November 29, 2022

Nigeria Transport Hub

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Aviation Industry Players Demand $1.5bn Support as FG Extends to Dangote Refinery

5 min read

Gen. Muhammadu Buhari (Rtd), President, Federal Republic of Nigeria

Stakeholders in Nigeria’s aviation industry have made a fervent appeal to the federal government to eschew partiality and parochialism and extend to the entire air transport sector of the national economy, a similar facility such as generously extended to one indigenous startup company in the oil and gas sector, Dangote Refinery, Lekki, Lagos.

The plea came to light at the Aviation Town Hall Meeting which was held virtually last weekend, organized by Avaero Capital Partners and supported by eminent stakeholders in Nigeria’s air transport industry who, examined the modus operandi for birthing the much-touted national carrier, and highlighted the pitfalls.

At the virtual town hall meeting titled, “Nigeria Air: The Solution To Nigeria’s Aviation Problem? Which was anchored by Sindy Foster, Principal Partner, Avaero Capital Partners, participants expressed the view that the domestic operators only got bashed rather than support and commendation for trudging along despite the prevailing unfavourable business climate operators are compelled to contend with.

Another player in the industry, Mr. Babatunde Adeniji, Partner/Lead Consultant, General Sales and Solutions Management, said the approach of the government in managing the air transport industry was largely responsible for the underdevelopment of the industry.

Sindy Foster, convener, and anchor of the virtual town hall seminar

Mr. Adeniji said the government obviously was disbursing the foreign exchange expense of the national carrier project from the official exchange rate of the Central Bank of Nigeria, CBN, the rate most likley the private airlines had not been privileged to source their forex needs.

He challenged the government to extend the official CBN rate of forex to the aviation industry players in all its value chains and watch if there would not be a difference for the better.

He said that Ethiopian Airlines purportedly picked as the preferred bidder to the proposed national carrier was regularly supported heavily by the Ethiopian government yet the federal government of Nigeria seemed baiting no eyelid for a fellow government from the horns of Africa to have dominating equity in its national carrier.

Adeniji noted that by the present convolution of the national economy, average Nigerians are being impoverished and their disposable income continued to dwindle which portends a bad omen for air transport as fewer people would ever head for the airports.

He argued that bringing in Ethiopian Airlines under any guise would instantly turn a capital flight from the national economy as more pressure would automatically be put on the nation’s scarce foreign exchange.

Adeniji also noted that since Ethiopian Airline was the only bidder, that in itself should have prompted those in charge to be wary but they disconcertedly went ahead and not bordered of whatever bad consequences their decision would have especially on the domestic operators and by extension, the national economy at large.

Corporate sponsor of the virtual town hall seminar

Adeniji however noted that if the height Ethiopian airlines had attained was that attractive, Nigerian operators could equally grow if the government could extend similar largess ($1.5billion USD) it extended to Dangote Refinery to the domestic airlines.

It is often a universally accepted dictum that what is good for the goose should also be good for the gander.

Adeniji avowed that the other disaster the strange marriage between the proposed Nigeria Air and Ethiopian Airline would cause is the distortion in competition in the domestic market.

He noted that the distortion would be skewed in favour of ET to the detriment of the entire domestic operators.

He urged the government to tinker with the existing regulation so as to allow the minister to carry out his wishes as he had for the umpteenth time said the national carrier would flag off with three wet lease aircraft which is against the regulations.

Hence he said he had no confidence in establishing a national airline because both the micro and the macroeconomy are just not right, and making such a huge investment under that climate, may make success hard to come by.

Prof Obiora Okonkwo, OFR, Chairman, United Nigeria Airlines, UNA, and Public Relations Officer, PRO, Airline Operators of Nigeria, AON

The Chairman/Chief Executive of West Link Airlines, Capt Ibrahim Mshelia, frowned at what he described as a gross lack of transparency in the process to birth the national carrier.

He said the method that had been severally tried and failed is what the ministry is repeating presently.

Mshelia cited the example of a similar arrangement done by Nigeria Airways with British Airways in 1992, and with Virgin Nigeria in 2001, which all failed. He asked what the motivation is again for choosing to fly the path botched more than twice.

He however asked who those staff of the aviation ministry registered with the Corporate Affairs Commission, CAC, as members of the board of directors of Nigeria Air, are actually representing.

Mr. Olumide Ohunayo, an Aviation Analyst, at Zenith Travels, expressed apprehension if the other existing commercial agreements ET already had would not jeopardize Nigeria Air’s prospects of accessing markets on a clean slate.

Prof Obiora Okonkwo, Chairman of United Nigeria Airlines, UNA, and spokesperson for the Airlines Operators of Nigeria, AON, said the intent and purposes of alliance with ET is to ensure, and fast-track the death knell of domestic operators.

He said as big and robust as the US is, it does not just throw its economy open to be plundered rather it jealously guides it through various instrumentalities of international diplomacy.

Okonkwo called on the aviation ministry to desist from demonizing the domestic operators as the operators are strong enough to increase the number of flag carriers and become more robust in their service delivery on domestic and international routes.

Succinctly put, the AON Spokesperson said there was nothing patriotic nor Nigerian in Nigeria Air apart from the name. Its structure he noted belonged to a private owner and not Nigerians nor the Nigerian government.

Other contributors at the Aviation Town Hall Meeting whose views we will post in the course of the week for your reading delight are, Capt. Roland Iyayi, CEO, Top Brass Aviation, Comrade Olayinka Abioye, President/CEO, Oktoba Seven Strategies, Grp. Capt. John Ojikutu, Aviation Security Expert, Centurion Security and Safety Consultants, Alex Nwuba, President, Aircraft Owners and Pilots Association, and Wole Shadare, Aviation Editor and Publisher, New Telegraph and Aviation Metric

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