After 7 Years Wait, Recent Court Injunction, Will Nigeria Air Ever Take Flight?
While Nigeria Air has failed to take to the skies, Uganda Airlines, which began its own process in January 2018, started operations on August 28, 2019, taking the government a period of 19 months to get things running.
When the Ministry of Aviation announced the agreement between Nigeria Air Limited and Ethiopian Airlines (ET) Consortium as its strategic equity partner in September 2022, it felt like the seven years wait was over and the national carrier promised by President Buhari during his electioneering campaign in 2015 to replace the defunct Nigeria Airways was finally taking to the sky.
Alas, Nigerians were about to witness the beginning of another drama that could prevent the project from seeing the light of day.
Minister of Aviation, Hadi Sirika had disclosed that the deal with ET, the preferred foreign investor of Nigeria Air, following a successful bid under the Public Private Partnership (PPP) arrangement will see it own 49% stake of the business, while the Federal Government (FG) hold 5%, and Nigerian entrepreneurs 46%.
“Nigeria Air is well on its way to being launched with three Boeing 737-800 in a configuration very suitable for the Nigerian market. The Request for Proposal (RFP) under the PPP act, governed by ICRC, is completed. After a careful, detailed and ICRC-governed selection process, Ethiopian Airlines (ET) Consortium has been selected as the preferred bidder”, the statement partly read.
It further explained that the money spent for the launch of Nigeria Air, for all the requirements to establish an AOC and be admitted to starting an airline operation is well within the 5% capital investment of the FG.
JournalNG gathered that in November 2019, the aviation ministry approached the National Assembly for the sum of $338 million for ‘setting up’ of the airline. It is however, unclear if that amount is the FG’s share of its 5% investment.
Findings also revealed that between 2019 and 2022, budgetary votes earmarked for the national carrier add up to N14.65 billion, with an additional N1.3 billion in the 2023 Appropriation Bill (cumulative N15.9 billion in five years). According to The Guardian, the minister, recently, denied the figures, saying only N400 million had been approved.
After Buhari’s victory at the polls in 2015, an Aviation Development Roadmap was unveiled, with Nigeria Air the major project of the minister, who had hoped to deliver before the end of the Buhari-led Administration in May 2023. But recent development seems to have thrown a spanner in the works, killing the engine just as it was about to take off from the runway after many failed attempts in the past.
Back in July 2018, Sirika unveiled the name of the national carrier and logo at the Farnborough International Airshow in London. At the time, he said that the airline would begin operations in December 2018, but that did not materialise. In November 2021, Sirika after a Federal Executive Council (FEC) meeting said that the national carrier would take off in April 2022, that also did not happen.
It was looking possible in June after the Nigerian Civil Aviation Authority (NCAA) presented the Air Transport License (ATL) to Nigeria Air, one of the licenses airlines receive before they can operate flight services, while the other, Air Operator’s Certificate (AOC), comes shortly after. It also named former Managing Director of the defunct Virgin Nigeria Airways, Captain Dapo Olumide as the interim Managing Director. The Minister then assured that the national carrier would commence operations in July, after failing to meet the April 2022 date, but it took the FG until July 27 to authorise the leasing of three aircraft for the airline.
While Nigeria Air has failed to take to the skies, Uganda Airlines, which began its own process in January 2018, started operations on August 28, 2019, taking the government a period of 19 months to get things running. Uganda Airlines has grown to have six aircraft – two Airbus A330-800 with a 258 passenger capacity, and four Bombardier CRJ900ER that conveys 76 passengers to a total of 12 destinations.
Similarly, Ibom Air, established by the Akwa Ibom State Government three years ago has continued to grow and recently celebrated hitting its two millionth passenger mark. The airline also placed an order for 10 brand new Airbus 200-300 airplanes last year due to arrive next quarter.
