Despite the controversial history of Nigeria’s national airline, top-level discussions on establishing a new national carrier are frequent in the aviation sector.
The first national airline, Nigerian Airways, was established in 1958. Despite having 30 aircraft in its fleet in the 1980s, its debt exceeded $60 million by the time that it was liquidated in 2003.
A short-lived arrangement between a number of institutional investors in Nigeria and the Virgin Group resulted in a new national carrier, Virgin Nigeria, in 2004. This airline had an appreciable impact within two years of operation, but bureaucratic challenges led to its divestment. Air Nigeria emerged from the restructuring process, but soon faced safety concerns and administrative complications before ceasing operations in September 2012.
Nigeria’s ruling party promised to revive the national airline during its 2015 presidential campaign and has since made efforts towards implementing its manifesto. In May 2017 the Federal Executive Council (FEC) approved the allocation of N1.52 billion ($4.99 million at the time) for the financing of preparatory steps towards:
- reintroducing of a national airline;
- establishing an aviation leasing company;
- concessioning Nigeria’s airports;
- establishing a maintenance, repair and overhaul facility; and
- developing aerotropolis and agro cargo terminals.
The FEC also announced the appointment of the Lufthansa Group as the transaction adviser and tasked it with designing a plan for the establishment of a new national airline. Prior to the unveiling of the Lufthansa Group as the transaction adviser, the government had indicated that it was in talks with Boeing and Airbus about leading a consortium of airline companies to facilitate the reestablishment of a national airline.
However, in February 2018 Aviation Minister Hadi Sirika released a statement that Lufthansa had presented a counter-offer which the government considered unacceptable. This led to the cancellation of the offer and Lufthansa’s replacement with the Airline Management Group as the government adviser for the project.
Debate on need for national airline
Nigerian government officials have repeatedly stated that the delivery of a new national carrier will:
- encourage sectoral reforms;
- generate jobs;
- yield foreign exchange;
- drive the growth of tourism and other sectors; and
- reignite national pride.
There has been much emphasis on how a national carrier can enable the country to achieve its tourism potential through exclusive travel discounts and promotional deals. Sirika has also argued that a new national carrier could help Nigeria to maximise the benefits of the single African air transport market initiative, which the African Union launched in January 2018 in order to liberalise civil aviation in Africa.
Closely related to this is the argument that Nigeria’s inability to fully utilise its bilateral air service agreements (BASAs) stems from the limited capacity of its commercial airlines. It is therefore hoped that a new national airline will be adequately established to acquire the required aircrafts and build the capacity to utilise the BASAs.
Please click to download the full paper on Nigeria’s Plans to Re-Establish a National Airline: The Issues Arising as originally published by the International Law Office.
I dream of a Nigeria where everyone knows what they need to know about the law.