Not yet Uhuru for Nigeria Air Nigeria Air
Despite the much hyped preparation for the planned takeoff of the Nigeria Air, the airline continues to confront different forces on all fronts as stakeholders like the Airline Operators of Nigeria (AON) are determined to stop its operations using the instrumentality of the law courts.
One of the projects very dear to the heart of the Minister of Aviation, Hadi Sirika is the operation of a national carrier to be known and addressed as Nigeria Air. But the irony, however, is that the project has suffered lots of setbacks since the idea came on stream about six years ago.
Timelines of Nigeria Air takeoff
After the launch of the project in July 2018, Nigeria Air was scheduled to take off in December of that year, but it never materialised. Fast-forward to six years after the story hasn’t changed much as the backers of the Nigeria Air continue to navigate one landmine or the other.
The Minister of Aviation, Hadi Sirika, had also during a budget defense session in October 2020, told the Senate Committee on Aviation that the Aviation Road Map agenda would be executed in 2021, but this never happened.
Again, On November 23, 2021, after a FEC meeting, Sirika announced that the airline would now take off in April 2022. Again it never happened.
In March 2022, Sirika revealed that take-off date was again shifted to July 2022, this never materialised and the final date was put at December 2022 after reaching an agreement with Ethiopian airline among other investors.
The trouble this time
The Minister of Aviation, Hadi Sirika, had last week assured that the new national carrier, Nigeria Air, would begin operation before May 29.
Sirika who disclosed this to State House reporters shortly at the end of the Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari at the Presidential Villa, Abuja, said arrangements had been put in place for the smooth take-off of the airline.
The federal government had postponed the airline take-off twice over logistic and other challenges.
The minister said: “Nigeria Air Limited, I did say that we will get it going before the end of this administration and I have not withdrawn my words.
“We have everything in place, the aircraft are in place, the offices, operational centres, the staffing and everything that we need to have in place.
“We’re doing the last-minute checks and waiting for the issuance of the AOC and it will fly.
“It will fly and it will be for the benefit of this country, for the size of population, the travelling public and what it does to the economy, especially to tourism, to African integration and to the AU Agenda 2063.
“It’s a very important project and I must say it will happen before the end of our tenure in the next four weeks and two days.”
Concerted efforts by Sirika to float Nigeria Air
As part of efforts to get Nigeria Air on stream, Sirika had assured that the national carrier will begin operation with 20 petrol-aircraft.
Checks by our correspondent revealed that nine of the 20 aircrafts ordered by the federal government have been delivered, but Sirika assured that the timeframe to commence operation will not be changed. Speaker of the House of Representatives, Femi Gbajabiamila, who raised concerns regarding the national carrier, said “The issue of the national carrier is very important. It is something we are all paying attention to. We just want to make sure we get it right. There have been some misgivings. Some issues have been raised. But there are issues that need clarification.”
In response, Sirika said no stone has been left unturned in the establishment of the Nigeria Air and preparation of the operation, as both the government and aviation stakeholders are involved.
“When I came in as a minister, we didn’t arrogate to ourselves knowledge and wisdom. We believe in the stakeholders on whose behalf we are servicing. Having been made minister, I came out with a road map which in my little wisdom will help transform civil aviation in Nigeria.
“I ran it through the system within the ministry and we commissioned some consultants to conduct a market survey and see where we are as an industry at that time. We set out to concession our airports not to privatise but to concession the airports.
“We also set out to put a proper airline the size, capacity, dynamics and the population and the markets and the complexity of the nation, Nigeria and also set out a leasing company and develop the cargo terminals and so on,” Sirika explained.
The minister added, “When I came to the House of Representatives, I found out that the act that was signed by Jaja Nwachukwu in 1963 was the act that we were using charging pounds and shillings in 2003. We hurriedly, as we were departing in 2007, got the civil aviation passed in 2006 with some imperfections.
“It’s intended to do the framework and the foundation and steer it in such a way that it will be beneficial to the people and make it a private sector initiative to which the government has some interests, understanding the civil aviation in value addition, improving the GDP and jobs.
“The national carrier is in the works and we have advanced significantly just yesterday, Mr President in concluding the retreat has directed that this airline must work between now and December. And it will work by God’s grace. “We have ordered 20 brand new training aircraft that use petrol. So far nine have been delivered. All these in the national carrier efforts.”
FG pays $12.5m for 5% stake in Nigeria Air as fresh investors rally support
Meanwhile, investors have been identified, according to the minister of aviation, and the business case is being reviewed to favour Nigeria.
“We have so far from all the submissions identified the partners, and the investors and we are currently negotiating and processing the AOC.
“We are tweaking the business case in such a way it will give us an advantage and set it in the most efficient manner. So, I want to commit here by the grace of God, between now and the end of the year, the airline will work.”
The technical advisor to national carrier, Nigeria Air, Prof. Tilmann Gabriel, has revealed that the Nigerian government paid $12.5 million for its stake.
Investigation had revealed that the federal government retained a five per cent stake in Nigeria Air, but offered 49 per cent to Ethiopian Airlines and 46 per cent to Nigerian investors.
Gabriel, in an opinion piece titled; ‘Nigerian Airline Status 2022 – What is next in 2023’ stated that the five per cent is worth $12.5 million.
He said Nigeria Air has a start-up budget of $250 million and a business plan for the next ten years, “Nigeria Air has the strategic direction, with a solid business plan for the next ten years and a start-up budget of 250 million US dollars.
“The Nigerian government only invests 5% into this start-up funding (12.5 million US dollars), in line with its 5% share in Nigeria Air.”
The technical advisor also tackled the Airline Operators of Nigeria (AON) for filing a suit against Nigeria Air and other stakeholders of the national carrier.
