Updated: Aug 25, 2018
On Wednesday, July 18, 2018, at the Farnborough International Air show in the United Kingdom, Minister of State for Aviation, Hadi Sirika, proudly announced that Nigeria Airways will be making a return to the skies as Nigeria Air.
This development comes nearly 15 years after the previous state-run airline, Nigerian Airways, collapsed and subsequently ceased operations. The announcement of Nigerian Air was welcomed with mixed reactions from various Nigerian stakeholders. Many expressed excitement, while majority remained skeptical as to whether the airline will come alive due to various unfulfilled promises as well as the incomprehensible level of corruption that has strangled the aviation sector of the economy for many years.
If you ask anyone who had the privilege of witnessing the glory days of Nigeria Airways, you will be able to see the pride in their eyes as they reminisce on the “good old days”. The flight crew wore their distinct green uniforms proudly and conveyed confidence as they walked into any airport in the world.
Nigeria Airways was once the pride of Nigeria – Our very own eagle in the skies.
Nigeria Airways - The pride of a Nation
The story of Nigeria Airways is a really sad one. The worst part of all this is that those who killed the airline are still wallowing in riches today, while ex-staff of the airline are roaming the streets in perpetual penury.
The airline was once described as 'Africa's fastest growing airline' in its heyday. It was home to outstanding pilots including the likes of Bob Hayes, Samuel Obioma, Joe Ibrahim, Bara Allwell-Brown, Rufus Orimoloye, Dele Ore, Don Chukwura, Paul Tahal, Bob Adegbulugbe and so many others.
Nigeria Airways was founded in 1958 after the dissolution of West African Airways Corporation (WAAC). The Nigerian Government initially owned 51% of its shares until 1961 when it eventually bought off the remaining 49%, making the airline the country’s flag carrier and National airline.
In the mid 70s, Nigeria Airways boasted of a workforce 2,400 strong and a robust fleet of state-of-the art aircraft flying to numerous domestic and international destinations such as Abidjan, Amsterdam, Accra, Bathurst, Beirut, Brussels, Dakar, Douala, Frankfurt, Freetown, London, Madrid, Monrovia, New York, Paris and Rome. The collapse of Nigeria Airways
So how did a Government-owned airline company with so much prospect eventually go bust in 2003?? The answer lies in that question: “Government-owned”.
You see, the Nigerian government has a special way of running businesses. In all sectors of Government owned businesses, the issue of mismanagement is a constant. In the case of Nigeria Airways, the Government officials saw the airline as a cash-cow and a gateway to an undeserved luxurious lifestyle. Business class seats were reserved for Government officials and their cronies, girlfriends and families — most of whom flew free of charge.
The climax of the sad Nigeria Airways story, as narrated by a passenger, was in May 2002. A New York-Lagos flight was delayed for 24 hours because the airline couldn’t pay for fuel. Passengers had to contribute to fuel the aircraft. One passenger gave a loan of $5,000 to the airline. It turned out to be the last flight.
Over the years, aviation and business analysts have attributed the collapse of Nigeria Airways to three main factors.
The first, corruption – which played a significant role in the decline of Nigeria Airways. In spite of an investment of US$200 million into the airline, attempts at resuscitating the airline failed due to the high level of looting that was taking place. According to reports, about $400 million spent between 1983 and 1999 could not be accounted for. $400 million!!. As usual, the Government launched an “investigation” and the rest…they say is history.
The second, the Nigerian disease of mismanagement. In 1987, Nigeria Airways was suspended by the International Air Transport Association (IATA) over accumulated debts of US$1.1 million. This suspension meant the airline could not issue tickets to fly on other IATA member airlines and the converse. From then, its aircraft were either impounded or detained due to debt. A poor attempt to increase the airline’s revenues by increasing its domestic fares by 100% and its international fares by 20% led to a significant reduction in passengers.
And finally the third, the issue of “overstaffing”. As a result of poor management, the airline had more staff than was necessary for its operations and this led to a large payroll that was eating deep into its finances. For example, in 1986, the airline had 8,500 (which is 500 staff managing one aircraft), a number that was double the international average. The management eventually carried out a massive downsizing of staff, but the damage was already done.
The collapse of Nigeria Airways in 2003 left a big void in the aviation sector of the Nigeria’s economy. This gave foreign airlines opportunities to explore the investment potential in the country. Till this very day, the absence of national flag carrier in the country is still affecting various sectors of the economy.
Other national airlines that have gone into extinction
Following the collapse of Nigeria Airways, a few other national and proposed carriers have also gone into extinction.
Air Nigeria – Virgin Nigeria
Air Nigeria was the national flag carrier of Nigeria which operated scheduled regional and domestic passenger services. The airline replaced the defunct Nigeria Airways and was founded in 2004 as a joint venture between Nigerian investors (Jimoh Ibrahim and others) and the Virgin Group. Virgin withdrew from the business during 2008-2010. It was grounded in June 2012 and ceased operations on 10 September 2012.
