By Chinelo Obogo
Four years after the immediate past Minister of Aviation, Hadi Sirika, unveiled the name and logo of the proposed national carrier at the Farnborough International Airshow, London, Nigeria Air, was eventually unveiled last week to much controversy, outrage and ridicule.
In disobedience of a Federal High Court ruling which ordered the Federal Government to stay action on the setting up of Nigeria Air, a Boeing 737 800 Max with “Nigeria Air” inscribed on it, registration number, ET-APL, Mode S Q4005C and serial number 40965/4075, flew into the Nnamdi Azikiwe Airport, Abuja on May 26, and was received with much flourish by Sirika and his team.
This launch was supposed to herald the much touted national carrier which has gulped billions in over seven years and the entire country’s media were present to witness the historic event. Hardly had the aircraft touched the runway when the registration number showed that it belonged to a foreign airline. It later emerged that the aircraft belongs to Ethiopian Airlines (ET) but was previously operated by Malawian Airlines, one of ET’s other subsidiaries. Apparently, Sirika had contacted ET and asked them to provide an aircraft which would be presented as Nigeria Air in order to beat the deadline he gave. The aircraft itself which became part of Malawi Airlines on 16th February 2014 was released to ET on August 12, 2015. It is about 11 years old and carried out its first flight with the ET logo on June 22, 2012. When the aircraft landed at the Abuja airport on Friday, May 26, 2023, it was greeted with a water salute, an action which is usually used to mark the first flight of an aircraft to an airport.
By Saturday evening, flight radar24 showed the aircraft had left Abuja airport and was enroute Addis Ababa from Central African Republic. On Sunday morning, the flight tracker showed the plane had landed at Ethiopia and on Wednesday, May 31, the aircraft was fully back with ET and had commenced its usual Addis Ababa –Mogadishu route.
The outrage that greeted this discovery was swift. A former Managing Director of the Nigerian Airspace Management Agency, Roland Iyayi, described it as a monumental fraud. “I think it is a monumental fraud to assume that by conniving with Ethiopian Airlines, having an aircraft that was on commercial flight for ET on May 21 or maybe a week ago, flying into Tel Aviv on an ET405 flight to fly into Abuja only for static display and then taken out, would mean to birth an airline. I can tell you that the deck house of Nigeria Air stuck on it has been removed and rebranded for ET to be put back in service. So, all that we saw a few days ago was a charade by the outgoing Minister of Aviation, possibly to sort of block out, considering the fact that in the last seven to eight years, we have had about N85.42bn in allocation to Nigeria Air, which is supposedly a private enterprise,” he said.
Where it went wrong
When Sirika came on board as minister seven years ago, one of the projects he promised to deliver is a national carrier which would be the envy of the African continent. To achieve this, he said the government would be seeking foreign investors to enter into a private partnership with the Federal Government. Industry stakeholders were optimistic about his ambitious plans while domestic airlines were cautious.
At a media event held on September 24, 2022, in Abuja, Sirika informed the public that after searching for investors, the Federal Government had selected 76-year-old ET Consortium as the preferred bidder for Nigeria Air. He told the gathering that ET scored 89 percent as regards the technical bid and 15 out of 20 in respect of the financial bid. The minister said the Request for Proposal (RFP) under the Public Private Partnership (Act), governed by Infrastructure Concession Regulatory Commission (ICRC) regarding Nigeria Air was not yet completed.
Saturday Sun gathered that former President Muhammadu Buhari gave the approval for the deal to be finalised after he was said to have been convinced by Sirika that the Federal Government would not be making any monetary investments. But there was strong pushback from industry stakeholders when Sirika announced some of the modalities for the deal: Carrier would be driven by the private sector and the Nigerian government would retain only 5 per cent stake in it, while ET will have a 49 per cent stake and 46 per cent of the airline would be owned by Nigerian investors (MRS and SACHOL). The government also said it would raise $250 million from the private sector and that 20 aircraft with petrol engines had been ordered for training purposes, nine of which had been delivered.
Reports show that at least N85.42 billion was budgeted for the national carrier project in seven years. The Federal Government had in 2019 budgeted N47 billion and between 2020 and 2022 an additional N14.6 billion was budgeted, while yet another N24 billion was captured in the 2023 budget for the carrier but with nothing to show for it.
Pushback
After it was revealed that ET will have 49 per cent stake, making it the largest shareholder, industry experts pushed back strongly, expressing their discontent with the model, saying that having a competitor as a major shareholder in the country’s national carrier would completely annihilate Nigerian airlines from the onset. They also argued that the partnership would only help ET achieve its target to dominate the African market as it had formed similar agreements in eight other African countries. Experts say the deal will create cabotage and destroy the industry, citing the case of Virgin Nigeria which had a similar model that eventually fizzled out.
