If the Airline is being proposed as a sustainable business, which will generate profit, then government should not be involved in its management. This is because over the years government has shown that it cannot run a business successfully.
The recent report in the media that the Federal Government of Nigeria has concluded arrangements to set up a new National Airline is indeed a welcome development. According to the report, the carrier whose name is yet to be known, would start operations with an initial take-off grant of $1billion, while another $1 billion has been set aside for over four years to rebuild old airport terminals and construct new ones.
That Nigeria needs a new national Airline is not in doubt. Indeed, many Nigerians have watched with envy as the National Airlines of some European and African countries make huge profits from Nigeria’s air travel market. The thinking has been that with a National Airline, the country may benefit from the huge profits arising from carrying Nigerian passengers. Only recently the Chief Executive Officer of Ethiopian Airlines, Tewolde Gabremariam, observed that Nigeria needed two National Carrier as a result of its large travelling public. There is no gain saying that Nigerians remain the most travelled people in Africa, obviously in search of the so-called greener pastures and business ventures.
Besides, a new National Carrier would ensure that the country has a better negotiation of Bilateral Air Services Agreement (BASA) while reducing to greater extent capital flights from Nigeria. In fact it is projected that if the country has viable airline with a National Carrier, the aviation industry would employ “additional 350,000 workers and make in-road into halving the $15 billion capital flight” from the sector. So the question is not whether a national airline is desirable at this time of the country’s history but what should be the criteria for floating the carrier? In other words what should be the framework for the ownership structure? Recall that the country once had a national carrier known as the Nigeria Airways, which was liquidated during the first term of former President Olusegun Obasanjo’s government. The carrier then run by the government was notorious for its ineptitude, corruption and poor management. As a matter of fact, aviation industry watchers have repeatedly at various fora accused the government of liquidating the defunct Nigeria Airways.
If the Airline is being proposed as a sustainable business, which will generate profit, then government should not be involved in its management. This is because over the years government has shown that it cannot run a business successfully. This Newspaper would rather prefer that the new National Airline be private driven. Government may be a stakeholder but must not own more than 10percent equity just for the new Airline to enjoy the protection of the government. The success stories of Kenya and Ethiopian Airlines should be a guide for the government on this matter. The Kenya Airline is currently owned by individual Kenya shareholders, which constitute 32.5 percent, while the government has 22percent.The Air France-KLM, 26percent,foreign institutional investors, 4.36percent,while individual foreign investors own 0.07percent .In the full years ending March 31, 2005,reports indicated that the Airline’s profit after tax tripled over2003-4 to $50million.The Ethiopian Airline today is the pride of every Ethiopian.
The government should put in place structures for the new Airline to take off. That is why we welcome the decision by the government to grant another $1 billion for renovating old Airport terminals and constructing new ones. Indeed, government must facilitate the creation of a hub, probably the Murtala Mohammed Airport in Lagos.
