Africa: National Carrier, Arrival Of The Qatari Investors?

Qatar is a small country in the Middle East with vast oil and gas resources. It has amassed $335 billion in assets around the globe, making its sovereign wealth fund the 14th largest in the world, according to the Sovereign Wealth Institute. Qatar’s national carrier, Qatar airways, has invested billions of dollars in other carriers in other countries, with huge gains and a few losses.

The airline has nearly 10 per cent of IAG group, the parent company of British airways; Italian airline Meridiana changed its name to Air Italy with the backing of Qatar Airways, its new shareholder, aiming to become Italy’s flagship carrier as UAE-backed Alitalia undergoes bankruptcy proceedings. Qatar airways has declined to continue with its proposed investment in American Airlines. Last week, Qatar Airways indicated its intention to start a fully- owned airline in India.

civil aviation ministry of India had asked the Qatar government and state-owned Qatar Airways’ CEO, Akbar Al Baker, to start an airline in India and participate in the country’s growth story. Qatar Airways has also agreed to acquire a stake in Cathay Pacific Airways, a deal that would help it gain a foothold in the world’s second-biggest aviation market, after the Doha-based carrier was snubbed by American Airlines. The story of Qatar’s aggressive foreign investments has remained progressive since last year.

For such a tiny country with a strong financial wherewithal,foreign portfolio investments in viable businesses will boost domestic growth. The game of portfolio investment or foreign direct investment is about taking a leap at the right time. It is therefore, not surprising that Qatar airways has earned good returns on some of its foreign investments that it is in an overdrive mode to spread out. When I heard from the grapevine that with excess, unused airplanes, Qatar airways or its affiliate is planning to invest in Nigeria as the sole national carrier, instantly there were some reservations:

(1) what is the attraction of investing in Nigeria if the new National carrier, which will be owned and operated by Qataris, will domicile in a country with high level of corruption?

(2) In what capacity will the new company operate? Will Nigerians be part of the initial arrangement or will it be a foreign direct investment(FDI)?What type of aircraft will they bring, and what routes will they be operating—domestic or international? Was the minister of state aviation nursing this idea before coercing Nigeria into signing the Single African Sky agreement?

Is the new national airline going to be a subsidiary of Qatar airways, or a brand-new company registered in Nigeria? Whatever the outcome, the minister of State for Aviation, Hadi Sirika, has had a plan to bring a foreign airline to take overthe remains of Nigeria airways, no matter the peril to our domestic operators. While Sirika’s intent might be of genuine concern for Nigeria, his approach is still undefined, and almost self-centered.

Nigerians will fly any aircraft operating within its airspace, foreign-owned or not. The question is the survival of such a venture by those willing to invest in this country. Capital flows to a country like Nigeria must be warmly embraced, if the goal is for genuine economic stimulation.

The story of Virgin Nigeria is still fresh in our mind; the grandiose arrival and celebration of a successful airline, with a branch in Nigeria, only for its disappearance within six years of debut. Although the Arabs have excess liquidity to throw around, the corrupt system could frustrate them out in a short time. Ministers after ministers of aviation have refused to create enabling aviation business environment that could foster growth for everyone. This is not to discourage any investor from coming to Nigeria to support the industry, but in a country where, even the minister of aviation’s mind-set is to reap without sow, the system’s integrity remains weak and undependable. Nigeria is a country of paradoxes.

The leaders who are constantly in search of good tidings, always fail to protect and safeguard the structures that support the system. Aviation industry in Nigeria is constantly in a state of decay— because those who have been appointed to supervise it have failed to do so. These repeated feats have tweaked the airline industry to perennial bankruptcies. Sadly, Stella Odua and Hadi Sirika are two ministers of aviation that have skewed the aviation industry towards themselves: nepotism, manipulating the system for self-aggrandizement and disregarding the existing protocols.

These irrational behaviours, unorthodoxy with extreme desire for illicit wealth can only lead to mismanagement and maladministration. The overarching authority of the supervising ministry, influenced by the ministerial hegemony, has unfairly dwarfed industry growth. Arbitrary increment in service charge by government -owned service providers, on the directive of the incumbent minister of aviation, has routinely reduced the marginal profit of our domestic airlines. Aviation industry in Nigeria will remain underdeveloped until a selfless messiah with Nigeria at heart is positioned to lead the sector. Unfortunately, very few Nigerians meet this criterion today.But we must remain resolute to achieve the dream of a prosperous industry for the next generation.

Level playing ground We welcome the Qatari investors if Hadi Sirika is sincere about a level -playing ground for all stakeholders, especially those who borrowed heavily to invest in the sector. It will be unfair and possibly unacceptable, if the Qataris and their company are allowed lower navigation and landing charges to motivate them to come. Such one-sided incentive will create discontentment in the industry—since the minister of state has practically turned down such a request by the Airline Operator’s Association of Nigeria (AON) to support local operators.

Investing in Nigeria is a big gamble for domestic and foreign investors; therefore, if Nigerians are denied concessions for operating in a harsh environment like ours, international risk-takers like Qatar must bear the same scourge. Virgin Nigeria had enormous concessions when Richard Branson was invited to float an airline. Every necessary step to an Air Operator’s Certificate (AOC) was waived, to fasten the realization of a Virgin brand in Nigeria. As soon as President Olusegun Obasanjo, the major proponent of the airline left the stage, Virgin Nigeria found itself in thedungeon of political tigers. One of the most admired airlinebrands left Nigeria for a more aviation- friendly country. Sir Branson himself attacked Nigerian politicians for killing dreams. Hopefully, the Qataris will not meet the same fate after the departure of this administration.

It takes enormous guts to create a viable enterprise in Nigeria, because of the endless -malignant -corruption in the system. Those who dare to challenge the status quo always fail to realize their dream of a fruitful investment.This is Nigeria, a country where law and order do not exist, and, illegality is the most positive way of getting the job done. Domestic actors have learnt the trait, but foreigners get frustrated out within the shortest time, especially if their employees are non-Nigerians. MTN, the largest mobile network in Nigeria, has had to learn how to swallow the bitter pill of the callous Nigerian factor.

Nigerian airline operators are, regrettably, not united to challenge a system clouded with insanities. Year after year, a new aviation minister mounts the stage and crowd-out the operators. Those who go-behind to lobby their wayout, do so; but by sabotaging their colleagues in the industry. The lack of unity has made everyone vulnerable; the result is loss of revenues and the marginal profitability the airline industry rarely offers. Again, we welcome any investor that can create jobs for Nigerians–if and only if–such an investor is not imported to disturb the existing structure that will send more airlines into early graves. Those investing in the national carrier project should first, face the international markets; let the struggling domestic carriers face the domestic routes to spur any possible survival of our local airlines.

Source: leadership.ng