The Airline Operators of Nigeria (AON) were the first to take a definitive action against Sirika, as eight domestic airlines dragged the Federal Government to court late last year, listing Nigerian Air, Ethiopian Airlines, Sirika, and Attorney-General of the Federation, Abubakar Malami, as defendants.
Among other prayers, the airlines asked the court to stop the national carrier deal and withdraw the Air Transport Licence already issued to Nigeria Air by the Nigerian Civil Aviation Authority (NCAA). AON also claimed that the firm which served as Transaction Adviser for the transaction, was incorporated in March last year and alleged that the company was linked to the aviation minister. On November 12, last year, the Federal High Court sitting in Lagos granted an order of interim injunction restraining the Federal Government from executing the proposed draft agreement establishing a national carrier between ET and Nigeria.
Justice A. Lewis-Allagoa who granted the order, ruled that an Order of Maintenance of Status Quo by all the parties in the suit from taking any further step(s) in relation to the subject matter of the suit pending when the determination of the Motion on Notice is granted. Sirika pushed back on the AON, insisting that nothing would stop the carrier from taking off before May 29. He lashed out at the domestic airlines, saying that he had approached them and asked them to invest in the project but that none of them obliged.
Unanswered questions
Industry stakeholders have privately wondered to Saturday Sun why Sirika was hell bent on unveiling a carrier and what personal interest he had in the project that he was ready to disobey court orders, which could cost the industry much reputational damage internationally. How much is ET bringing in? Why has the intricate details of the agreement not been made public? Other contentious issues, which experts say are unethical, is the opacity and lack of transparency in the deal. Questions have been raised as to why MRS and SAHCOL, listed as private investors, are yet to inform their shareholders via the capital market of their decision to invest in Nigeria Air. By law, the unveiling of the aircraft and the inaugural flight which took place on May 26 can be rightly said to be illegal as the carrier has not been issued with an Air Operators Certificate (AOC) by the NCAA, which is the authorised regulator. At the moment Nigeria Air is at stage one of the AOC procedure.
Granting an AOC to Nigeria Air without going through the five step legal procedure will be considered an infraction by the International Civil Aviation Organisation (ICAO). Not only would the NCAA be penalized, Nigeria could be blacklisted by aviation safety agencies like the US FAA and the EASA (European Aviation Safety Agency). The spokesperson of AON and Chief Executive Officer of United Nigeria Airlines, Dr. Obiora Okonkwo, said what happened on May 26 was a show of shame and a scam, insisting that Nigeria Air is dead on arrival.
“It is a joke taken too far because there is nothing Nigerian in Nigeria Air. We are in court and we have documents about this charade called Nigeria Air which would make anyone ashamed. They have talked about millions of dollars that would be raised. If it is an equity of ET, the money would have been deposited in the Central Bank of Nigeria. So who paid the money? We have other partners in the business like MRS and these guys don’t know what is happening in the business, they are not interested. So something is happening somewhere. Besides, if after eight years of talking about Nigeria Air and all that we saw was an old Ethiopian airline aircraft, it is so absurd.
“The aircraft was decorated to confuse Nigerians. It is mandatory in ICAO law for any aircraft to be registered as a Nigerian aircraft, it must have 5N which is a Nigerian registration number and it can only be done if you bought it outright or you have a dry lease on it and not a wet lease. But none of this is the case because our investigations showed that none of the documents of this aircraft is in NCAA. It just took off in Ethiopia and landed in Abuja. For you to do this kind of show of shame, you have to have gotten to stage five of your AOC. The first stage is that you have to express your interest to get an AOC and the second stage is that the NCAA will review your application, evaluate it and if it is okay, you go and submit your manuals. The fifth and the final stage is the flight demonstration and operation. The AOC process of the so called Nigeria Air is still in stage one, the reason being that Sirika and his co-travellers didn’t want to go through the process.
“Part of our concern is that if the NCAA had not resisted and Sirika had succeeded, the international bodies would have questioned the credibility of our AOC. Ethiopian airline said they have 49 per cent stake in Nigeria and if we have to sell our airspace to anyone, it should sell for about $300 billion because of our population. Nigerian travellers constitute about 40 per cent of Ethiopian Airlines passengers worldwide, so as at today, we have not been told how much they invested.
