Due to investors' lack of interest, Nigeria Air missed its sixth takeoff.
Nigerian concerns Air consumes N14.6 billion in four years with only 5% government equity. After seven years, the industry is still waiting for Sirika's aviation strategy to be delivered. Interested parties and consultants disagree on the prospects for a new airline.
With reputable investors and technical partners purportedly hesitating to warm up to the high-end company, Nigeria's attempt to launch a new national carrier appears to have entered the incorrect time zone.
After the bid process is over, a new setback for the July 2022 launch has emerged. It also delays efforts to stabilize the airline before this administration's exit. The vital takeoff of the national project was aborted for the fifth time.
The hard sell, might be related to local peculiarities, such as political unpredictability in an election year, the state of the global economy, and the project setup, which has already sucked in over N14.6 billion from a government that owns only 5% of the airline.
Industry stakeholders are not enthused by the continued "hawking" of a new airline or other components of the 2016-launched aviation growth roadmap. Nine months before the administration's end, none of the five components has been provided.
Despite the project consultants' optimism over the new market, some insist that attention be directed toward urgent existential problems that are endangering the entire industry.
Recall that President Muhammadu Buhari pledged to launch a new national airline during the 2015 election campaign to replace Nigeria Airways, which was hastily shut down in 2004.
Hadi Sirika, the aviation minister, unveiled the Aviation Roadmap development program in 2016 in an effort to reform the industry. Priorities of the plan were the creation of a new national carrier, the efficient concession of all airports, leasing organizations for aircraft, maintenance facilities, and aerotropolis development.
The Nigeria Air was slated to launch in December 2018 after being christened in front of an investor audience at the Farnborough Airshow in London in July. The Federal Executive Council was compelled to put it on hold indefinitely due to domestic criticism and a lack of budgetary support.
The Aviation Road Map agenda would be carried out in 2021, with the national carrier component receiving precedence, the minister stated before the Senate Committee on Aviation during a budget defense session in October 2020.
Following an FEC meeting on November 23, 2021, Sirika declared that the airline would now launch in April 2022. While bragging about the possibility of partnering with airlines like Turkish Air, Qatar, and Ethiopian Airways, ministry representatives also made references to a first-quarter launch date.
However, the minister reiterated at the start of the bidding process in March 2022 that the Federal Government would possess a 5% stake in the airline, while the general public will own 46% and the international partner airlines acquire 49% shares.
I think we should be able to have our AOC ready by April 2022, which would indicate that we are prepared to begin. And after we have the AOC, have secured the offices, formed the interim board, and have them execute the contract, we will reveal who they are.
The take-off date was once again moved to July 2022 as a result of the bidding being prolonged by one month "at the request of bidders." The airline has yet to depart.
The bid evaluation and interest verification processes had been finished, according to sources within the ministry, and the winners will shortly be notified.
We have bidders, though perhaps not the major international firms that one might have anticipated for this kind of initiative. Nigeria is a sizable market at any time of day. But one can grasp the current world condition. To provide Nigeria with an airline that is appropriate, the managers will work with what they have. Rushing through the procedure is preferable to delaying and doing things well, a senior official said.
Despite the erroneous starts, the project has continued to receive funding from 2019 to 2022, which has now totaled N14.65 billion. N6.25 billion, or around 40% of the total, has gone for working capital, consulting expenses, and transaction adviser fees.
Working capital in the 2020 budget was N4.6 billion, and it increased by N1 billion in the 2021 allotment.
The airline received N400 million from the 2022 budget, with an additional N150 million for consulting fees.
The airline was given priority in the N27 billion aviation bailout money to lessen the terrible impact of the epidemic on businesses, despite neither existing before nor during the outbreak.
Another source suggested that the government's meager 5% ownership in the carrier as it prepared to go public before bringing in partners may be to blame for the apathy.
They appear to be putting the horse before the wagon. Why are you still looking for partners if you already have such strong votes and a ready design? Additionally, prospective partners can observe that the government rarely upholds agreements in this country as it nears a period of transition. I have already heard some presidential candidates criticizing the new national carrier idea. Any serious investor should take that as a caveat emptor warning signal, the source claimed.
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