The Federal Government commissioned an aircraft but didn’t fly and had to take the aircraft back. Founded on September 17, 2009 and ceased operations from June 2, 2010.
Former President Goodluck Jonathan unveiled Nigeria One Airline on the 53rd anniversary of Nigeria's independence in 2013. It was stated that it will start by the end of 2013 by the Federal Government but the dream never came to past.
Nigeria Air – The Promise
A little while back, I remember sitting at the Virgin Atlantic clubhouse at London Heathrow, staring out the window, immersed in my thoughts, trying to imagine what it would feel like to see a pretty Airbus A330 (my personal favourite) painted in Nigerian colours sitting on the tarmac.
When Senator Hadi Sirika unveiled the name and logo of Nigeria Air, I didn’t quite know how to feel. For decades, the Nigerian government has satisfactorily shown that it cannot run any business professionally, so why get excited?? I thought to myself.
However, two quotes from Senator Hadi Sirika caught my attention, and led me to receive the new development with more optimism.
"The Nigerian Government will not own more than 5% (maximum) of the new National flag Carrier. The government will not be involved in running it or deciding who runs it,"
"I'm very pleased to tell you that we are finally on track to launching a new national flag carrier for our country: Nigeria Air,"
For beginners, let me explain what these two quotes imply for Nigeria Air.
The plan is for Nigeria Air to operate under a privately managed Public-Private Partnership (PPP) – Nigerian Government will own a maximum of 5% shares in the airline, while private investors will own the remaining 95%. The fact that the Government will not be involved in the running of the airline is a HUGE sigh of relief, but to what extent can they really be prevented from interfering with the management of the airline? Already, Government officials are already making big decisions concerning the airline’s affairs, such as selecting flight routes and aircraft bargaining with aircraft manufacturers - Boeing and Airbus.
It is also very important to understand that the plan is for Nigeria Air to be the country’s “National flag carrier” and not a “National airline”. This simply means that the airline will fly the country’s flag and get preferential treatment in international operations while not necessarily being Government-owned. A national airline on the other hand is completely owned by the Government – just like the defunct Nigeria Airways. For example, you may have thought that British Airways was owned by the British Government right? British Airways is the UK flag carrier but it is not owned by the British government – it is owned by a majority of private investors.
I feel with the PPP arrangement, the Government’s involvement will do more good than harm in the case of Nigeria Air. Why do I think so?
The Government will provide solid start-up capital which means Nigeria Air can be assured to have brand new state-of-the-art aircraft. With investment in brand new aircraft, Nigeria Air will benefit from reduced operational costs on aircraft maintenance and a better safety record is almost guaranteed.
Also, If the airline runs well, the Government will be reaping dividends rather than exhausting subventions. So it’s more of a Win-Lose situation this time around compared to the Win-Win situation the Government faced when dealing with Nigeria Airways – they didn’t have to face the consequences of their actions.
However, before we get too carried away, eliminating the Government’s involvement in the Nigeria Air’s management does not mean that the airline is completely free from potential problems.
There is still a big chance of the airline’s management falling into the hands of inexperienced and clueless “wealthy” investors who have no idea on how the airline business is run. To better understand this, just take a look at Nigeria’s portfolio of failed privately owned commercial airlines. To further illustrate the gravity of the Nigerian disease of mismanagement, Nigeria Airways was profitable when it was managed by KLM. Nigerians took over in the 1980s and everything came crashing down! Coincidence? I think not.
The success of Nigeria Air will greatly depend on the quality of management. I really hope the Federal Government has learnt a lot of lessons from the experience of the defunct Nigeria Airways, and are now determined not to repeat the mistakes that led to its demise.
Nigeria’s aviation sector has remained crippled for several years and this has greatly stunted our growth as a nation. Nigeria Air’s launch has the ability of providing numerous economic benefits for Nigeria. The Hospitality and Tourism sector especially will be a huge beneficiary of Nigeria Air’s launch. The availability of direct flights from various countries around the world would boost tourist as well as business traffic into the country. This will generate greater revenue for the country.
I must also commend Senator Hadi Sirika for his passion and efforts towards reviving Nigeria’s aviation sector. It is important we all contribute to a “Better Nigeria” in any way we can.
That's why at Africlaim, we are contributing to the development of the Nigerian aviation sector by making it our mission to help air passengers all around Nigeria understand and enforce their rights to flight delay compensation.
“Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence” – Hellen Keller.
In the case of Nigeria Air, I definitely still have my reservations, but I am filled with hope and confidence that our “Eagle will finally learn to fly again”.
Please feel free to share your thoughts on this topic in the comments section below!