It is however, worthy to note that Uganda Airlines recorded $43 million loss in the 2020/21 financial year and another expected in the 2021/22 report. In the same vein, Kenya Airways reported $95.8 million loss for the first half of 2021, and $82.4 million for the same period in 2022, its ninth consecutive half-year loss, with the government planning to take the venture off its hands.
While there have been several postponements for the start date of Nigeria Air in the past, with the FG failing to meet set deadlines for different reasons, which has raised questions and doubts as to whether the project would eventually happen, the present setback in the way of the national carrier is coming from indigenous airline operators and stakeholders.
On November 10, 2022, a Federal High Court sitting in Lagos issued an Order of Interim Injunction, stopping the agreement between Nigeria Air and ET in suit FHC/L/CS/2159/2022 filed by six plaintiffs: Registered Trustees of the Airlines Operators of Nigeria (AON), Azman Air, Air Peace, Max Air, United Nigeria Airlines and Topbrass Aviation.
The suit listed Nigeria Air Limited, Ethiopian Airlines, Minister of Aviation, Hadi Sirika, and Attorney-General of the Federation, Abubakar Malami, as defendants one, two, three and four respectively.
Among other prayers of the plaintiffs before the court are: an order of the court to stop the national carrier deal and withdraw the Air Transport Licence already issued to Nigeria Air by the FG/NCAA.
A declaration that Ethiopian Airlines was incompetent to bid for shares in Nigerian Air and commence business accordingly, and an order setting aside the entire bidding/selection process(es) for the “Nigeria Air” project as well as the approval, grant or selection of Ethiopian Airlines by other defendants in the process.
The presiding judge, Justice Lewis-Allagoa, after hearing the submission of Nureni Jimoh SAN with Abubakar Nuhu Ahmad Esq., counsel for the Plaintiff/Applicant move in terms of the Motion paper granted the injunction.
The injunction order read: “The Court after careful consideration of the application and submission of counsel. It is hereby ordered as follows: “1.That an Order of Interim Injunction is granted restraining the Defendants either by themselves, agents, privies, Principals or any other persons whosoever from draft the proposed executing “NATIONAL CARRIER ESTABLISHMENT AND AGREEMENT BETWEEN THE FEDERAL GOVERNMENT OF NIGERIA (represented by the 3rd and 4th Defendants) and the strategic equity partner (the 2nd Defendant) or giving effect to and or suspending the sale and transfer of the shares & operations of the 1stDefendant by the 2nd Defendant pending the determination of the Motion on Notice.
“2. That an Order of Maintenance of Status Quo by all parties in this suit from taking any further step(s) in relation to the subject matter of this suit pending the determination of the Motion on Notice is granted.
“3. That an Order of Accelerated Hearing of this suit is granted”.
The Aviation Minister, while reacting to the injunction, stated that no rational court can stop the process between the FG and ET, insisting that the Nigeria Air project is on course despite the opposition. He explained that since the Aviation Roadmap was drawn and unveiled to the public, for every step taken, stakeholders were carried along including the unions and airline operators.
According to Sirika, he personally and through other formal means invited the operators to be part owners of the national carrier but they refused giving different excuses, adding that, kicking against the choice of Ethiopian airlines as strategic investors was uncalled for.
His words: “The Max air, the Azman, the Air peace, the Ibom, everybody, I met them. I told them please come and partner in this airline and own it, it is meant for you the private sector and I went to them individually. But I cannot see any rationale court that would say, am stopping somebody from establishing a company because Nigeria Air is a Limited Liability Company known to Nigerian laws in the Corporate Affairs Commission. If anyone wants to invest in that company, there is no law in Nigeria stopping them from doing so”.
On November 24, the court further instructed the parties involved to maintain status quo, pending the determination of the suit filed by the plaintiffs in suit FHC/L/CS/2159/2022 on the proposed Nigeria Air, while adjourning proceedings on the matter till February 13, 2023.
