Guest Columnist BY LAWSON OMOKHODION

The recent statement by Aviation and Aerospace Development Minister, Festus Keyamo, that the Nigerian government was not ready to spend a ‘dime’ on a state sponsored national flag carrier is an unfortunate anti-climax. What the aviation community expected was an announcement on when the Air Nigeria project would commence operation. The minister may therefore have clearly misunderstood the mandate he was given in 2023 on the federal government interest in a national carrier, when he assumed duty as a minister. To the Nigerian public, his assignment was clearly to review where Alhaji Hadi Sirika, the aviation minister under former president Muhammadu Buhari, went wrong in the implementation of the project for a rebirth of a national airline and ensure that a proper groundwork was laid to achieve the desired outcome.

The minister had spent two years traveling round the world, visiting foreign airlines in their metropolitan capitals and dining with aircraft manufacturers in Air Bus of France, Embraer of Canada, and Boeing in the United States, and the rich lessons he gathered from these trips were meant to make the Air Nigeria project feasible. Added to these trips was the fact that Festus Keyamo was part of the cabinet of former president Buhari where the initial presidential approval to establish the airline was given.

To now relegate the idea of a national carrier with Nigerian government participation to the status of non-starter is perplexing. As every watcher of the Nigerian aviation sector knows, the foreign airlines are always very uncomfortable when the idea of a Nigerian national flag carrier is mentioned, and they fear the stiff competition they would face with the operation of such a formidable airline. It is very possible that these foreign airlines may have mounted pressure on officials of the aviation ministry to kill the Air Nigeria project so that their market share is not disturbed by a new Nigerian flag carrier.

In summary, Keyamo’s statement on the national flag carrier is not a proper understanding of what Nigerians desire and it overlooks the huge opportunities available to such a flag carrier. Keyamo should know that he is one of a few of President Tinubu’s ministers, Nigerians look up to raise the profile of Nigeria in ministries they manage. A good look into the future of a Nigerian flag carrier, will show the tremendous benefits the Nigerian aviation sector will reap form such a carrier. To miss such an opportunity at this time of President Tinubu’s renewed hope agenda, will be akin to paradise lost.

The operation of a flag carrier with the ownership interest of a national government has been the vehicle used by several countries to achieve dominance and sustenance in the aviation industry. Nigeria realized this early in its march to nationhood when on August 23, 1958, Nigeria Airways was founded and began full operations on October 1, 1958. However, ex-President Olusegun Obasanjo hastily liquidated the airline in the year 2003 because he was overwhelmed by the management challenges confronting the airline which could easily have been addressed by a restructuring, recapitalization, and the possible dilution of government ownership interest, for the emergence of a better performing airline. Former president Obasanjo is always a military man in a hurry. Recently, the Indian Prime Minister, Narendra Modi, openly declared that its aviation industry was a strategic part of its national economic transformation agenda. India has a population of 1.438 billion people, and its national flag carrier is Air India, which was established by the Tata Group of India in 1935 and goes on domestic and international operations. The Indian government acquired a 40% stake in the airline in 1945 and thereafter it became India’s national flag carrier. In 2022, after 77 years of state participation, Air India was privatized, and it is now owned by the Tata Group and Malaysian airlines, and it continues to function as the country’s flag carrier. Despite the recent crash of Air India’s Boeing 787, the airline continues to thrive. Similarly, IndiGo airline, is India’s largest airline by market share, privately owned, and began operations in August 2006. IndiGo has a fleet of 437 aircraft, operates domestic/international flights and has approximately 37,200 employees. Many other airlines operate in India, but these two airlines constitute India’s flag carriers. 

China has a population of 1.416 billion people and its three major airlines – Air China, China Eastern Airlines and China Southern Airlines are the most prominent of the many governments’ owned airlines. These three airlines constitute the Chinese national flag carriers, and all three airlines fly both domestic and international routes, projecting the strength and image of the government and people of China. There are many also privately owned airlines in China. The government owned Ethiopian airlines began operations in 1946, and it is one of the highly efficient airlines in the world, with a reputable, and unfettered management, dependable, significant, strategic and robust. When Ethiopian air flies into a country, the reputation of the country and people of Ethiopia go with it. It is a shame, that Nigeria, a country of over 200 million people, continues to depend on foreign airlines to fly its people and government officials to other countries of the world both for business and while on vacation. But what does a flag carrier do? A flag carrier makes access possible to the various categories of flight ticket prices in each of the three classes – First, Business and Economy, for its home passengers. Nigerians currently get this advantage from Air Peace on its Lagos/London/Lagos route. But not on the other airlines where only the expensive tickets are sold to Nigerians. Even now, Nigerians fly to Accra, Ghana, to buy cheaper tickets and board other foreign airlines from there. A flag carrier opens a country for easy accessibility. With a flag carrier tourism is boosted because anyone flying into the country knows that the national airline will be available to take them in and out. A national flag carrier embodies the reputation of its country and so the many countries into which it flies accord that carrier adequate recognition. A national flag carrier can acquire aircraft more easily, leases aircraft more easily, accesses both local and foreign funding much more easily and attracts specialized skills, more easily. A flag carrier is a major contributor to job creation as by its operation it creates direct and indirect jobs in their thousands. The story of British Airways is one that Minister Festus Keyamo may find interesting. It did not start in its present form. It was only privatized in 1987 by the government of former Prime Minister Margaret Thatcher.

