Tag: Nigeria Air

By Chike Okolocha

The America First policy of the new Trump administration presents a unique opportunity for Nigerian aviation officials and policymakers to re-launch the troubled Nigeria Air project. Recall that Nigeria Air was reportedly set to go into operation on May 29, 2023 before it was scuttled by several challenges including its inability to acquire an Air Operator’s Licence, alleged inequitable technical partnership with Ethiopian Airlines, lack of operating aircraft as well as an unfathomable opposition from domestic airlines. Unfortunately, in spite of having sunk millions of naira and foreign currencies on the project, government officials suspended the new national carrier indefinitely.

Government should use the opportunity of the new developments in the United States of America to lift the suspension on Nigeria Air and give value to the quantum of money already spent on the national airline. How can this happen?

First let us look at what the America First policy entails. It is widely expected that the new American administration which commences on January 20, will immediately prioritise American interests over and above prevailing global perspectives and imperatives. It aims to cut down American trade deficits, facilitate energy independence, technology dominance and exports. It is even projected that, under the new policy, America will withdraw from global commitments including a certain reluctance to deploy American troops in hotspots around the world. Indeed, it looks like the era of America policing the world may be coming to an end.

In Nigeria, the response to the America First policy includes what is now emerging as the Nigeria Next agenda in her relations with America. A product of pro-American policy analysis and propaganda, the Nigeria Next agenda focuses on how Nigeria will benefit from the imminent boost in middle class incomes which the America First policy guarantees. With more ample disposable income in their pockets, Nigerians in the US who largely belong to the middle class will remit more monies home and proudly travel home more often in their national carrier for businesses, family visits and holidays. Thus the new American policy will potentially sustain Nigeria as the largest recipient of diaspora remittances in Africa.

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Undesirably, in recent times, diaspora remittances have been in decline, from US$22.3 billion in 2014-2019 to US$19.9 billion in 2020-2023. It is expected that the large passenger volume in the lucrative Nigeria-America route presently dominated by United Airlines (of America) will energise the new national carrier. Another “golden” route for Nigeria Air is the quintessential Lagos-London route which is believed to be one of the most lucrative in the world dominated by foreign airlines. The single slot operated by Air Peace to London Gatwick Airport is not only grossly inadequate, but an affront to the nation and the aviation industry.

Nigeria Next agenda also eyes the immediate benefits of easier and cheaper access to American technology proposed in the new trade regime under the America First policy. This will facilitate acquisition of aircraft by Nigeria Air which is said to already have an understanding with Boeing. It is noted that Nigeria’s capital imports from America declined from US$17.8 million in 2014-2019 to US$2.1 million in 2020-2023. The chief purpose of the America First policy in trade is to reverse this decline and upstage China, Nigeria’s principal trade partner. Fortunately, China is not a challenge to America in the market for commercial aviation aircraft. And, of course, the plethora of inept and indebted domestic carriers also stands to benefit from the new regime of less regulation and low-interest import of technological goods from America.

By facilitating increases in the import of American aircrafts (and other technological goods) into Nigeria, the America First presents a win-win scenario for Nigeria. While more American technological goods in Nigeria translate to more American capital in the country, the airline business presents a singular simplification of the inflow foreign exchange which may ease the eternal pressure on the naira.     

Because the United States suffers a trade deficit with Nigeria, we should expect the America First policy to specifically target Nigeria. We can readily douse the trade deficit irking America by simply increasing technological imports (including civil aviation aircraft). We must appreciate the fact that with the new policy, America is moving away from the antiquated principle of comparative advantage enshrined in Ricardian economics and adopting transactional options at variance with free market principles. Interestingly, the free market ideology is still very significant in Nigeria’s economic policies. In spite of this, it regrettable that Nigeria has apparently lost its comparative advantage and strength in crude oil production as it has become difficult to increase volumes and it is public knowledge that the world is gradually moving away from fossil fuels. In fact, America First policy throws up challenges which obligate Nigerian authorities to think outside the free market box.

