The Minister of Aviation, Senator Hadi Sirika, has opened up on the proposed Nigeria Air, accusing local airlines of rebuffing overtures when confronted initially to buy shares in the carrier.
Sirika made the disclosure while defending the choice of Ethiopian Airlines as a strategic investor to the proposed Nigeria Air which holds 49 percent equity in the national airline.
Sirika revealed that Nigerian carriers have been vociferous in their condemnation of the new project which they said would erode the market of the country’s airlines.
Minister therefore, carpeted the airlines for their actions explaining that his Ministry before now held six meetings with the carriers both openly and in his office about the need to buy shares in the new carrier that would make the shareholders in the new national airline.
He however, pointed out that his overtures to them was rebuffed, wondering what the indigenous airlines actually wanted.
Sirika disclosed this while speaking virtually at the Aviation Breakfast Meeting held recently with the theme, “Aviation in Nigeria: What Next? at the Eko Hotels and Towers.
At the event organised by Phillips Consulting Limited (PSL), Sirika also noted that the national carrier project came as a result of lots of gaps in the industry, the failure of the indigenous airlines in the past, and the one-man-show attitude of the carriers.
The Minister hinted that the creation of Nigeria Air where the government is holding five percent was deliberate, explaining that when the carrier starts, the five percent equity would be sold to the public”.
According to the Minister “I begged the airlines to own stakes in Nigeria Air but they declined. They were not interested, only for them to say things that we do not understand. The airlines under the Airline Operators of Nigeria (AON) are scared that the new airline would lower fares and not allow a level playing field”.
“Any decrease or increase in fares would have to go through the Nigerian Civil Aviation Authority (NCAA) and stakeholders. These fears are unfounded. I told them this airline would not be given preferential treatment”.
Sirika asked the operators to mention one request they needed from him that had not been granted, saying, “None of them can complain that I turned down their request. We are ever ready to support Nigerian airlines to Dubai, London, United States, and so many other places”, recalling how the government supported Air Peace when the United Arab Emirates (UAE) frustrated it out of the lucrative Dubai route.
“They just need to organize themselves to take advantage of the burgeoning Nigerian and the African aviation market which he has remained largely untapped. The Federal Government had since removed Value Added Tax (VAT) and Customs duty on aircraft and aircraft parts from aviation and has severally given intervention funds”.
The Minister equally took a swipe at Nigerian airlines that had turned aviation into a philanthropic project, offering free services rather than seeing airline operations purely from a business angle.
“There is nothing bad in helping to bring stranded Nigerians back to the country or offer humanitarian support to bring people home but it should not be done at the expense of the profit that should accrue to the airline”.
“Airlines profits are very marginal. We have seen how airlines like Kabo and Okada Air went under. Airline business is a serious business”.
The Minister admitted that the foreign exchange issue is posing a lot of challenges to the sector just like every other sector of the economy, adding that aviation is highly dollarized but hinted that FOREX matters are in the domain of the Central Bank of Nigeria (CBN).
A former Managing Director of the Federal Airports Authority of Nigeria (FAAN), Mr. George Uriesi, described the country’s aviation industry as, ‘traumatic’.
He listed some of the problems bedeviling the nation’s aviation industry as lack of investments; struggle to meet critical forex obligations, and struggle to offer sustainable and reliable services, maintaining that the problems of Nigeria’s aviation are self-inflicted.
Uriesi, who is the Chief Operating Officer (COO) of Ibom Air, stated that despite the tough operating environment noted that the operators needed creative means of accessing capital necessary to help domestic airlines invest in modern equipment so that they can grow to compete favourably and achieve the economies of scales needed to make the transition, “wannabe’, “shaky”, scheduled carriers to successful and sustainable airlines”.
He called on the Federal Government to give domestic airlines access to Forex at the rate, adding that airlines are critical enablers and engines of the economy.
A former Secretary-General of the African Civil Aviation Commission (AFCAC), Ms. Iyabo Sosina lamented that the aviation industries both in Nigeria and globally are in distress globally, advising that no one without a deep pocket should venture into aviation.
She stated that the easiest way for a billionaire to become a millionaire was to go into the aviation industry, stressing that despite the unconducive operating environment, there are still some serious players.
She however lambasted many airlines in the country she said are not properly set up with no good business plans to stand up to scrutiny and no good business model.
About the Author
Anthony Awunor, is a business correspondent who holds a Bachelor of Arts Degree in Linguistics (UNILAG). He is also an alumnus of the Nigerian College of Aviation Technology (NCAT), Zaria Kaduna State. He lives in Lagos.
