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NIGERIAN GOVERNMENT ANNOUNCES PLANNED ESTABLISHMENT OF A NEW AIRLINE:

NIGERIAN GOVERNMENT ANNOUNCES PLANNED ESTABLISHMENT OF A NEW AIRLINE:

On the 23rd of August 1958, an airline came into being under the name West African Airways Corporation Nigeria Limited (WAAC Nigeria), also known as Nigerian Airways, to succeed the folded West African Airways Corporation (WAAC); the title “WAAC” was retained due to the prestige this company had previously earned.

Initially, the carrier was a tripartite entity in which the Nigerian government was the major shareholder (51%), and Elder Dempster Lines and BOAC held the balance of (32⅔ and 16⅓, respectively).

WAAC Nigeria inherited some aircraft previously owned by WAAC. Operations started on the 1st of October 1958, with a BOAC Stratocruiser operated on behalf of the new airline linking London with Lagos, and DC-3s flying domestic services and a run to Dakar, the last one in conjunction with Ghana Airways.

On the same day, WAAC Nigeria signed a 15-year agreement with BOAC to charter Stratocruisers and Britannias for serving long-haul flights between Nigeria and the United Kingdom. The contract also contemplated that these routes would be operated in a pool agreement, whereby tickets could be issued by one airline for flights operated by the other, with the revenues being shared.

Due to poor management, the Airline at a time was operating under deficit account. This, among other things, led the Federal Government in 2005 to liquidate same. This has been the position of Nigerian Airways till date.

However, a sigh of relief came recently when the Federal Executive Council (FEC) on 7th of February, 2018 approved Airline Management Group (AMG) to work on the establishment of a new national carrier.

The Minister of State for Aviation, Hadi Sirika, stated this when he briefed State House correspondents at the end of the weekly Federal Executive Council meeting in Abuja. Government had in May 2017 appointed Messrs Lufthansa Consortium and five other advisers to help it set up a national airline and develop its aviation infrastructure.

According to the minister in his recent briefing, “Today, Council considered a memo from transportation regarding aviation. It was a memo that was brought to substitute a member of the consortium that will provide transaction advisory services for the establishment of a National career. And that member of the consortium is Messers Lufthansa Consulting.”

The Minister went on to say that the “council considered and approved that substitution with another company called AMG (Airline Management Group) with Avia Solutions GE to join the other members of the consortium to continue providing the same services at the same cost; this is only substitution’’.

The minister explained that the council, in its wisdom, “felt that Lufthansa consulting is an appendage of the airline group and that might bring conflict of interests. Lufthansa themselves may want to join, partner or help in the process during the procurement phase of this transaction. And of course they are members of Star Alliance, members of One World and members of Sky team, others may feel shortchanged. Since we appointed the transactions advisers in various aviation projects in May 2017, about six of them, five of them have gone ahead, the one for construction of airport, the one for aeropolise and the one for MRO and so on and so forth.”

According to the minister, “most of them have produced the outline business cases and we are on our way to doing the full business case. However, Lufthansa Consulting, did not accept the offer neither have they signed any contract. They countered the offer instead. One of the conditions is that we should pay them 75 per cent of the total cost, which is against our procurement law. They also wanted us to change the contract from Naira to Euro, they also wanted us to open an Escrow account in an internationally recognized bank outside the country where the money will be domiciled etc. We couldn’t continue with them because it will compromise the system which we thought should be transparent, so that is why we sought the approval of council to substitute them why a neutral person.”

From the vivid explanations offered by the Honourable Minister of Aviation, it is clear that the aviation industry would witness an introduction of a new national carrier with the mandate to deliver best services to replace the liquidated Nigerian Airways. After all, a strong Nigerian national airline can compete globally as well. This is in line with the position of the present government that it is committed to solving the challenges of aviation infrastructural deficit in the country through targeted spending at projects that would unlock the economic potentials of the industry and the nation as a whole.

Though there have been concerns expressed by stakeholders in the sector that going by the events in recent past, this would not be the first time a Nigerian government would moot the idea of having a national airline since the defunct Nigeria Airways, however, matching policy set targets with concrete actions, would definitely convert the objectives to reality.

Notwithstanding, the government must ensure that the mistakes of the past are corrected before the flag-off of this new national carrier.

Finally, there is now a consensus amongst stakeholders that apart from engendering national pride which a national carrier evokes, a thriving national airline will enhance foreign direct investment, boost economy (being catalyst to the growth and development of other sectors), create jobs and allow the nation to partake in the lucrative African aviation sector.

 

Prince Joel Esq

gbalahan@immigrationlawyernigeria.com

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