Wednesday 19thDecember 2018: Journalists from local and international media organisations gather at a major event organised by the Federal Ministry of Aviation. The Minister of State for Aviation, Senator HadiSirika, elatedly took the microphone and announced that the once departed national pride has been restored. And this latter glory is built to surpass the greatness of the former, Nigerian Airways. Spurred by the announcement, the #NigerianFlagCarrierReturnsimmediately becomes the top trending topic.
By Thursday 20th December, the front pages of virtually all the national dailies areembellished with beautiful captions attempting to capture the ecstasy of the moment. For the ruling party, the campaigns for the imminent elections just received a major boost. Members of the party broadcast the national carrier as a major achievement of the government. And again the Buhari administration has succeeded where previous administrations failed.The opposition deploys all arsenals to deflect the excitement. On the other end of the bridge, Nigerians are enamoured by the beautiful logo of the newly introduced national pride and just cannot wait for the new national baby to start walking in the New Year.But then the perceptive stakeholders wonder what fate awaits the local airlines that have been struggling to survive the harsh economic environment.
The above paragraphs attempt to describe the possible events that await our aviation industry. Few days ago the Minister of State for Aviation, Senator HadiSirika enthusiastically announced that the ministry had obtained Outline Business Case Certificate of Compliance from the Infrastructure Concession Regulatory Commission (ICRC), which symbolises the Commission’s approval and endorsement for the take-off of the national carrier. To clarify, the ICRC is an agency of the Federal Government of Nigeria responsible for the development and implementation of Public Private Partnership framework for the provision of infrastructure services. Announcing the approval of the Commission, the minister further assured that the December take-off date is still very visible and the ministry is committed to ensuring that the country enters the coming year with a national carrier.
Commendably the minister has performed excellently in carrying the nation along in the entire process. For instance, few weeks ago the ministry launched an engagement programme inviting the Nigerian youths and students to contribute their ideas and creativity in naming the new carrier. Although the portal was closed just three hours after its launch before many Nigerians could even suggest names, it shows the intent of the ministry to create a national sense of ownership in the establishment of the carrier. Nevertheless,essential aspects of the project are still shrouded in ambiguity. Yes, the project will be driven by the private sector yet no one knows who the investors are. However, the minister revealed that the preliminary cost of the airline will be $8.8 million and the formal take-off cost will be $300 million. The nation is also expected to receive the first set of airplanes on December 19 with a subsisting plan to acquire 30 airplanes in five years. The order for the planes will be made on July 18, which is the same day the logo, colour, name and structure of the airline will be unveiled. Optimistically, the airline is expected to become profitable after three years. Whilst these details are important for Nigerians to have sufficient information on the process, there are more pertinent concerns. The minister stated that the airline will be completely driven by the private sector yet the government has to bear the initial cost, and the equity investment from the private sector will largely depend on the profitability of the airline when it finally takes off. In essence, technically the airline is taking off as a government investment. More so if the national carrier turns out unprofitable after take-off there will be no private equity investment and whatever the government spends now automatically goes down the drain. Nevertheless, being a former pilot it appears the minister has a solid plan for the national carrier and the fair gesture is to give him the benefit of the doubt. The major concern remains the fate awaiting local airlines in the dispensation of a national carrier. The minister has assured that the introduction of the national airline will not affect their business in any way. That remains in the realm of mere optimism because there are currently no visible plans to support the local airlines. The proposed flag carrier will naturally enjoy some preferential privileges andbenefits that will support its operations giving it an edge over other operators. These benefits will also provide the incentive for the airline to crash prices and attract more patrons at the detriment of the other airlines. If there are no deliberate plans by the government the introduction of the flag carrier will only worsen the already harsh business environment for local airlines in the country, which portends long term dangers to our aviation industry. It is therefore important for the government to develop strategies that will benefit the local airlines and spur them to profitability since we are bent on having a flag carrier.