Even more significant is the expected renewal of the African Growth and Opportunity Act (AGOA) as President Trump returns to power in 2025. Although the America First policy of the returning president is expected to extenuate free markets endorsed by AGOA, he is likely to invoke a priority trade partnership with Nigeria in view of prevailing deficits to boost exports to Nigeria. AGOA covers 7000 products. In this context, the Nigeria Next Agenda favourably views AGOA as another channel of improving Nigeria-America trade. Nigeria Air presents an excellent opportunity of promoting American technological export to Nigeria in the best spirits of the America First policy and AGOA. This is exclusive of the Partnership for Global Infrastructure and Investment (PGII) Programme in which the G-7 nations led by United States specifically aim to halt the supreme headway of China in Africa.

In conclusion, we acknowledge the adage that every challenge presents an opportunity. Although many persons and nations across the world view the incoming Trump administration with great trepidation, there is a silver lining in the America First policy which Nigerian authorities can utilise to re-launch Nigeria Air. In view of the potentials of the airline for the Nigerian people, the economy and the quantum of funds already spent on the project, this new opportunity to revisit it should be embraced with both arms.         

•Prof Okolocha is of Social Science Academy of Nigeria, Abuja.

By Chike Okolocha

 The recent ruling by Justice Ambrose Lewis-Alagoa of a Lagos High Court has finally put Nigeria Air in perfect perspective. The learned judge granted that the agreement between the federal government and Ethiopian Airlines which ceded a majority shareholding in the suspended Nigeria Air to Ethiopian Airlines was exclusionary. He duly declared it null and void and of no effect. Although the judge granted most of the reliefs sought by the plaintiffs, it is instructive that he held that they did not suffer any injury from the nullified transaction and duly dismissed the N2 billion damages they claimed as recompense.

So, who are these traducers? They are the Registered Trustees of the Airline Operators of Nigeria (AON), Azman Air Services, Air Peace, Max Air, United Nigeria Airline and Topbrass Aviation. These are the self-same entities that have held the Nigerian civil aviation sector by the jugular, keeping it from rising above utter mediocrity. In spite of all their grandstanding, air travel has recessed into infantilism since the ill-advised liquidation of Nigeria Airways, an action that marked the surrender of the Nigerian civil aviation airspace to local operators. No less a body as IATA has rebuked them for poor services and sustainability issues and, accordingly, supported the popular call for the establishment a Full-Service Carrier (FSC) in the country.

Whereas it is incontrovertible that the former Aviation Minister, Hadi Sirika, was woeful in his birthing of Nigeria Air, he confessed that no Nigerian airline showed interest in the project before he concluded the ill-fated alliance with Ethiopian Airlines. These local airlines are the main agonists who trenchantly declaim that government has no business in airline business (and, probably, all other businesses). It is unfortunate that the golden opportunity offered them through the liquidation of Nigeria Airways has been abused and wasted. If you ask them, they are mute and cannot explain why Ethiopian Airlines, a wholly government-owned business is very successful even without government subsidies. They are also lost with respect to the success of Egypt Air, Royal Air Maroc and many other government-owned airlines including the almighty Emirates, Etihad and Qatar Airlines.

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If Nigerian government truly has no business in aviation business, why did the Minister of Aviation travel to faraway Seattle in the United States to negotiate a concessional deal for the perennially defaulting Nigerian private airlines with Boeing, the mammoth American aircraft manufacturer?

Having vigorously campaigned for foreign investment, we are now told by Festus Keyamo, the Aviation Minister, that the deal with Ethiopian Airlines was unfavourable because it would have facilitated foreign domination of the aviation industry. So, what manner of foreign investment do we want in the civil aviation sector? How is the 49% equity in Nigeria Air offered to Ethiopian Airlines different from the 49% equity in Virgin Nigeria offered to Virgin Atlantic Airlines by the same federal government of Nigeria?