The British Airways was formed in 1974 through the merger of an airline which was known in the 1950s and 1960s, as British Overseas Airways Corporation (BOAC) and British European Airways (BEA), an airline that covered European cities only. Two smaller airlines, Cambrian Airways and Northeast Airlines, were part of the merger arrangement. This merger established the United Kingdom’s national flag carrier, the British Airways, and was fully owned by the UK government. British Airways unified the Uk’s aviation operations under one carrier, and it has maximized the strategic benefits that laid in wait for it. Today, British Airways is one of the biggest 20 airlines the world over, with over 35,000 employees and a fleet size of 285 aircraft and operates 509 daily flights worldwide and 43 daily flights to the United States alone. Any tourist or business visitor traveling to the UK thinks first of British Airways but if the country has a national flag carrier, an alternative is then possible. In 1984, the British government licensed a second but privately owned flag carrier, Virgin Atlantic International, which has 8,000 employees, flies to 35 destinations across five continents plus over 300 partnership connections. Several other national governments have spent money creating their airlines or in propping them up. Air France, KLM, Lufthansa, Emirates, Qatar airways, South African Airways, Turkish Airlines, Korean Air, Russian national flag carrier – Aeroflot, Air Canada, Air Algeria, Royal Air Maroc, Rwandair, Cathay Pacific, and several others have significant government interests.

The statement by Keyamo that Nigeria is not willing to spend a ‘dime’ on a national flag carrier is not encouraging. The previous APC government approved its equity participation in such an airline and on assumption of office, President Bola Tinubu must have been agreeable to creating one after the botched attempt by Hadi Sirika’s ministry and so mandated the aviation minister to work out its desirability. The action Keyamo ought to have taken was to squeeze Sirika to account for the funds that may have been improperly deployed, dismiss the aviation ministry personnel used to defraud Nigeria via a ‘rented’ Ethiopian airline aircraft paraded as a Nigerian aircraft, sanction Ethiopia airline for allowing itself to be used to defraud fellow investors on the Air Nigeria deal, and design a proper structure for a thriving national flag carrier. The current myopic school of thought, led by the World Bank and IMF, that public enterprises or government owned companies should be demonized in Africa has led Nigeria astray since 1986. This school of thought is poised to keep African personnel jobless at home by criminalizing public enterprises. Yet countries in Europe and Asia have used public enterprises to develop themselves, empower their people, and used such enterprises to provide the wherewithal needed by their people. Such excellent results can also be achieved in African public enterprises by penalizing impunity in public enterprises, deploying standard management practices in the operations, employing skilled personnel, punishing infractions, and rewarding efficiency. By implementing world class standards in managing such public enterprises we simply expose the lie behind the lazy World Bank concept that ‘government has no business in business’. By adopting the current world bank frame of mind, millions of trained Nigerian personnel have emigrated after remaining jobless or underpaid for several years because the jobs that should have been created by federal, state and local governments are not created and the private sector that is poorly capitalized, shallow, self-serving and narrow cannot also create them. Many important sectors that government agencies would need to intervene in are neglected despite the constitutional provisions permitting state enterprises to participate in economic and production activities. In that way, the economy has been left empty and hollow. Anyway, the argument here is that the strength of a national government is needed to raise the profile of a flag carrier.

