A new national carrier, a new drainpipe
AGAINST the backdrop of the massive
corruption and ineptitude that collapsed
the defunct Nigeria Airways, the plan by
the Buhari administration to resurrect
the dead national carrier, under any
guise, is a step in the wrong direction. A
new national carrier, be it airline or
shipping, is the last thing that Nigerians
would support at a time people are
expecting change in the way the country
has been misgoverned in the past.
The same corruption that killed Nigeria
Airways also killed the Nigerian National
Shipping Line (NNSL). Both were
national carriers that are now dead.
Reviving the Nigeria Airways now is
tantamount to re-opening a closed
corruption drain pipe. Why not also
revive the NNSL so as to get a full
measure of national pride? Let the
private people do the airline business in
line with the privatization policy of the
Federal Government.
It is amazing how President
Muhammadu Buhari, who has vowed to
wipe out corruption, is scheming to
revive a decadent corruption cesspit in
the name of national pride. The dead
Nigeria Airways was a metaphor of
everything that was wrong with Nigeria.
It represented how not to run corporate
Nigeria. It should be allowed to rest in
peace. There are many people-oriented
issues that should engage the attention of
government and not running an airline.
The Nigerian environment, at the
moment, is not aviation friendly; the
operating environment is very harsh,
hence, the fumbling of several airlines
operating in the country. The necessary
infrastructures are lacking. The three
major international airports at Lagos,
Abuja and Port Harcourt, have
consistently been rated among the worst
in the world. The facilities at the airports
are substandard.
Our airports, whether international or
domestic, are an eyesore. The Lagos
International Airport Road alone could
scare visitors and investors because of
the decadence the supposedly
international gateway advertises. That
road is a dark alley. The international
airline operators have on many
occasions bemoaned the decay that
characterises Nigerian airport facilities –
offices, parking lot, arrival and
departure halls, conveniences,
insecurity, etc.
Over the weekend, there were reports
that Virgin Atlantic was pulling out of
Nigeria after disengaging its entire
Nigerian cabin crew. Virgin began
operations in Nigeria in 2001. At a point,
it flew the national flag as Virgin
Nigeria, which was short lived. There is
no airline in Nigeria that has good story
to tell about its experience. Is President
Buhari ready to stomach the sleaze that
will result from this second adventure?
The corruption that led to the airlines’
bankruptcy is still rife. President Buhari
should focus on how to improve the lot
of suffering Nigerians and not how to
how to leverage the pleasure of a few
highly placed individuals and their
families and cronies. If there is money,
the President should begin to pay the
N5000 monthly subsidy allowance he
and his party, the All Progressives
Congress (APC), promised Nigerians,
which is now being demanded.
It would be paradoxical, indeed ironic
and contradictory, for the Buhari
administration that was elected on the
mantra of anti corruption to begin to
exhume rotten institutions that
personified corruption, with the aim of
reviving them.
The government move is coming on the
heels of two recent reports on aviation.
First was the Ahmed Joda Transition
Committee report, which, among other
things, advised Buhari to merge the debt-
ridden Arik, Aero and others, to form a
national carrier. This is pigheaded
advise that amounts to putting all our
eggs in one basket, as that will mark the
end of private airlines in Nigeria.
What happens if the hybrid new
national carrier fails when there is no
more private airlines to fall back on?
What a faulty recommendation that
would plunge the new national carrier
into unimaginable financial crisis from
the outset.
Does one need to be a business expert to
know that you don’t start a new business
with debt-burden that you did not incur
if the business is expected to make
headway? How could Nigeria’s new
national carrier take over debt-ridden
private airlines and expect to break
even?
The second was Capt. Addulsalami
Mohammed Committee’s report that was
set up to work out the modalities for the
establishment of a national carrier.
While the Joda Committee was set up
shortly after the general election in
March, the Mohammed Committee was
inaugurated only last August. Both
reports favour the establishment of a
national carrier.
Reports show that six of Nigeria’s leading
airlines are heavily indebted to the tune
of about N130 billion. This huge debt
forced the airlines to turn to the Asset
Management Corporation of Nigeria
(AMCON) for a lifeline.
In 2012, virtually all the private airlines
operating in Nigeria were at the verge of
going under until AMCON came to their
rescue with a N132 billion lifeline. Ever
since then, the airlines have been
managing to remain in business.
Last year, 2014, the debt portfolio of five
of the private airlines with AMCON stood
at over 190 billion. This excludes sundry
debts owed to the Federal Airports
Authority of Nigeria (FAAN), the
Nigerian Airspace Management Agencies
(NAMA), suppliers and other institutions.
Worldwide, in this era of privatization,
having a national airline is no longer in
vogue. In a country like Nigeria, having
a national airline is bad business. Since
2000, government has been
implementing a privatization
programme that has seen major national
institutions like the power sector,
Nigerian ports, airports, etc, privatized
or concessioned. What is the rationale
for thinking otherwise with regard to a
national airline?
Most governments have hands-off the
running of national airlines or at best
have minority share in private-public
arrangement. For instance, all the major
international airlines that fly into
Nigeria such as Alitalia, Lufthansa,
British Airways, Aer Lingus, among
others, have been privatized.
Government has only 6 and 18 per cent
equity share in KLM and Air France
respectively. How Nigeria that is battling
with mundane issues bordering on
governance, social and economic
deprivation, add another headache in
the name of a national carrier is
baffling.
The future of aviation and airlines,
according to experts, are among the most
vulnerable to global and local shocks.
That means contingencies, cash reserves,
hedging of major risks such as oil prices,
according to IATA.
If Buhari is interested in aviation, he
should focus on providing the enabling
environment by way of upgrading the
facilities at the airports and making
them meet international standard.
Private airlines should be encouraged to
operate.
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