You may recall that government unveiled Nigeria Air with fanfare at the Farnborough Air Show in England on July 18, 2018, a bold step taken to replace Nigeria Airways which was liquidated in 2003 ostensibly because of corruption and mismanagement. Why was liquidation the preferred option of the federal government? It is public knowledge that American and European airlines that were troubled by incompetent management and malevolent market forces at the time were rescued by governments, not liquidated. Without government bailouts, it is unlikely that most airlines would have survived the devastating effects of COVID-19.

As you read these lines, Belgian authorities are deploying legal and political strategies to save the ailing Air Belgium, a private airline. By rescuing their troubled airlines, American and European governments saved thousands of jobs while we shunted employees of Nigeria Airways into unemployment, poverty and misery. It is most disquieting that the belated but welcome effort to replace Nigeria Airways is now being scuttled a few stakeholders to protect their narrow selfish interests.

Assuming that the federal government was not inclined to bailing out Nigeria Airways because it was not interested in business, why did it also refuse to prosecute the shenanigans that crippled the airline even when two panels of enquiry which convened at public expense had publicly identified them? Why do we blame mis-mangers and corrupt administrators when government chose to let them off?

The established norm of naming corrupt persons or suspects adopted by the EFCC is of no effect if the culprits are allowed to enjoy their booty in freedom. Without deterrent action against corrupt individuals, wars against corruption are invariably futile. In the midst of the current economic crunch, how are we going explain a budget provision of N85.6 billion between 2019 and 2023 for a failed airline? What about the preliminary costs of US$8.8 million and the projected take-off costs of US$300 million? Hopefully, these monies have not all been frittered and may still be available for the new airline.

Rather than throw away the baby with the dirty bathwater as was the case with Nigeria Airways, we should not allow Nigeria Air to die. Even the blind can see that all our indigenous airline operators can never meet demands for local and international air travel. IATA has already determined that in the period 2019-2035, air passenger growth in Nigeria will surpass that in the rest of Africa. Nigeria Air is an insightful and timely intervention to cope with this foreseen trend. Further, it is a well-known fact that we are cheated in the matter of bilateral air services agreement (BASA) between Nigeria and other countries. Only a government-backed FSC can hope to hold up a candle in this area.

Even more disconcerting is the idea being peddled by local airline operators that the “Nigerian factor” will not allow a Nigerian government-backed airline to fly. The “Nigerian factor” epitomises abject self-abnegation which sustains Nigeria’s wholesale dependence on Euro-American and Asian economies. It strangulates confidence and consigns us to our proverbial and historical subservience in the comity of nations. It also rationalises chicanery and incompetence in governance.

How do you justify the idea that the government of the “giant of Africa” cannot find a few competent and altruistic persons to run an airline?  Nigerians and all others promoting this negative worldview are allowing their narrow self-absorption to override our national interest. If Ethiopians can find an Ethiopian, Mesfin Tasew Bekele, to run a profitable, world class Ethiopian Airlines from Addis Ababa, we can undoubtedly find a similar Nigerian to run Nigeria Air from Abuja!

While the sleeping African giant has been on the drawing board to establish an airline since 2018, it took the tiny Kingdom of Eswatini only two years to put the government-owned airline, Eswatini Air, into service and the airline has been running profitably since 2023. It is also curious that while the naysayers are claiming that the federal government cannot and should not run an airline, Akwa Ibom State is successfully operating its own airline, Ibom Air.

Those opposed to Nigeria Air on whatever grounds are willy-nilly in alliance with international hegemons currently in control of the status quo. To them, a viable Nigeria Air poses a potential threat to the lucrative Nigerian routes and should therefore not be allowed to fly. A similar argument has been made in the surprising doubletalk on Dangote Refinery. It is in the interest of Nigeria, her people and her economy to immediately reactivate Nigeria Air and put it into service.

•Prof Okolocha is president, Social Science Academy of Nigeria (SSAN)

• By Chike Okolocha

Gradually, Nigeria Air, the country’s brand-new national carrier, is receding into oblivion. This is our usual practice: at the outset, there is a lot of noise on any contentious issue in the press, especially social media. In response, those who should say or do something about the subject matter keep mute and soon everything is forgotten.