In world aviation history, only the United States of America has relied exclusively on the private sector to build its aviation sector. Such gigantic airlines as Delta Air, United, Southwest airlines, American Airlines, and former PANAM were all created by private enterprise. But these privately owned airlines continue to receive myriads of incentives from the US government that encourage them to fly to underserved communities and get state subsidies to cushion inflationary pressures on their global operations. In today’s world, the barriers to entry into the aviation industry have escalated and cost has become exponential. These barriers account for why private airlines, going alone, cannot achieve significant success in developing scale economies. To give a new flag carrier a boost, a national government can invest minimally in such an airline, and make provisions for an exit corridor, whereby after a period of 10, 20, 30 years or more, the government can publicly sell off its shareholding and exit the investment. The Nigerian privately owned Air Peace which was founded in 2014, has remained small despite the efficiency of its management and the prudence of its owner. Air Peace is the largest airline in Nigeria, a staff strength of 2,300, fleet of 30 aircraft and has huge capacity constraints. An airline without adequate capacity is operationally weak. Other Nigerian private airlines like Arik, Aero, Dana, Ibom Air, Max Air, Green Africa, United Nigeria etc. tremble in the face of competition. Ibom Air is a small Akwa Ibom state government-owned airline. The lack of capacity in the Nigerian aviation industry has created an oligopolistic market situation where participants collude to fix prices and sometimes malpractices become commonplace. That is why passengers pay excessively high prices, particularly now, with a much-devalued currency, to fly in Nigeria and yet flights are routinely delayed, canceled and are unavailable to several destinations due to capacity constraints. The problem of capacity locally in Nigeria is immense and the absence of a national flag carrier with domestic and international operations exacerbates the challenge. 

Capacity is a competitive feature of airlines. The bigger the capacity, the more routes the airline can cover. If Nigeria Airways had survived the 2003 guillotines, things would have been different. A Nigerian flag carrier with government interest can amass capacity quickly because with several flights within Nigeria and to strategic African countries, USA, UK and EU in one day and many more to Asian, Middle Eastern and Latin American countries will give it an edge. Population is on the side of a Nigerian flag carrier; business executives are always in the air and students fly often too. Robust airlines have huge fleet sizes and a world of employees. Delta Air has 985 aircraft and about 101,000 employees. American Airlines has 991 planes and 132,000 staff. Ethiopian airline has a fleet size of 156 and employee strength of 25,000. China Southern airline has 98,000 staff and 862 aircraft while China Eastern airline has 800 operating aircraft and 81,780 employees. Emirates airline has a fleet size of 269 and employees total of over 120,000, Qatar airline has 233 aircraft and staff of 55,000, Etihad has 97 aircraft and 53,000 employees.  Many African countries have keyed into the aviation sector for jobs and tourism earnings. These airlines may be small now but would grow. Royal Air Maroc with 56 aircraft, employs 6,000 staff and covers 90 destinations of which 56 are international. Kenya Airways employs over 5,900 staff, with 35 aircraft and serves 54 destinations of which 44 are international. TAAG Air Angola is the national flag carrier of a fellow oil rich country, state owned, founded in 1938 as DTA, renamed TAAG in 1973, has 26 aircraft with three more Boeing 787 expected, with over 5,700 employees and flies to several Angolan cities and 15 African, Latin American and European cities, including London. Following its restructuring, South African Airways, previously fully state-owned now has government minority stake, remains the flag carrier of South Africa, operates a fleet of 20 aircraft, flies into several local, regional and international destinations with staff strength of over 2000 employees. Air Nigeria can muster 100 aircraft, be corruption free like the Nigeria Liquified Natural Gas company (NLNG), can create over 10,000 jobs, all in five years, with very skilled Nigerian managers to draw from.

Nigeria needs an opportunity to develop its aviation sector, create jobs, fly its citizens to more cities in and out of the country, generate local and foreign earnings and grow its fleet. Nigerians need jobs, good paying jobs. Setting up a national flag carrier will be a low hanging fruit for President Tinubu’s government. All the preliminaries have been put in place for the Nigerian flag carrier by the previous APC government and government is a continuum. Keyamo should return to the drawing board, correct the blueprint by Hadi Sirika, adopt the NLNG ownership/shareholding model, if necessary, by getting more than one strategic investor, and then seek a private audience with the president to table the proposal once again before him. Any combination of diverse ownership interests with government participation, a strong board and effective management with a watchful EFCC and ICPC can very well serve such a new airline.  As things stand, Minister Keyamo needs to finish his assignment by presenting the proper arguments before the president to enable him to approve the creation of Air Nigeria and write his name in gold. Air Peace and Air Nigeria can gladly serve as Nigeria’s flag carriers, an adequate response to the aviation world.

•Chief Omokhodion, KSM, was Pro-Chancellor/Chairman, Governing Council, Ambrose Alli University, Ekpoma.