Minister: No domestic airline filled the vacuum left by Nigeria Airways
Nigerian Minister of State on Aviation, Senator Hadi Sirika, is insisting that there is urgent need for Nigeria to establish a national airline.
He said that the process of establishing one would soon be completed. His efforts to start one were stalled in September when the federal government halted the take off. The minister said take off was merely suspended and not stopped.
According to Sirika, no domestic airline has evolved to fill the vacuum left by Nigeria Airways since it ceased to operate more than 15 years ago due largely to wrong business models, low capitalization and poor governance structure . The minister made these assertions during the 5th Aviation Stakeholders Summit held in Abuja. He said Nigeria presently has Bilateral Air Services Agreements, BASA, with eighty three countries, many of which have been reviewed to create opportunities for domestic carriers. However, they remain largely unutilized, as only 10% of these agreements have been used due to limited capacity. The BASA with Qatar and Singapore were recently signed and ratified. Only 28 out of Nigeria’s BASAs with 83 countries are active.
He further said the new national carrier will give impetus to the emergence of Nigeria as hub for the West and Central Africa and will promote reliable air transport services within the region. He also said it will support the growth of the aviation industry and domestic airlines through infrastructure expansion, traffic/routes expansion and manpower development associated with the national carrier .
Aside creating employment for teaming Nigeria youths, the new national airline will compete with foreign airlines for a share of international routes through competitive pricing thereby reducing capital flight. “While infrastructure are necessary for the emergence of a hub, the establishment of a national carrier will give impetus to the development of a hub in Nigeria. All hubs must have National or strong carriers”, he said Sirika added that “contrary to the fear that the National Carrier will suffocate existing domestic carriers, it will rather benefit them and the industry at large. It will assist in stimulating overall air passenger travel demand, develop new routes, enhance infrastructure and promote manpower development”. On the suggestion that Aero and Arik Airlines which are under the control of AMCON should be merged to form a National Carrier , he said that “is not tenable as the National Carrier would get entangled with huge indebtedness of the airlines, litigations and other encumbrance”.
Sirika dismissed the claim that government was to spend USD300 million on the national airline. However, he said “ a Viability Gap Funding of USD155 million was required in accordance with the Outline Business Case OBC. This does not represent the proposed 5% equity holding. The value of the shareholding would only be determined upon valuation by investment experts and approval by relevant authorities”.