which the National Assembly had graciously done.”
• The idea of Nigeria Air began last year, backed by Buhari, who has continuously spoken of the need for a national carrier.
• Despite talk of many investors being interested in collaborating on what is marketed as a public-private partnership – with government as a silent equity partner, owning just 5% of shares – the initial funding failed to materialise until now.
• The airline’s name and logo were unveiled last July at the Farnborough Air Show, a trade and investment roadshow in the UK.
• It was to commence operation with an itinerary of 81 routes. Forty of them were to be domestic, regional and sub-regional routes, while the others were to be full international routes.
The unveiling attracted a lot of controversy and criticism for the government, leading it to announce the indefinite suspension of plans not too long after.
Nigeria Airways has had a history of wobbles since it first set up shop in 195. It garnered a reputation for excellence, initially. It eventually fizzled out in 2003, and successive administrations have tried to resurrect it from the ashes of its past.
A number of foreign operators including KLM, British Airways, Virgin Atlantic and South African Airways had managed the airline before it ran aground.
Arik Air, which took over some of its facilities, also started out decently before innumerable complaints about poor customer service began to surface. In 2017, a backlog of debts led to it being taken over by the Asset Management Company of Nigeria, which is yet to find an interested buyer two years on.
Experts were therefore cautious during the announced rebirth of Nigeria Air in 2018, with some glad that the project was eventually suspended.
Anthony Kila, professor and head of the Centre for International Advanced and Professional Studies, mocked the abysmal planning, telling Punch that: “Nigeria Air was conceived on PowerPoint, shared on Adobe and died on Twitter.”
Another reminder of the airline’s inglorious history came earlier this week when pensioners of the old Nigeria Airways picketed the office of finance minister Zainab Ahmed, hoping to get an answer about the non-payment of their entitlements for years.
The bottom line:
Industry stakeholders continue to say the Nigeria Air project is likely to fail. Nigeria’s 2019 budget is anchored on an ambitious revenue projection of N7trn but it earned just half of that last year. If inflows follow the same pattern this year, the grant to begin Nigeria Air could put a serious dent in funding available for priority infrastructure, as capital expenditure amounts to just one fourth of the national budget.