Aviation analyst, Group Captain John Ojikutu (Rtd), CEO of Centurion Aviation Security and Safety Consult, in a recent interview with JournalNG said that he already lost faith in the Nigeria Air project since 2019, because most of the steps taken by the Aviation Ministry and Minister has been negative.
According to him, the arrangement between the defunct Nigerian Airways, KLM and South African Airways did not work out or benefit Nigeria, which is similar to the ET partnership.
“We should learn lessons from the relationship between Nigeria Airways, KLM and South African Airways, which collapsed. They would even fight about loading passengers here and in London; I witnessed it. We have a lot of experiences, but make it look as if there is nothing to make reference to. Now the national carrier is still being debated almost four years later”, he said.
Also, Labour Party (LP) presidential candidate, Peter Obi has said that his administration would not support the Nigeria Air project if elected into office in 2023. According to the former Anambra State Governor, such venture should be left in the hands of capable people in the private sector, as it would be run aground if the government is involved.
One of Obi’s supporter in the UK, back in August 2022, had asked if he would bring back the defunct Nigeria Airways, to which he replied with an emphatic no.
He explained: “A very good question. No! We need to encourage private sector to drive the process. It failed because government should not manage business. What we need in Nigeria is to bring committed people from the private sector to run businesses. Government should not run businesses, it will fail. The reason British Airways is still functional today is because it is no longer being run by government”.
Echoing the position of Obi on the defunct Nigerian Airways, Ojikutu said: “There are so many things about Nigerian Airways that people outside don’t know; people in the government agencies would board flights with warrants; without paying. Out of 60 passengers, 20 will be government officials.
“When it got to the level where the new government came in and mandated them to pay, they collect funds for business class and book economy class, pocketing the balance and in the end, sit in first class. And then those that have money for first class are stranded. It is what I have seen. These are the ways they killed Nigerian Airways”.
Nigeria Airways which was founded in October 1, 1958 ceased operations in 2003. The airline was plagued by mismanagement, corruption, and overstaffing. At the time of closure, it had a total debt of US$528,000,000, as well as a poor safety record. Some stakeholders also believe this might be the fate that awaits Nigeria Air.
However, Dr. Gabriel Olowo, President, Aviation Safety Round Table Initiative (ART) following the announcement of the partnership, said ET comes as a partner of good choice for Nigeria Air.
Olowo explained that the partnership is to the advantage of Nigeria for simple purposes of Code Share Agreement (CSA) and Blocked Seats Agreements (BSA) outside the airline’s intended direct services, adding that the merits of cooperation and collaboration will more than outweigh the competition, provided the management is on top of its game.
He continued: “Nigeria Airways in the past operated to many countries (not Directly) but by Commercial Agreements.That is not all, Interlining and Global Alliances ( which is a necessity in today’s aviation) comes with ease given this partnership rather than the airline struggling on its own for relevance and partnership for route expansion & penetration purposes.
“Robust Maintenance Facility of ET and its varied Fleet will come very helpful to the young Airline. Manpower trainings and Personnel exchanges would be another benefit. ET as an African partner is inward looking and its very good for the implementation of Single African Air Transport Market (SAATM) under African Continent Free Trade Agreements (AfCFTA)”.
On the fate of Nigeria Air, JournalNG learnt that the next court hearing has been brought forward to January 16, instead of February 13, 2023.
According to a senior official of the Ministry of Aviation and a member of the airline implementation committee, the government is committed to defend the new airline in the interest of the country.
Nigerians, as well as aviation stakeholders are earnestly waiting to learn of the outcome of court proceedings. If it swings in the favour of the defendants, then President Buhari might get to commission Nigeria Air with all the regular fanfare before he leaves office. But if it is the other way round, then the process for the search for new investors may have to start all over again.
How long will this take? Will the new administration decide to scrap the project or hand it over to private investors completely like Peter Obi had suggested? What about all the financial commitment already made by FG and how can that be recouped? The plaintiffs may even decide to appeal if the verdict does not go their way. Whichever way, the drama is not over yet.