Recall that in December 2018, our new airline was unveiled at the Farnborough Air Show in the United Kingdom in a colourful display with attractive finery and a characteristic grandstand by government officials. In line with the country’s new policy of private-sector led growth, we were told that government will only retain about 4% of the ownership of the company. After a prolonged search for foreign investors, government announced that it had offered 49% of the company’s shareholding to Ethiopian Airlines, as the technical partner. Ethiopian Airlines is Africa’s largest and most successful airline. However, from public reaction, it was obvious that some Nigerians felt hard done by this deal. Nevertheless, government soldiered on, promising that the new national carrier will go into operation on 29 May, 2023, the very first day of the new administration of President Bola Tinubu. Naysayers were confounded when a Boeing 737-800 aircraft in Nigeria Air’s livery landed in Abuja airport on 26 May, 2023, ostensibly in preparation for action three days later.

But hell was let loose as both government and Ethiopian Airlines were accused of deceit, fraud and conspiracy. Stakeholders in the aviation sector specifically pointed out that the new airline was yet to be issued an Air Operator’s Certificate (AOC). In the midst of an extremely hostile reception, Ethiopian Airlines scampered out of the country with the aircraft it brought to begin operations by Nigeria Air.

The bitter reception of Ethiopian Airlines betrays Nigeria’s call for foreign investment and our averseness to the rule of law. If the agreement with the foreign operator was deemed irregular or unfavourable, there is an acceptable way of seeking redress. And, if the new airline did not have an AOC, we should have used the legal process to delay the start of operations. But Nigerians embarked on cheap media blackmail and those that actually took the matter to court were not patient to allow the legal system take its course. There was no such bedlam when Nigeria sealed a similar deal with a British in the short-lived Virgin Nigeria airline. Therefore, you can hardly blame Ethiopians if they now believe that they were harried out of Nigeria because they are Africans. I am sure Ethiopian Airlines will eventually seek and obtain legal redress.

For those who think that the private sector is the panacea, we should remind ourselves that, without exception, Nigeria’s numerous private airlines have proved to be grossly incompetent and incapacious. They have perished in their dozens and, right now, there is no hope of reprieve as there is nothing to write home about most of those still flying. It is difficult to rationalise the motive of those who literarily chased Ethiopian Airlines out of the country, for retaining the status quo is absolutely unthinkable. Right now, we are all elated by the successful entry of Air Peace into the lucrative Nigeria-UK route. But Arik Air was once proudly there with brand new wide-body aircraft. So also was the semi-private Virgin Nigeria and Jimoh Ibrahim’s Air Nigeria. They all failed and disappeared. While we all look forward to the sustenance of the success story of Air Peace, the truth is that it lacks the capacity to cater for Nigeria’s huge travelling population, probably the biggest in Africa.

Moreover, we should inform ourselves that Ethiopian Airlines is 100% owned by the Ethiopian government and it has continued to operate profitably since April 1946, outperforming many private airlines. Similarly, Royal Air Maroc is a successful airline wholly owned by the government of Morocco, just as Egyptair is owned by the Egyptian state. The reader is invited to note that the prosperous Emirates, Qatar and Ethihad airlines were all established by governments which still own them. So, why is that some Nigerians think that government airlines are doomed? What is there among Nigerians that make us incompetent, corrupt, inefficient, ineffective and incapable of operating an airline? There is urgent need to do some soul-searching instead of deceiving ourselves that the private sector is our only salvation. The private sector is populated by Nigerians who attended the same schools as those in the public sector. Nigerians who ran down public sector companies have done as much harm as those who ran down private sector companies. Can you say that Nigeria is better off now that the president and virtually all state governors are products of the private sector? Have they really done better than First Republic leaders who were mostly teachers? Let us admit it: we are all Nigerians and we are afflicted by a malevolent contagion known as the “Nigerian factor”, an offshoot of market forces which has extinguished public good. Is it not ironical that Nigeria’s wealth and institutional power are domiciled in the public sector, yet we expect the private sector to save the country?

