Following Nigeria’s latest failed attempt to launch a national carrier last year, the country’s federal government has resuscitated the plan.
It will soon release bids for a flag carrier, “which will be private sector driven,” confirmed Nigerian minister of transport Hadi Sirika at the recent Global Aviation Summit in Mumbai. Officials have appointed a consultant to submit a project report, said Sirika.
“By March we will have a business case and then begin the process to establish a national carrier,” he added. The project includes making Nigeria a hub for maintenance, repair, and overhaul in the region, where, apart from facilities in Egypt and Ethiopia, no other MRO infrastructure exists.
“With fleet sizes increasing in the continent, Nigeria is a good candidate for MRO through private-public partnership (PPP),” said Sirika.
Boeing’s 20-year Commercial Market Outlook for Africa suggests airlines will require 1,190 new airplanes as the continent endeavors to boost both intra-continental and intercontinental connectivity.
The manufacturer recently signed an $11.7 billion commitment covering fifty 737 MAX 8s with an option for 50 more with a privately owned Nigerian budget startup based in Lagos called Green Africa Airways.
The airline’s advisory board includes several big industry names, including former American Airlines chairman and CEO Tom Horton, former American Airlines chief commercial officer Virasb Vahidi, and Interjet CEO William Shaw. Green Africa has completed its first round of financing with New York-based Kuramo Capital.
While many African countries continue to protect money-losing state-owned air carriers, Sirika said Nigeria’s latest effort to launch a flag carrier will abide by calls for full liberalization on the continent.
“We are following a policy of transparency as an obligation we have to the single-sky African market in the spirit of the Yamoussoukro Decision, which Nigeria was amongst the first to sign,” he explained.
The Yamoussoukro Decision calls for, among other things, full liberalization of intra-African air transport services in terms of access, capacity, frequency, and tariffs.
Economic improvement across West Africa and a rising middle class have led investors to explore unexploited transport and logistics opportunities in the region. Analysts expect budget airlines to fill a gap that full-service airlines have left.
However, challenges remain, including failed partnerships, poor governance, and the massive competitive advantages foreign airlines that now control the African market enjoy.
“The conundrum for African countries is their national carriers get hurt because of competition,” Airports Council International director Angela Gittens told AIN. She added that if fledgling carriers could manage to absorb an initial phase of losses, they might manage to stand on their own.
by Neelam Mathews