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Foreign Investors Ready to Deploy N200 Billion For National Carrier Initiative

By on October 7, 2012

Nigerian Airways

The Ministry of Aviation is working towards setting up a new air national carrier and foreign investors have expressed interest to deploy N200 billion in equity funding to realize the project.

The investors who are three foreign airlines have had series of meetings with the Presidency, the Bureau of Public Enterprises (BPE), Aviation ministry officials, and the Central Bank of Nigeria (CBN).

Speaking on the development, the Special Adviser (Media) to the Minister of Aviation, Joe Obi, said, “government will not play any role in its (the national carrier’s) ownership and control; it will be owned by Nigerians through IPO, although the template of that is still being worked on.”

Obi also said: “We have completed the framework of the character of the proposed national carrier; the legal framework is also being worked out. The framework will take care of ownership structure, funding and other issues. We are waiting for approval from the Presidency. Once approval is given, we will unveil the framework.  Then people will know the criteria that airline must meet to be a national carrier. I am sure the legal framework will be finalised soon.

“Those who are interested in bidding will have opportunity to study the guidelines. Every airline, both old and new ones, will have opportunity to bid; we are not ruling out anyone. If you fulfill the criteria, you could be designated as a national carrier.

“It is going to be fully private owned. The government is not putting a kobo into it. What government is doing is come up with a framework and create an enabling environment for the take off of the carrier that will be privately owned.

“Once you are designated as a national carrier, you automatically have some benefits. There is no airline that will not be interested in being designated as national carrier because of the benefits that are attached. The name alone is a huge incentive. There are other benefits; for instance, there is lots of Bilateral Air Service Agreements (BASA) that are not being ultilised. There are airlines flying from UAE to Nigeria whereas there is no reciprocal response from the country. Once there is a national carrier that is robust, efficient and operated professionally, we will begin to utilise our frequencies to other countries in line with BASA. The incentives are good enough; so you don’t need government’s funding to fly the country’s flag.”

Speaking on the chances of Arik Air being designated with national carrier status, Obi said, “Arik might have been informally considered a national carrier but this one will be officially designated. That makes the difference. Flying Nigeria’s flag as a national carrier will earn the airline more respect and opportunities than what Arik has been enjoying. Arik is eligible to vie like every other. If Arik has been doing all the jobs for us, when it puts in application and is considered to meet the criteria, it could emerge a national carrier. The process is opened to every operator.

“Once the framework gets approval from the Presidency, every other process will be fast tracked. The important thing is that the groundwork has been completed.  By first or second quarter of 2013, we should begin to see the character of the national carrier.”