By Chinelo Obogo [email protected] 09051862508
Three years after the Federal Government announced plans to establish a new national carrier following the liquidation of Nigerian Airways in 2003, Minister of Aviation, Hadi Sirika, promised that the proposed carrier, Nigeria Air, will begin operations by the second quarter of 2022.
He told State House correspondents at the end of a virtual Federal Executive Council meeting earlier in the year that the Federal Government would own not more than five per cent equity stake in the airline expected to generate 70,000 jobs when operational.
Sirika said Nigerian investors will own 46 per cent shares while international strategic partners will own 49 per cent stake as the outline business case has been approved by the Counci.
Just this Monday, the interim management of Nigeria Air received its Air Traffic License (ATL) from the Director General of the Nigerian Civil Aviation Authority (NCCA), Capt. Musa Nuhu, in Abuja, a prerequisite to getting an Air Operators Certificate (AOC).
However, experts have urged the government to ensure that the identity of the would be investors in the airline are not shrouded in secrecy and the process of selecting partners must be transparent.
For their part, domestic airlines also warn that the national carrier must not be given undue advantage over other airlines.
Nigeria Air to commence Q3, 2022
Since the inception of the Nigeria Air project, there have been divergent opinions on its feasibility. While some stakeholders say one or two existing domestic carriers should be upgraded into a flag carrier which would exclude government participation in it, supporters of Nigeria Air insist a national carrier would restore national pride and give more Nigerians access to other parts of the world.
Those who favour a national carrier say it would create the much needed jobs in the sector, help the country negotiate better Bilateral Air Service Agreement (BASA) with other countries and compete in open air skies arrangement. They argued that a national carrier is very critical for the growth of Nigeria’s aviation industry
Requests for Proposal (RFP) for the shareholder consortium was published in national dailies in March, 2022 as required by law and the project leader, Tianaero Nigeria, said certification approval for equity partners was expected in June 2022 when the bidder selection is expected to be finalised. The finalisation of the Air Operator’s Certificate (AOC) is also expected in June.
But unlike the defunct Nigeria Airways which was a government-run and owned airline, in the RFP, which was published in March, it disclosed that the 49 percent equity would be held by a private sector consortium including an international airline. It also explained that the 46 percent shareholders would be strictly Nigerian investors, which means that in total, Nigerian shareholding will comprise at least 51 per cent of the shares (including the 5 per cent Federal Government of Nigeria share), as required by the law.
Sirika, had at different fora, said an interim board of nine members would take over the running of the airline between now and July when the investors are expected to take over. He also said the airline would be based in Lagos and Abuja and other parts of the country if needed.
According to reports, the type of aircraft that would be deployed has been identified and the first batch of aircraft which would be used to commence operations are currently being sourced in Europe and discussions are ongoing on with Original Equipment Manufacturers.
Nigeria Air receives ATL
Director General of the NCAA, Capt. Nuhu, last Monday, presented an Air Transport License (ATL) to the interim management of Nigeria Air, represented by the Acting Managing Director of Nigeria Air, Dapo Olumide.
At the presentation, Nuhu said the goal of NCAA is to promote the growth of the industry as it was important to have strong airlines in Nigeria in view of the Single African Transport Market and the Africa Continental Free Trade Area which can make significant contribution to the growth of Nigerian economy.
He said participating in Single Africa Air Transport Market as a nation would increase Gross Domestic Products (GDPs).
Olumide thanked the NCAA DG for the ATL to Nigeria Air, assuring his team would double efforts to fulfil all necessary processes to receive the airline’s AOC to enable them commence operations.
“We already have aircraft supplier identified because, which is one of the requirements for the NCAA. We are waiting for the terms of agreement with Provider of Original Equipment Manufacturer. What we need now is to go through stages to get AOC certificate from NCAA. There is no magic in the process. It is not something that can be issued because they like your face. When you have an AOC and ATL, you can commence commercial scheduled operations. The date to start operation is largely based on the process one is following to get the AOC certificate,” he said.
Experts express caution
Martins Agoziem, a lawyer who spoke to Daily Sun on the issue, said that before a corporate entity is registered by the Corporate Affairs Commission (CAC), among other requirements, a Memorandum of Association which requires the names of initial subscribers, directors and shareholders has to be submitted.
