Nigeria’s new national airline, Nigeria Air, will require an initial takeoff capital of between $150 million and $300 million as the Federal Government seeks strategic partners to operate the carrier, according to a document sighted by an international wire service on Thursday.
READ ALSO: FG unveils Nigeria Air as new national carrier
According to the government, the strategic partners are expected to run the airline as a private sector initiative to avoid suffering the fate of defunct Nigeria Airways.
The previous national carrier, the Nigeria Airways, founded in 1958, was wholly owned and managed by the Federal Government before it went under in 2003.
Hadi Sirika, the Minister of State for Aviation, said on Wednesday that the government would not own more than five per cent of the new carrier. He made the comments while giving details of the airline at the Farnborough air show in England.
The government plans to launch the airline in December, making good on President Muhammadu Buhari’s election campaign promise.
Decades of neglect and lack of investment have left Nigeria with low-quality infrastructure seen as a hurdle to prosperity. The government has said that upgrading it would require private investment. “The initial capital is likely to be in the range of $US 150 to $300 million, in- vested in tranches over time from start up through the first five years of operation,” a government document stated.
It said the government would provide initial capital but did not state the sum or give further details.
The government will “facilitate the process for opening up the capital of the airline to private sector financial investors”, the document stated.
A private operator, sought through a Public Private Partnership (PPP) process, will manage the airline without interference, it said.
Nigeria Air would serve domestic and international markets and expect to have a fleet of 30 aircraft in five years with hubs in Lagos and Abuja, Nigeria’s two main cities.
British billionaire Richard Branson set up domestic and international carrier Virgin Nigeria in 2000, but pulled out in 2010 over what he said was interference by politicians and regulators.
The airline he created, which was later rebranded Air Nigeria, closed in 2012 after collapsing under N35 billion of debt which left it unable to pay staff, a former finance director of the company said at the time.
Nigeria is overhauling its aviation infrastructure and handing over its airports to private managers in order to improve the business environment for the industry and to attract investment, the document said. It said current air traffic in Nigeria is around 15 million passengers which is expected to grow at five percent per annum through to 2036.
