Domestic airlines reject Nigeria, Ethiopia partnership

Domestic airlines under the aegis of the Air Operators of Nigeria have expressed concerns over the proposed partnership between the Federal Government and Ethiopian Airlines to form a national carrier scheduled to begin operations by December.

They said the agreement was tantamount to opening the nation’s domestic market to a foreign carrier; a development they said could ‘decimate” the local airline industry and lead to capital flight.

The spokesperson for AON and Chairman of United Airlines Nigeria, Prof Obiora Okonkwo, spoke on Thursday during an online aviation town hall meeting  titled, “Nigeria Air: The Solution to Nigeria’s Aviation Problems?.”

The event was organised by aviation consultancy firm, Avaero Capital Partners.

He said, “We have not seen anything Nigerian in this Nigeria Air. It is a camouflage of interest. The decision to set up a national carrier in partnership with Ethiopian Airlines is a policy somersault. The people in government have continued to demonise the local operators. Aviation companies have collapsed in other parts of the world, not only in Nigeria. What the aviation sector needs is support. The private sector will collapse with this (national carrier) arrangement. Nigeria will be losing much. It must not be allowed to be sustained. There is nothing Nigeria in this Nigerian Air.”

This came as other aviation stakeholders including pilots, aircraft engineers and aviation business experts who spoke at the webinar rejected the proposed Nigeria Air, saying its shareholding structure was absurd and could plunge the aviation industry into further chaos.

The Managing Director of Top Brazz Aviation and former Managing Director of the Nigerian Airspace Management Agency, Roland Iyayi, said the proposed national airline would help Ethiopian Airlines to achieve its domination of the African market, adding that the Ethiopian national carrier had formed similar agreements in eight other African countries.

He said, “This approach will decimate the local market. Agreement with Ethiopian Airlines will create cabotage. Ethiopian Airlines will come into our domestic market, lower fares (non-competitive fares) with the aim of taking over the market. The choice of Ethiopian Airlines will destroy our industry. We reject this totally.”

Iyayi, who is also a pilot, further said, “In anticipation of the Single African Air Transport Market, Ethiopian Airlines want to dominate the African market. The government is meant to support local carriers. Ethiopian Airlines has partnerships in eight other countries in Africa.

“ET currently has 135 planes. The CEO of the airline has said its plan to increase their fleet to 250 planes in the next five years. The intent is to go into the domestic market of all the African countries where they have footprints. This is simply aviation colonialism. If we take all of this onboard, you will wonder whether the government has the interest of Nigerian airlines at heart or not.”

Also speaking, President, Aircraft Owners and Pilots Association of Nigeria, Mr Alex Nwuba, said with Ethiopian Airlines having 49 per cent stake in the proposed national carrier, it would be difficult for Nigerian Air to fly intercontinental routes.

Nwuba, a former managing director of Associated Airlines and a pilot, said, “We do not think this is the best thing happening. It is not genuine. We reject it. Nigeria Air will not suffer any fate different from what befell the defunct Virgin Nigeria that could not go to the United States. This is clear in the Bilateral Air Services Agreement regulations.”

The aviation expert also queried why MRS and SAHCOL, listed as private investors in the proposed national carrier, had yet to inform their shareholders via the capital market their decision to invest in Nigeria Air.

“MRS and SAHCOL have yet to put up statements at the capital market to inform shareholders that they will be putting some money in the national airline. This is unethical,” he added.

An aviation expert and aeronautical engineer, Babatunde Adeniji, also faulted the shareholding structure of the carrier, saying, “I don’t share the sentiment; the arrangement is such that you are using government funds to bring a competitor that will distort the market. We need to create a level-playing field. How can we make the industry sustainable? There is a need for transparency in the whole process of setting up a national carrier.”

The Principal Manager, Avaero Capital, Sindy Foster, also queried the transparency and shareholding structure of Nigeria Air.

She noted, “The local carriers are not being supported. Aviation fuel issues and forex access problems which affect their capacity to maintain aircraft are not addressed. Everywhere, we talk about the poor performance of Nigerian airlines but we do not support them. We need to support them to grow.’’

According to the Chief Executive Officer, West Link Airlines, Capt Ibrahim Mshelia, Nigeria has the capacity to establish its own national carrier without a foreign airline.

He said, “This proposed national carrier should be stopped. The entity called national carrier is just a game to get what is touted as a national carrier owned by individuals. We have the capacity to establish our airlines. We should not allow ET to do it. Let an Ethiopian investor do it. The deal should be cancelled. It is an insult to our sensibility. We can develop our aviation sector. Some people just want to form a private carrier under the name of a national carrier.”

On his part, Head, Research, Zenith Travels, Olumide Ohunayo, wondered why the government had yet to be transparent about the deal.

“There are vested interests in what is being touted as a national carrier. We should not skew it in favour of some interests. If we must have the national carrier at all, then we should do in a manner that will be a level-playing field.”

In his contribution at the webinar, an aviation expert, Simon Tumba, said, “How can Nigerian Air consolidate the Nigerian market, African market and then the intercontinental market with this kind of arrangement? This project has personal interest. Every Nigerian must reject it. It shows that the project itself has issues. The private sector entities that have shown interest in Nigeria Air have yet to report this at the capital market. It is unethical”

A former Acting Director-General, Nigerian Civil Aviation Authority, Benedict Adeyileka, said, “Nobody has mentioned the interest of Nigerian professionals. We have local operators that can operate. I am completely against Ethiopia Airlines as a partner, while I am in support of the establishment of a national carrier.”

Also, the Chief Executive Officer, Sabre Network, an airline global distribution network, Gabriel Olowo, said the government should simply remove ‘national’ and call its deal with Ethiopian Airlines a flag carrier.

Olowo added, “In aero-politics, how much support does the Nigerian government give our carriers to go on foreign routes? There is nothing national about the so-called national carrier. They should remove the word national carrier and call it a flag carrier, and then create a level-playing field for everyone to compete.”

Also speaking, a former Military Commandant of the Murtala Muhammed International Airport, Group Capt John Ojikutu (retd), said, “We have tried in the past to have national carriers but failed. We should simply reduce multiple designations to foreign airlines and create more markets for domestic airlines. We need just two flag carriers.”

Aviation industry analyst, Mr Wole Shadare, however insisted that there was a need to give the government a chance to promote the deal, advising the Ministry of Aviation to review its plan.

An aide to the Ministry of Aviation, Mr James Odaudu, said that the government was on course to set up the carrier, adding that one of the three leased planes would arrive in the country for demonstration flights in a couple of weeks.

According to him, the government is planning a dry lease of aircraft contrary to reports that the government is proposing a wet-lease arrangement.

Article first published on the Punch Website

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