New national airline is a terrible idea.

 Punch Editorial.

IN response to the crisis in Nigeria’s aviation sector, the Federal Government is, as usual, preparing to compound the problem. The announcement by President Goodluck Jonathan that a new national airline will soon be set up featuring “substantial public ownership” is a wrong move that is doomed to fail. The policy is better consigned to the scrap heap. What the industry requires are massive private investment and an enabling environment that will attract local and foreign investors.

Some promoters of the dubious N985 billion project envisage that it will generate about 19, 500 jobs from direct and supportive industries. The proposed national flag carrier, the sponsors state, will commence flight operations with 48 airplanes and will introduce an aeronautic industrial section 12 months after it commences operations. To be christened “Nigeria Airlines,” the proposed carrier, the group claims, will be funded with loans from the Federal Government but will not be managed by civil servants under the civil service structure, but by professionals.

It is understandable that the government is concerned over the sorry state of aviation here, especially the absence of a world-class airline. From a once robust and growing domestic sector that boasted a national carrier, that, at its peak, had 32 aircraft. Today, 10 private airlines are active and only three are cleared for international flights. This is not good enough for a country of 167 million people that established its first national carrier in 1958, two years before flag independence. While some other African countries have grown their globally competitive national carriers, Nigeria Airways, after decades of distress, was liquidated in 2004. Nigeria’s place in the global aviation industry is nothing to write home about.

There is surely an urgent need to create at least one international airline brand like the Ethiopian Airlines that is billed as one of the few successful carriers in sub-Saharan Africa, plying 62 international and 16 domestic routes and is one of the fastest growing airlines in the world. According to a recent document released by the Aviation Minister, Stella Oduah, about N300 billion is remitted abroad annually by our domestic aviation sector while only N15 billion is realised by our domestic airlines, aeronautical authorities and associated domestic service providers.

Among policymakers and other stakeholders, it also rankles that our airlines are not able to fully benefit from the Bilateral Air Services Agreements that Nigeria enters into with other countries that provide landing and take-off slots in each other’s busiest airports to be used by airlines designated as national carriers. Recent aircraft safety and noise pollution standards imposed by North American and European countries effectively limit or shut out our under-capitalised Nigerian carriers that still ply international routes from some of the world’s most lucrative commercial air transport routes.

Every bit of the proposal rings hollow. Oduah, Jonathan and those veterans afflicted with nostalgia for the halcyon days of Nigeria Airways are getting it wrong in pushing for another state-owned or state-promoted carrier. Nigeria’s corporate history is strewn with the rotting carcasses of state-owned firms straddling every major sector of the economy. Textile firms, banks, insurance companies, transport firms, newspapers and even monopolies such as the Nigerian Telecommunications Plc, Power Holding Company of Nigeria and our four dilapidated refineries have also failed or are failing. Nigerian governments’ performance in running commercial ventures has set world records in corruption, inefficiency and waste.

There are many other good reasons to be concerned about the retrograde step. Nothing typifies this than the horrendous experience of the taxpayer in the hands of the defunct Nigeria Airways. From the early 1980s, the airline became a byword for corruption and incompetence. The airline failed, according to former President, Olusegun Obasanjo, who eventually liquidated it, due to excessive corruption by successive boards. “I discovered that the board was corrupt…The board will form a company in Jersey Island, USA, and give repair contract to that company…that was how they embezzled funds and ran it down.” The mismanagement led to debts of over $60m by the time it was shut down with just a single, debt-inducing aircraft left in a once vibrant fleet of over 30. The whole project looks like a grand design by some corrupt officials to defraud the government.

The proven inability of our government to run or even part-own an airline is obvious. Successive technical agreements with KLM, the Dutch national carrier, and Britain’s Virgin Atlantic have come to grief. An incensed Richard Branson, flamboyant Chairman of Virgin, labelled Nigerian officials “dream killers” in reference to the collapse of his vision to invest about $600 million in the Nigerian venture.

We must return to basics. The government should quickly drop the bad idea of establishing a national carrier. It won’t work. We have neither the discipline of the Ethiopians nor the vision of the Kenyans whose acclaimed privatisation of Kenya Airways has made it one of more successful African carriers. We should rather address the problems of our ailing airlines that include limited access to funds, high indebtedness, high operational cost, poor regulatory framework and poor management. The government should streamline and improve the administration of funds already made available for airlines by the Central Bank of Nigeria and a federal funding support programme. The inefficient and corrupt airline regulatory and airspace management agencies should be overhauled and made to be professionally run with zero-tolerance for graft. The government should provide support for the building of private aircraft hangar to reduce the cost of taking an aircraft abroad for basic routine repairs.

Successfully transforming the aviation sector and having world-class carriers will come only through reforms in regulation, slaying the dragon of corruption and privatising the airports as European countries have done.