“Another thing we found out from their business plan is that ET might be coming to kill the operators in Nigeria because Nigerians need only one airline. This document is in court. It is not our document, it is what they presented to the government and they were specific that they would use predatory price in the first six months of their operation. Predatory price means that for instance, if we are charging N50, 000 to Abuja, they would start with N15, 000. You know why they can do that? It is because Sirika had granted them 15 years tax break and they had indemnified all the loans they would take anywhere in the world.
“Thank God that NCAA refused to be cajoled and for that reason, some of the actors who stood their ground were removed from NCAA. The NCAA DG survived removal because there is a provision in the new civil aviation act that before the DG is removed, you must get the consent of the Senate, otherwise , many people have paid the price for standing their grounds. ICAO is coming to audit NCAA and if anything untoward is found, it would affect the entire industry,” Okonkwo said.
But Sirika defended the choice of ET, saying that he had held six meetings with Nigerian airlines on the need to buy shares in the new carrier but that his overtures were rebuffed. At the Aviation Breakfast Meeting with the theme, “Aviation in Nigeria: What Next?” he said: “I begged the airlines to own stakes in Nigeria Air but they declined. They were not interested, only for them to say things that we do not understand. The AON are scared that the new airline would lower fares. Any decrease or increase in fares would have to go through the NCAA and stakeholders. These fears are unfounded. I told them this airline would not be given preferential treatment. None of them can complain that I turned down their request. We are ever ready to support Nigerian airlines to Dubai, etc.”
More pushback
National president of Aircraft and Pilot Association of Nigeria, Alex Nwuba, said the launch is a fallout of a last minute push of the minister to bring about the dream he has had that he went against all modes of common sense
“Due to the darkness by which this process came about, it has led to a lot of conjecture. People don’t even understand how a government that serves its people will float a carrier and when it comes, we are all confused. Is it Nigeria Air or is it Ethiopia Airlines? It has the painting of Nigeria Air on it but it has the registration number of Ethiopia. This is just a fallout of a last minute push of the minister to bring about the dream he has had that he went against all modes of common sense. He would have said, “It is too late now as we have been doing this for seven years and what we couldn’t do in seven years, we can’t suddenly push it through the system in 24 hours and then still have something that we can be proud of. Nigeria wants a national carrier and an expanded air space. The question often asked is why we need many airlines but we don’t remember that the nature of domestic aviation in the future is not just about Nigeria. There is a Single Air Traffic Market and Nigeria must be prepared for that market space.
“Sirika said that he invited carriers from around the world to partner with Nigeria on the launch of a national carrier and then he came back and said that only one airline signified interest. How can that be? Suddenly we heard that the only airline that was interested was ET. They chose to come in and become the biggest shareholder in a non-competitive process which forestalls Nigeria’s possibility to be a leading aviation economy and it doesn’t solve the challenge of capital flight.
“We have been telling Sirika that his plan will not work. The entire domestic airlines took the Federal Government to court and the court stopped the process, yet, we saw an aircraft flying in defiance of the court order. What signal are we giving international aviation? We are decimating the industry because what Ethiopian is doing is to kill the domestic airlines. The minister said he scored 100 percent in all of his projects and the industry scored him zero except in the aspect of appointing good heads of agencies but he didn’t let them do their jobs. He didn’t let give them the independent structure to do their jobs very well even though they tried their best. Nigerian Air has a great CEO that can put together a great airline in the form Nigeria would want to have. But have you ever heard a word from him? Do you know who he is? Sirika wanted to bulldoze his way to get what he wanted simply because it satisfies his ego. The court says he should not proceed with it but Sirika went ahead with impunity and we saw the result.
“I am in many aviation organisations and forums and I can barely find anyone in support of the Nigeria Air though there are those around him who say yes to everything he does simply because they are benefiting from it. One cannot really say what encouraged the minister to go ahead in conflict with the entire industry. He can argue that the domestic airlines are doing this because they want to protect themselves but that is the right thing to do. Sirika failed to step up and support domestic airlines especially after COVID-19. The fact is that he went against common sense. We wanted someone who is an aviator at the ministerial level but the entire industry was shocked that the man we thought would be our saviour became the one that would lead us into a ditch. We want to have a national carrier to expand our reach to be competitive under the single air traffic market.
“The court ordered the government to stop action on Nigeria Air until we can determine whether what is being done is in the interest of Nigeria, and Sirika defied the order by throwing in our face, a new national carrier, a flagrant abuse of court process. No one knows the agreement reached with Ethiopian airlines and we don’t know if this is a situation where if stopped, Nigeria would have to pay penalties for default because no one knows the content of the contract signed,” Nwuba said.