Gabriel explained that the commencement of Nigeria Air was a competition that creates new business for the local aviation market and increases the choices of domestic airline passengers.
“Nigeria Air will be a new competitor in the Nigerian market, adding to the existing airlines. As Michael Porter taught us many years ago, the five factors of competition are for all businesses to recognise, amongst them that all competition creates new business for all, as the customer has added choices.”
But the plan of Nigeria Air to obtain the Air Operator’s Certificate (AOC) from the Nigeria Civil Aviation Authority (NCAA) suffered another setback last week as the Airline Operators of Nigeria (AON) have filed a restraining order against the aviation regulator.
In the restraining order letter dated April 19, 2023, the lawyer representing AON, Abubakar Nuhu Ahmed, warned NCAA’s Director General, Captain Nuhu Musa, of taking action that will ridicule the integrity of the agency.
AON, a group of domestic airline operators in Nigeria, filed a restraining order to prevent Nigeria Air from commencing operation.
The group is against the operation due to the partnership between Nigeria Air and Ethiopian Airlines, which AON said could result in revenue loss on the part of domestic airline operators and also the shutdown of the operation of local airlines.
The plaintiffs, AON, Azman Air Services Limited, Air peace Limited, Max Air Limited, United Nigeria Airlines, and TopBrass Aviation Limited, have warned the NCAA from relating with the minister of aviation, ministry of aviation, or their representatives on the issue, pending when the issue is determined by the court.
There have been allegations by the AON that the Federal Government had granted Ethiopian Airlines (ET) in its Commercial and Strategic Plan 15 years tax moratorium for it to partner with the government on Nigeria Air.
The plaintiffs told the DGCA that the issue was already at the Federal High Court sitting in Lagos and presided over by Hon. Justice A.L. Alagoa who granted Orders of interim and interlocutory injunctions, which restrained the parties involved from going ahead with the project.
In the restraining order, the counsel said: “You are therefore notified to desist from dealing with the Minister/the Ministry of Aviation and/ or their agents, privies or representatives, pertaining the Air Operator Certificate, subject matter of the suit, to avoid consequences of disobedience of court orders.
“As a law abiding regulatory agency, you are under the watchful eyes of the world and it is in your interest to desist from any further action on the AOC process that will ridicule the integrity of the Agency before the local media as well as the global aviation community.”
The suit was received by NCAA on April 20, 2023.
Also attached to the suit are the other court suits challenging the establishment of the airline.
The AON and other plaintiffs had on November 19, 2022, called on the court to look at the extant laws and interpret such to know if the processes following the planned rebirth of a new national carrier for the country were not in violation of the law of the Federal Republic of Nigeria.
AON had insisted that the granting of 15 years moratorium negated the level playing field for all players as craved.
Also, the government agreed to facilitate the expansion of funding or incentive programs within Nigeria to accommodate the national carrier where the airline (Ethiopian Airlines) would not be ordinarily qualified for access to such funding or incentive programs.
The government in the draft agreement with the airline, also said it would provide its support to the national carrier in accessing funding and incentive programs as may be available to support the business objectives existing prior to and after the commencement of operations to encourage the undertaking and performance of the national carrier business objectives.
The document, in its Taxation Assumption on page 43, stated that no formal analysis had been carried out on the airline’s tax position, saying that for the purpose of this document, it assumed that there were no withholding taxes on interest payments, insurance premiums, and dividends to shareholders.
Also, the Federal Government and Ministry of Aviation had sought the transfer of the case to the Federal High Court – Abuja Judicial Division from Lagos.
An affidavit in support of the motion on notice sworn to by Des-Bordes Felicia, the counsel to the defendants; Nigeria Air (1st defendant), Sen. Hadi Sirika (3rd defendant), and Attorney General of the Federation (4th defendant), argued that hearing of the suit in Lagos would add financial burden on the defendants.
Aside from the lawsuit against NCAA, the domestic airline operators have also taken legal action against the Minister of Aviation, Hadi Sirika, Ministry of Aviation and Ethiopian Airlines.
The suit against them delayed Nigeria Air from taking off in 2022. Sirika hopes the national carrier will commence before President Muhammdu Buhari leaves office.
However, the AON has continued to block the commencement of Nigeria Air, with the new restraining order threatening Sirika’s projection.
Nigeria’s bid to establish a new national carrier has once again failed because airline operators are determined to get their way in court.
Nigeria Air was slated for launch last December, a fact reiterated by President Muhammadu Buhari, saying work had reached 91 percent.
However, a suit challenging the shareholding structure by the Airline Operators of Nigeria (AON) has again forced the government to shift the take-off to the first quarter of 2023.
The latest will make it the sixth time the national project has aborted the crucial take-off.
The federal government failed in its move to stop AON from stopping the takeoff date.
However, presiding judge, Justice Lewis Allagoa, of the federal high court, reaffirmed the court’s earlier order stopping the project until the case between the airline and federal government is settled.
After careful consideration of the oral application by the federal government the court however brought forward the date for the continuation of the hearing of the matter to January 16, 2022, from the initial date of February 13, 2022.
It may be recalled that domestic airline operators had on November 16, 2022, approached the court to halt the project.
They equally declared that the 2nd Defendant (Ethiopian Airlines) was incompetent to bid for shares in the 1st Defendant and commence business accordingly.
The plaintiff prayed the court to set aside the entire bidding/selection process(es) for the “Nigeria Air” project as well as the approval, grant, or selection of the 2nd defendant by the 1st, 3rd, and 4th Defendants in the process.
The federal government had selected Ethiopian Airlines as technical partner for Nigeria Air while the airline was expected to have a controlling share of 49 percent which did not go down well with the domestic operators.