We are always wont to cite the United States where the private sector is alleged to control the economy. But the truth is that America is dominated by what Wright Mills, a sociologist, termed the “power elite”, which is comprised by a small coterie of top business leaders, top military brass, intellectuals and political office holders including bureaucrats as well as major landowners and company owners. This pot-pourri of powerful people can hardly be classified as the private sector and, often times, they unite to salvage American companies to protect the country from unemployment which usually ensues from company failures. America has a very long history of salvaging failing private companies with public money. In the airline industry, the most recent example was in 2020 when a whopping US$25 billion was doled out to airlines. Even the monumental Silicon Valley was kick-started with public funds. Indeed, Americans hardly emphasise any dichotomy between the public and private sectors as the latter almost invariably depends on the former.

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Whereas the American government intervened to save the country’s ailing airlines, the Nigerian government liquidated its famous Nigeria Airways, once described as the fastest growing airline in Africa. In 1999, the Jonah Jang Panel set up by government indicted 12 past chief executives of Nigeria Airways while in 2002, the Justice Obiora Nwazota Panel found 20 former staff of the airline guilty of the selfsame gross mismanagement and corruption. Justice Nwazota also discovered that N6 billion had been stolen from the company and N25billion could not be accounted for while unpaid salaries had increased to N70billion. Rather than recover the monies and prosecute the indicted staff as recommended by the panels, government liquidated the airline with numerous aircraft in custody of creditors around the world. Thousands of jobs were lost and a new boon era was opened up for foreign airlines. It is a most confounding irony that we blame the fall of Nigeria Airways on corruption and mismanagement while those corrupt individuals who mismanaged the company and stole its monies are set free.

Corruption and government meddlesomeness are also blamed for the collapse of the Nigerian National Shipping Line, the Nigerian National Supply Company as well as paper mills in Iwopin (Ogun State), Oku Iboku (Akwa Ibom State) and Jebba (Kwara State) and the Nigerian National Shrimps Company, Sapele (Delta State). The same story is told of the once vibrant automotive assembly plants in Lagos, Kaduna, Kano, Bauchi, Enugu and Ibadan and the monumental steel companies in Ajaokuta, Ovwian-Aladja, Katsina, Osogbo and Jos as well as the Machine Tools company in Osogbo. The list is almost endless. These companies did not collapse by themselves. Nigerians ran them aground. Rather than being in prison for their sacrilege, the undertakers of these companies are prancing about in political space blaming government involution. Such red-herring justifies government inability and unwillingness to come to the rescue of these companies, just as we continue to wallow in our blind faith in the private sector which has been curiously shielded from government petrochemical companies in Kaduna, Warri and Port Harcourt.  

Unwittingly, we now have a folklore which blames every failure in Nigeria on corruption. But this alibi cannot be sustained because corruption is not an autonomous social fact. It does not exist on its own. If, as the philosopher says, nothing happens without a sufficient preceding cause, then it is very arguable that corruption in Nigeria subsists because the authorities allow it. There are appropriate laws and regulations which should prevent corruption but cannot do so because they are not enforced or implemented. Nigeria Airways and all other public companies may have survived if those who betrayed them were brought to book. Rather than blame corruption, the new national carrier should immediately be rescued from those responsible for its imminent failure. If we take advantage of democracy and insist on the rule of law, the impunity and blinkerdness of those holding back Nigeria Air would be a thing of the past. Government can no longer plead the alibi of corruption for our failures while those indicted, suspected and accused of it are free to enjoy their ill-gotten wealth. To shore up the can-do of Nigerians and upstage the “Nigerian factor”, the new national carrier should not be allowed to fail. Those presently in power may delay it but, sooner than later, somebody will take due credit for actualising the dream.                   

•Professor Chike Okolocha writes from the University of Benin.