The establishment of Nigeria’s new flag carrier, Nigeria Air, six years after it was initially announced in 2018, has come at an inflection point in the country’s aviation sector.
Nigeria Air has provided us with a glimpse of an ownership structure that could be adopted by airline businesses in Nigeria during the next decade. However, the new flag carrier has been met with both support and opposition due to its ownership structure with Ethiopian Airlines (EA).
But the question on everyone’s mind is when will Nigeria Air launch its operations?
In an exclusive interview, AeroTime sat down with the Minister of Aviation of the Federal Republic of Nigeria, Senator Hadi Abubakar Sirika, who stated that Nigeria Air represents opportunity, not just for the country’s aviation sector and Africa, but also for Nigeria’s domestic airlines.
Many people in the aviation industry, as well as many Nigerians and Africans, are all wondering the same thing, when will Nigeria Air be launched?
Well, Nigeria [Air] will launch shortly. There is a process to establishing an airline and that process is driven by the CAA of Nigeria, which is the Nigerian Civil Aviation Authority (NCAA), and it comes in phases: phase one, two, three, four, and five. Those processes must happen. But before those processes will happen, because it is a private public partnership, it must go through the Infrastructure, Concession Regulatory Commission (ICRC), starting by establishing a consultancy firm transaction advisor to make a business case [and] to see whether it is a viable bankable project. And that has been done. It took, of course, about two years to do.
So, you must study the market in at least two cycles. That happened, the outline business case was produced, which looked very good, and it was approved by the ICRC. Then it was taken to the Federal Executive Council, [where it was] also approved. And then, before now, we went to [the] public to invite for tenders for bidders, which is the procurement process.
So, in that procurement process, [Nigeria Air] ended up having Ethiopian Airlines as a partner with 49%, and then 5% is the government of Nigeria, and 46% Nigerian entrepreneurs and companies coming together to own the rest. Now this would be the structure of the airline.[Nigeria Air] have applied for an ATL, the Air Transport License has been issued, and now they’re applying for an AOC. I believe that one week from today, [it] should be able to get the AOC issued or [within] two weeks maximum. And that will signal the beginning of the establishment of the carrier itself [which can then] begin flying.
So, the airline is on its way, and it will be soon. It will be launched within this quarter, it will be flying within this quarter, and it will give Nigeria the service that has been eluding it.
But we’ve been working for the last six years to establish [the airline] and we took this long because we want to be very diligent, cross the T’s [and] dot the I’s, create an airline that [will cater] to the size of Nigeria, to the economy of Nigeria, to the geography of Nigeria and to the people of Nigeria.
Is Nigeria Air looking at any widebody aircraft since it has such an ambitious fleet growth plan?
Certainly. When you’re starting up, you don’t start out with 100 routes in the business plan. If I read it very well, within the next three years or so the airline will begin to break even or make profit and then they would launch most of the routes domestically and go international. Suddenly, there’s going to be intercontinental flights. The market is there. British Airways or UK Airlines have 21 frequencies into Nigeria with nearly no competitors.
The UAE market, which is Dubai and Abu Dhabi, the London market, which is London Heathrow, the US market, which is JFK [John F. Kennedy International Airport] and the rest of America. Nigeria has open skies with the United States, which means that you can land anywhere in the US as many times as you can. Of course, the Far East, China, and Singapore, all those are routes that Nigeria Air is looking at.
While poised to supersede Nigeria Airways, which collapsed and was liquidated in 2003, Nigeria Air has faced opposition due to its ownership structure with Ethiopian Airlines, which holds a 49% stake in the airline.
A group of domestic airlines in Nigeria, namely Azman Air, Air Peace, Max Air, Topbrass Aviation and United Nigeria Airlines, sued the Nigerian Federal Government and Ethiopian Airlines in November 2022, stating that the partnership is anti-competitive. The airline also demanded an order of up to N2bn in damages for “wrongful exclusion” and the unlawful bidding and selection processes for the Nigeria Air project.
Is there an ecosystem in Nigeria where both Nigeria Airlines and the domestic airlines of Nigeria can compete competitively and coexist?
First and foremost, there is a misunderstanding of the whole thing. Nigeria is a company known to Nigerian laws. It is established like any other company. In the Corporate Affairs Commission of Nigeria, it is registered as Nigeria Air Limited, with Nigerian shareholders, just like any other airline in Nigeria. There is nothing wrong for a company in Nigeria, say Air Peace or Max Air or Ibom Air, to go out and look for partners from [elsewhere in] the world, like Avia Solutions Group, like Lufthansa Group, like Ethiopian Airlines, or Qatar Airways, to come and partner with them, and create an airline of their vision. There is no law in Nigeria that stops that. This company [Nigeria Air] was advertised for procurement publicly and followed all the rules to establish that, and people came forward to say “we want to invest”. And there’s no law on earth that says you cannot invest.
I also pray that the airlines in Nigeria, like Air Peace, Max Air and Azman Air, should go outside there in the world and get partners and bring their partner and create a brand as well. The market is big, 200 million people at the center of Africa with a GDP of 450 billion. So, I think it’s something that should be celebrated. I think Nigerian airlines should now begin to copy what Nigeria is trying to do [and] bring in an investor, be it Royal Air Maroc, Ethiopian Airlines, South African Airways, any airline, preferably Nigeria Airlines. Preferably [partnering with other] West African airlines or other African [airlines] before they go to the world.
But if you’re bringing an airline from Canada, or from Singapore to come and join Air Peace to create a brand that will serve Nigeria, that is what we, as government, are after. It is all about the service. Nigerian people should get the service they deserve.
An airline ticket today from Abuja to London is more expensive, almost twice that of Accra [in Ghana] to London, and Accra is further. Why? Because there’s no competition. Nigeria and Niger are next door neighbors with only a line in between them. But to go to Niamey from Abuja, you have to fly to Europe – Paris – and fly back. It is an hour and a half flight [directly to Niamey], but you have to do five hours either way [through Paris]. [That’s] about 12 hours of flying to go to Niamey.
If today we implement the Single African Air Transport Market (SAATM) under the AU Agenda 2063 with a robust airline like Nigeria Air, then you interconnect Africa. Then connectivity will be something smooth, efficient and fast. And then drive all of the benefits from it and increase the economies of Africa, keeping the wealth within Africa itself, to develop and grow.
So, I think those [airlines] that are in court should understand that they also have the same opportunity to go and bring investors into their own airline.
Still to come in our exclusive interview with Nigeria’s aviation minister.
Is Nigeria set to see 50 to 60 million passengers per annum within the next decade? Sirika certainly believes so.
Minister Hadi Abubakar Sirika explains why, alongside discussing the measures being put in place by the Nigerian government to prevent the buildup of unrepatriated airline ticket revenues, as well as investments being made into Nigeria’s aviation infrastructure and personnel training.
You can find out more by watching the full interview with Nigeria’s aviation minister.