Business: National Carrier to Begin Operations with 50 Aircraft

The federal government and its private investor partners may have concluded that the new national carrier, known as Nigeria One, would start operation with 50 aircraft that would be delivered before the end of next year.

Among the aircraft types that would be operated by the national airline include Embraer, Bombardier and Boeing.


THISDAY gathered from authoritative sources on Wednesday that while Embraer short haul aircraft types would be used for domestic operations, medium haul Bombardier would be used for regional services and Boeing planes would be used for long haul international flights.
All these aircraft would be delivered from the manufacturers, but it is not known yet whether they would be leased or they would be acquired by outright purchase.

As government is planning on how to establish the airline, it is also brainstorming on route development and THISDAY learnt that right now the body set out to establish the airline is meeting with some airlines for possible code share and other partnership with the future airlines, and in recognition of this the federal government is streamlining its bilateral service agreements with individual countries, aware that it would soon have its national carrier.

As the Ministry of Aviation has reiterated, the federal government does not intend and will not fund the establishment of the airline as it has designed an arrangement where the airline would be funded on public private partnership (PPP).

The private sector will drive the airline while government intends to own less than 25 per cent equity while significant percentage of the equity would be sold to the core investor, which is an international carrier, that will also influence the establishment of a maintenance, repair and overhaul (MRO facility) that would be completed shortly after the take-off of the national carrier.

THISDAY learnt that an international carrier from the Middle East has indicated interest to partner the airlines and an international business tycoon may put his money in the airline as a significant investor.

In spite of the bleak history of airline operation in Nigeria and the failed Virgin Atlantic and Virgin Nigeria partnership, the plan to attract foreign investors for the new national carrier attracted surprising enthusiasm from overseas.

This is attributed to the burgeoning air transport market in Nigeria, which an insider from one of the major airlines said would explode when effective and consistent competition crashed the fares to domestic destinations, “which a successful national carrier will do.”

The source told THISDAY, “We have concluded plans to acquire 50 aircraft. Yes, it is good to start small but we don’t want to do that; we want to hit the ground running because we know the market is there. I know that it will surprise you to know that an international airline from the Middle East has invested in the national carrier together with other rich investors from outside Nigeria. Our strategy is that it will be operated on PPP. FG is not investing any money but will not have many shares.”

On how organisations and individuals are investing in the new airline, the source said, “What we are doing is that we are selling shares on paper until the company is incorporated and the shares are being sold in percentages. After buying the shares you will then know the authorised shares.”

Many Nigerians are sceptical about the planned national carrier; very few are giving it the chance to succeed due to hind sight, including the parlous history of Nigerian Airways, but the source told THISDAY that such cynicism was to be expected because “It is a typical Nigerian attitude because of the people that ran organisations aground in the past. They lacked expertise and they did not want to seek expertise. They were not really sincere but this one is different.”