Should Nigeria float a national airline or not? This project is gaining currency by the day. WOLE SHADARE writes that there is no better time than now to float a national airline
The big question
Each time people fly airlines of other countries, what readily comes to mind is, why can’t Nigeria have its own carrier? The debate around a national for the country is gaining currency by the day just as the government has taken the project as one it plans to bequeath to the nation.
Should Nigeria have a national airline? Yes, say some aviation experts; no, others argue, citing that should Nigeria make up her mind to float one, it should be private sector driven.
This has been the argument of experts in the sector who disclosed that the private sector model is best suited for the country.
This has however, been dismissed because of the greed of the private investors who are driven purely by quick return on investments without patience to nurture businesses to a height that would outlive them.
They are of the opinion that aside that, flag carrier airlines have failed the country even when the government gave them maximum support to succeed.
For clarity purpose, one needs to make a distinction between a national carrier and flag carrier airlines. A national carrier airline is an airline floated by the government as sole shareholders, to operate in the name of the government and represent the government in all aviation related bilateral services agreements.
A flag carrier is a privately owned airline that by agreement is designated to represent a government and fly on behalf of the government to represent it on all bilateral designated routes.
Chairman, Aso Savings and Loans Plc, an aviation consultant, Ali Mohammed Magashi, during the Colloquium on Aviation 2017, organised by CEO of Nigeriantravelsmart.com, Simon Tumba backed the government to fully float a national airline for the country.
To him, aviation is part of the macroeconomic infrastructure of government and it helps to support and stimulate other sectors of business, adding that aviation is a high capital, high risk, long gestation and low margin returns business, as such it cannot favourably compete with other less risky and higher return private sector investment opportunities.
Not a few believe that the failure of Virgin Nigeria should remain a recent sore in the peoples psyche and deter them from the experiments of flag carrier.
They stated that looking at the country’s experiences and other aviation success stories around the world, the nation does not need any more experiments.
Twenty top airlines in the world are either started by the government and in most cases still owned by government (United, Delta, American/US Airways, Lufthansa, BA, Air France/KLM, Turkish, Quantas, China Southern, China Eastern, Singapore, Japan, Cathay Pacific, Malaysian, Emirates, Qatar, Etihad, Ethiopian, EgyptAir, South African).
The above experiences show that all initial investments are made by governments, and it’s only when the airlines are developed, economies are grown and institutions of compliance have matured that the airlines are privatised.
With all the above government support, these governments still continue to support and bail out these airlines in periods of systemic economic down turns,
There is no success story of a privately started flag carrier airline in any part of the developing world.
The failure of Nigeria Airways was mainly due to poor management and political interference, but the failure of Virgin Nigeria, which is still very fresh in our memory clearly shows the poor capital investment by the private sector and also the conflict of interest where the flag bearer sees businesses in franchise, lease, training, maintenance, etc, all to the disadvantage and at the expense of the host country and the airline.
National carrier and manpower devt
Since the demise of Nigeria Airways, there has not been any opportunity for young aircraft maintenance engineers to log maintenance hours and get type ratings, because there are no operational hangers where heavy maintenance takes place.Many young pilots are now coming out of flying school without hope of getting jobs because the local airlines do not train on initial type rating.
An established aviation infrastructure provides manpower development in all aspects of aviation, that is aircraft leasing, purchase, flying, maintenance, cabin services and the larger hospitality industry.
An established aviation infrastructure also provides manpower development in air traffic engineers and controllers, aviation law and regulation, aviation finance, aviation security, meteorological services, accident prevention and investigation, emergency preparedness, management and control, etc.
A national carrier is its country’s brand to the World; it brings the world into its country and it takes its country to the world. Conventional wisdom suggests that developing countries (with small economies and high growth potential) invest in national airlines to take their brand and all its potential to the world and vice versa. It is an embassy with wings, transporting its country’s talents, skills, commerce, culture, cuisine, human resource and goodwill around the world.
Dubai and Singapore have successfully made their airlines their main brand, driving their national identity and growth strategy, and so have Ethiopian Airline and EgyptAir done here in Africa.
According to the World Bank, every one percent of the government fund spent efficiently on infrastructure leads to an equivalent one percent growth in Gross Domestic Product (GDP).
Kenya doubled its tourism revenue by the creation of Kenya Airways and this has positively impacted on its Gross Domestic Product (GDP).
For this to come to fruition, Magashi stated that political will and sincerity of the presidency will have to drive this with all the political might and sincerity of purpose to avoid political interference.
He noted that the process of aircraft purchase and other related procurement processes should be done by government to government with governments of selected aircraft manufacturers, to avoid extra third party added costs.
He equally stated that the process of feasibility and business plan should be open and transparent and it should involve local stakeholders for hands-on local market input.
There is no need to reinvent the will. There are model success stories of national carrier airlines that Nigeria can copy. The Government needs to engage directly with governments of aircraft manufacturers such as US, France, Canada, Brazil as the feasibility and business plan will determine.
The search for a national carrier may be gathering momentum. It is coming at a time many seem to have lost hope in domestic carriers as they are almost in comatose.