The federal government yesterday unveiled Nigeria Air as its new national carrier at the Farnborough air show in the U.K, however historical precedents of failure suggest it will be a near impossible task to pull off.
While Hadi Sirika Minister of State for Aviation, stressed that the carrier will be private sector led, history has shown this is not the first time government is floating a private sector led airline even as various attempts by past governments to set up national carriers failed over power play, government intervention, lack of management and unhealthy competition, amongst others.
Proposed national carriers and the ones that have gone into extinction in the past 50 years include Nigerian Airways, New Co, Nigerian Global, Nigerian Eagle, Virgin Nigeria, Air Nigeria, and Nigeria one.
An aviation expert Dondekojo Abayomi with the twitter handle @dondekojo explained in a thread, the rise and fall of national carriers in Nigeria.
According to him, after independence, Nigeria bought out the equities of Elder-Dempster and British Overseas Airways Corporation (BOAC) in the then West African Airways Corporation (WAAC).
It was renamed “Nigerian airways” in 1971. Nigerian airways lasted for about 40 years, and operated local and international flights to West and Central Africa. It also operated intercontinental flights to Europe, USA, Middle East and Asia,” he stated.
The airline was fully owned by government with supervision from relevant ministries. Government paid the debts and determined its routes. Civil Servants and the Military used its services at will and engaged the airline in rescue operations, pilgrimages and missions without payment. This is where the problem began, analysts say.
“Then they started trading the call sign to private airlines, usually for Hajj operations so the huge over-flight, landing and parking charges were left for Nigeria Airways to settle. Virtually, all the F27 and F28 work horses of the airline were either sold or given away to some African States by the Federal Government in a show of big brotherhood. We lent a lot to help the apartheid struggle in South Africa too,” Abayomi said.
“The airline owed IATA clearing house almost $50m. This led to the expulsion from the clearing house meaning, the airline couldn’t fly to a lot of places or connect airlines,” he explained.
Other national carriers that attempted to spring up after this were bedevilled with similar challenges and the dream of a national carrier died.
A typical example was Virgin Nigeria the Nigerian flag carrier airline which was established in 2004 and commenced operations in 2005.
Virgin Nigeria was established as a wholly new multinational company (MNC) with private ownership. Its ownership was spread thus, 51 percent Nigerian institutional investors, 24.9 percent Virgin (Sir Richard Branson, 51 percent owner of Virgin Atlantic), 24.1 percent Singapore Airlines (49% owner of Virgin Atlantic), so it can be said that while Nigerian Institutional Investors owned 51 percent of the venture, Virgin Atlantic owned 49 percent of its shares.
Virgin plunged into the Nigerian Market in 2004 with Virgin Nigeria after a bid and selection process as the new flag carrier after the Nigeria government announced the bankruptcy of its own Nigeria Airways, the then flag carrier. It was expected that Virgin’s many successes would be replicated in the new Virgin Nigeria Airways.
However, in 2009, barely four years after its commencement, Virgin, the major shareholders, announced their withdrawal from the partnership which signified the termination of what was known as Virgin Nigeria Airways.
A research paper by Eric Akpo, submitted to The University of Liverpool, Department of International Management research titled ‘Birth, Rise and Fall of Virgin Nigeria’, observed that Virgin Nigeria purportedly faced a lot of external challenges and internal squabbles in the build-up to Virgin’s withdrawal from the partnership.
Some of the external factors include the case made against its request for a permit by other major operators in the aviation sector in the USA based on the others’ claims “of an alleged failure on the part of the Nigerian Government to approve a code-share arrangement between American Airlines and British Airways. American Airlines claimed then that this alleged denial violated the US-Nigeria Open Skies Agreement.”
Other external factors for the closure of the then National carrier were poor infrastructure in Nigeria, conflicts with government aviation authorities as regards use of facilities and poor profit turnout.
Richard Branson, the chairman of Virgin Atlantic said then: “We have virgin’s ill-fated footsteps by setting up a new airline in Africa in conjunction with Nigerian government. The details of the doomed attempts to crack the Nigerian market in the 2000s is better imagined. We put together a very good airline-the first airline in West Africa that was ever IOSA/IATA operational safety audit accredited but unfortunately it got tied down to the politics of the country. We led the airlines for 11 years.
“We fought daily battle against government agents who wanted to daily make fortune from us, politicians who saw the government 49% as a meal to seek for all kinds of favour, watchdogs (regulatory body) that didn’t know what to do and persistently asking for bribes at any point.”
Branson disclosed that N3billion was realised for the federal government of Nigeria during the joint venture and the government didn’t bring anything to the table except dubious debts by the previous carrier, Nigeria Airways.
He regretted that the joint venture should have been the biggest African carrier by now if the partnership was allowed to grow, but the politicians killed it.
By Frank Eleanya