A requiem for Nigeria Air

Against the backdrop of the massive corruption and ineptitude that plague Nigeria presently, the decision by the Federal Government to suspend the much advertised new national airline named, Nigeria Air, is a positive step in the right direction. Let the suspension be indefinite and let the idea fizzle out from there so that the pipe is pluged.

Nigeria can hardly afford to cough out a whopping “N180 billion ($500 million) subsidy per year on average for the next 10 years to keep the airline afloat, while about 97 per cent of the 200 million Nigerian masses today are grappling for the basic necessities of life; food, shelter, electricity, water, education and good roads,” according to experts.

Floating a new airline at this time, no matters its positives, would amount to increasing the work load of the Economic and Financial Crimes Commission (EFCC) because, some corrupt unscrupulous individuals, like ravenous sharks, have already opened their mouths to swallow funds and damn the consequences. When that happens, the EFCC would come in and nothing would happen as the money is already gone. This won’t be the first time such would happen. That was how the defunct Nigeria Airways collapsed.

The now discarded plan by the Buhari administration to resurrect the dead national carrier, under any guise, was indeed ill-informed. A new national carrier, be it airline or shipping, is the last thing that Nigerians would support at a time people are expecting change in the way the country has been misgoverned in the past.

The same corruption that killed Nigeria Airways also killed the Nigerian National Shipping Line (NNSL). Both were national carriers that are now dead. Reviving the Nigeria Airways now is tantamount to re-opening a closed corruption drain pipe. Why not also revive the NNSL so as to get a full measure of national pride? Let the private people do the airline business in line with the privatisation policy of the Federal Government.

It is amazing how President Muhammadu Buhari, who had vowed to wipe out corruption, was scheming to revive a decadent corruption cesspit in the name of national pride. The dead Nigeria Airways was a metaphor of everything that was wrong with Nigeria. It represented how not to run corporate Nigeria. It should be allowed to rest in peace. There are many people-oriented programmes that should engage the attention of government and not running an airline.

The Nigerian environment, at the moment, is not aviation friendly; the operating environment is very harsh, hence, the fumbling of several airlines operating in the country. The necessary infrastructures are lacking. The three major international airports in Lagos, Abuja and Port Harcourt, have consistently been rated among the worst in the world. The facilities need to be upgraded to international substandard.

Our airports, whether international or domestic, are an eyesore. The Lagos International Airport Road alone could scare visitors and investors because of the decadence the supposedly international gateway advertises. That road is a dark alley until it is rehabilitated. The international airline operators had on many occasions bemoaned the decay that characterised Nigerian airports – offices, parking lot, arrival and departure halls, conveniences, insecurity, etc.

Some time ago, there were reports that Virgin Atlantic was pulling out of Nigeria after disengaging its entire Nigerian cabin crew. Virgin began operations in Nigeria in 2001. At a point, it flew the national flag as Virgin Nigeria, which was short lived. There is no airline in Nigeria that has good story to tell about its experience. Is President Buhari ready to stomach the sleaze that will come from this second adventure?

The corruption that led to the airlines’ bankruptcy is still rife. President Buhari should focus on how to improve the lot of suffering Nigerians and not how to leverage the pleasure of a few highly placed individuals and their families and cronies. If there is money, the President should leverage the decadent infrastructure nationwide.
It would be paradoxical, indeed ironic and contradictory, for the Buhari administration that was elected on the mantra of anti corruption to begin to exhume rotten institutions that personified corruption, with the aim of reviving them. Thank God the idea has been dropped.

The government move came following two recent reports on aviation. First was the Ahmed Joda Transition Committee report, which, among other things, advised Buhari to merge the debt-ridden Arik, Aero and others, to form a national carrier.  This was pigheaded advice that amounted to putting all our eggs in one basket, as that will mark the end of private airlines in Nigeria.

What would happen when the hybrid new national carrier fails when there would be few private airlines to fall back on? What a flawed recommendation that would plunge the new national carrier into unimaginable financial crisis from the outset.

Does one need to be a business expert to know that you don’t start a new business with debt-burden if the business is to make headway? How could Nigeria’s new national carrier take over debt-ridden private airlines and expect to break even?

The second was Capt. Addulsalami Mohammed Committee’s report that was set up to work out the modalities for the establishment of a national carrier. While the Joda Committee was set up shortly after the general election in March 2015, the Mohammed Committee was inaugurated subsequently. Both reports favoured the establishment of a national carrier.

Reports showed at the time that six of Nigeria’s leading airlines were heavily indebted to the tune of about N130 billion. This huge debt forced the airlines to turn to the Asset Management Corporation of Nigeria (AMCON) for a lifeline.

In 2012, virtually all the private airlines operating in Nigeria were at the verge of collapse until AMCON came to their rescue with a N132 billion lifeline. Ever since then, the airlines have been grappling to remain in business.

In 2014, the debt portfolio of five of the private airlines with AMCON stood at over 190 billion. This excluded sundry debts owed to the Federal Airports Authority of Nigeria (FAAN), the Nigerian Airspace Management Agencies (NAMA), suppliers and other institutions.

Worldwide, in this era of privatisation, having a national airline is no longer in vogue. In a country like Nigeria, especially, having a national airline is bad business. Since 2000, government has been implementing a privatisation programme that saw major national institutions like the power sector, Nigerian ports, airports, etc, privatised or concessioned. What is the rationale for thinking otherwise with regard to a national airline?

Around the world, most governments have hands-off the running of national airlines or at best have minority shares in private-public arrangement. For instance, all the major international airlines that fly into Nigeria such as Alitalia, Lufthansa, British Airways, Aer Lingus, among others, have been privatised. Government has only six and 18 per cent equity share in KLM and Air France respectively. It is baffling how Nigeria that is still battling with mundane issues – governance, social and economic deprivation would add another headache in the name of a national carrier.

The future of aviation and airlines, according to experts, are among the most vulnerable to global and local shocks. That means contingencies, cash reserves, hedging of major risks such as oil prices, according to IATA.

If Buhari is interested in aviation, he should focus on providing the enabling environment by way of upgrading the facilities at the airports and making them meet international standard. Private airlines should be encouraged to operate.