“At this stage, I believe that the airline would have been incorporated before it is given an ATL and this means that it must have submitted its MoA to the CAC where it would clearly state the names of the partners. Sometimes the CAC website can be difficult to navigate but if you want to search for a company that has been registered, the easiest way to do it is to visit the CAC’s website and click on “Public Search”. Insert the RC number or the full name of the company you wish to search for in the search box and click on “Search”. If the company is registered, the result will display the full company name, RC number and office address,” he said.
As at yesterday June 9, 2022, when a public search in the website of the CAC to ascertain if the airline has been registered in Nigeria, there was no evidence to show ‘Nigeria Air’ in the public search bar, though it is not certain if the commission regularly updates its site to reflect new changes.
Meanwhile, aviation experts have warned that the entire process of setting up a national carrier must be transparent and the investors must be visible and not shrouded in secrecy.
Speaking to security expert, John Ojikutu, he said: “I have commented on this severally and I don’t like sounding like a broken record. Everyone wants a national carrier but not a government carrier. What the minister told us many times is that there would be foreign technical partners/investors with 40 per cent shares but we are now hearing 49 per cent, where are they with 40 or 49 percent? He also said there would be credible Nigerian investors with 30 percent shares, again, where are these? What we have been hearing about the national carrier has been from the FG with just four percent through the minister. Why should a shareholder with the least shares be vocal and more visible than those who are supposed to have larger shares than the government except we are planning for a government carrier not a national carrier.”
The Chief Operating Officer of Tropical Arctic Logistics (TAL) helicopters, Femi Adeniji, told Daily Sun that getting an ATL is just scratching the surface and does not necessarily guarantee anything as you cannot commence full operations with it. “The ATL is just one of the documents that enables you get the AOC. You cannot commence full operations with it. To get an AOC, some of the documents you need to submit are Certificate of Incorporation, duly completed ATL, Memorandum and Article of Association, Certificates for Directors, Current Tax Clearance, Evidence of Solvency, Business Plan, Payment of Specified fee, Bank Letter to the DG, Newspaper Publication, DSS clearance and so many more.
“I don’t understand if there is transparency as the minister claims in this process. If the Federal Government has five percent of Nigeria Air, who owns the remaining 95 per cent? We need to know who they are. Form CAC 07 and 02 will show the names of the directors involved in the airline. The tax clearance and the NCAA form for ATL application should specify the names of the directors. They need to have DSS clearance and so many other requirements,” he said.
Local airlines warn against marginalisation
At the Aviation Round Table (ART) meeting held in March in Lagos, the Airline Operators of Nigeria (AON) said even though a national carrier is an obsolete idea worldwide, it is not opposed to its establishment.
The Vice Chairman of AON, Allen Onyema, who represented the organisation at the meeting said the body has witnessed ‘deliberate demonisation’ of Nigerian indigenous airlines in order to win both public and government approval for its establishment and local airlines who operate under deliberately skewed severe harsh operating environment have all been portrayed as weak as a result.
The body said the process for the establishment of a carrier has not been very transparent and there has been no prospectus issued for public scrutiny or investment appraisal.
“The so-called national carrier is a private airline being promoted as a national entity using tax payers and government resources. There is no way an enterprise where the Federal Government is said to hold 5 percent equity can be called a National Carrier. AON opposes vehemently any decision or action that is tantamount to selling the country’s commonwealth to any foreign airline for free or for peanuts. Both the domestic and international airline operations network and market value when fully utilised are worth over $400billion every five years. Therefore, any foreign airline interested in investing up to 49 per cent into the national carrier, which would eventually give the said foreign carrier unlimited access to rights to operate both within and outside Nigeria, should be made to pay nothing less than $200billion in cash to be deposited through the CBN.
“The foreign airline’s investment in the national carrier must be through the injection of cash first before any other way. Anything short of the above is like selling off the country’s wealth to another country. Bringing a foreign airline to come and dump their redundant excess capacity (aircrafts) on our nation in the name of investing 49 per cent in the proposed carrier will do more harm than good to the nation’s economy. This is a road Nigeria has travelled before with so much regrets and shame through the adventure of Virgin Nigeria. History is about to repeat itself,” AON said.