By Chinelo Obogo, [email protected] 09051862508
The approval of the Federal Executive Council for the country’s national carrier, Nigeria Air, to lease three aircraft to enable it to commence operations has caused some controversy in the aviation sector with experts disagreeing on the best course of action.
While some experts say wet leasing planes will not provide the needed jobs, other are of the view that since it would be temporary, there is nothing wrong with it.
After the Federal Executive Council meeting which held last week, Aviation Minister, Hadi Sirika, who briefed House correspondents said: “We have said in our outline business case, which was earlier approved, that we are starting with three aircraft for the first instance and then we progress. We will have a mixture of Airbus and Boeings because every airline that will grow big uses the two.
But reacting to the development, an aviation expert, Dr. Alex Nwuba, who spoke at the 26th annual conference of the League of Airports and Aviation Correspondents held in Lagos, said even though it sounds like a good idea, there is nothing the industry would benefit from wet lease as the airline would pay for the airplanes in forex and pay for foreign crew, while insisting that it would not create any employment. He also said this is not what the country wants in a national carrier as it would decimate the existing domestic airlines.
“What’s a wet lease? Wet lease is an arrangement where the government has engaged an airline outside the country to bring airplanes and crew. So how does that solve our problem as a nation in terms of creating employment as an industry? How does that solve the problem of foreign exchange that we are already facing because we had to pay for that wet lease in foreign exchange?
‘’How does that solve the problem of availability of funds through the Central Bank or will the national carrier get its money through the black market to fund its operation? It is essentially an absurd proposal made to a group of people that have no knowledge of what’s going on and they are acting like judges receiving information on which they judge without basic facts.
“There is the need to go to the market and sell the 51 percent for the Nigerian public through the stock exchange. That would invigorate the stock exchange. It will get the stakeholders’ buy-in. The average Nigerian will be able to put a few dollars that they put in MTN share and buy into the national carrier.
“They will have access to the money to actually buy airplanes or enter into a dry lease arrangement which is essentially a finance lease and make payment over a period of time even though in the finance industry which I work in, doing a finance lease in dollars for a domestic operations earning naira makes no sense at this age of the economic cycle that we are in. Maybe we pay cash for the airplanes and bring them in, otherwise you do a lease of an airplane by N700 to a Dollar.
“By the end of the year, its 1000, you can’t make those lease payments. So, we need to take this product to the market, get the stakeholders buy-in, create new jobs within the Nigerian economy, create new solutions, bringing in wet lease airplanes from abroad to fly domestic business makes absolutely no business sense,” he said.