Ethiopian Airlines favoured as partner to new national carrier

The Federal Government is tilting towards  Ethiopian Airlines as technical partner to Nigeria’s proposed national carrier.

Others on the shortlist are South African Airways and German airline, Lufthansa.

Sources close to the Aviation Ministry told BusinessDay that Ethiopian Airlines currently has an edge in the considerations so far.

Technical partnership typically covers training, maintenance and resource pooling, among others.

BusinessDay gathered discuss with  governments consultans tend to favour Ethiopian Airlines, based on the modalities to be adopted in setting up a national carrier that would be accepted by Nigerians.

“I can tell you that a proposal has been submitted to the Federal Government to that effect and government is studying it. I believe Ethiopian Airlines has all it takes to be a partner to the carrier.

“It has the structure, maintenance pool and all the technical requirements that a start up would need to buy”, a source said.

BusinessDay gathered that government was planning to  use $1billion as initial funding for the floating of the new airline, while another $1b would be spent within the next four years to rebuild old airport terminals and construct new ones across the country.

The source said if this deal sails through,  it would help to retain huge funds that are taken away from the country through foreign airlines, as Nigeria would have a carrier that would reciprocate most the frequencies that the foreign airlines operate.

Currently, Arik Air is the only Nigerian airline that flies to the United Kingdom, USA, United Arabs Emirates and South Africa, with only one frequency each, while over 30 foreign airlines operate a large number of frequencies to Nigeria.

“It is not normal for only Arik Air to compete with these mega European carriers, we have lost a lot as a country to the fact that we lack the capacity to compete with them.

“When Nigeria Airways was in operation, we were still able to save some money but that may change, if government is ready to take the bull by the horns this time”, he said.

Flights from Europe to Lagos, the biggest city in Africa, and a hub for the wealthy Gulf of Guinea oil industry, are among the most profitable in global air travel and are mostly  overbooked.

Usman Mukhtar,   director-general of the Nigeria Civil Aviation Authority (NCAA) had recently disclosed that foreign airlines made N231 billion in ticket sales in 2013, while domestic airlines made N73 billion in the same year.

Mukhtar said the foreign airlines airlifted 1.4 million passengers with 73,000 frequencies while   domestic airlines operated a total of 63,000 frequencies across the country, with five million passengers.

He further said Nigeria has become  an attractive destination for foreign airlines and that there are ceaseless applications for additional frequencies, adding that at present,  Nigeria has Bilateral Air Services Agreement (BASA) with 78 countries.

“However, some of these are not being utilised”, he had said.

It was learnt that in October 2014, Osita Chidoka, Aviation Minister, held talks with some private investors to set up a national carrier after his predecessor, Stella Oduah had initiated the plan about two years ago.

It would be recalled that the Federal Government had in 2004, chosen British airline, Virgin Atlantic, as its partner in the creation of a new national carrier known as Virgin Nigeria. At that time, Nigerian investors were expected to pay $25.5 million while Virgin Atlantic put in $24.5 million.

But Virgin Nigeria ceased operations about six years ago, after the Virgin group said it could not continue with the deal ‘because the Nigerian government reneged on it’.

Meanwhile, some stakeholders have kicked against the option of Ethiopian Airlines, saying government should rather have supported airlines like Arik Air or Aero, to go to the capital market and raise money to re-fleet.

They said fleet numbers as well as aircraft size, are the main problems of Nigerian airlines, adding that “if they have the money to re-fleet, they can act as flag carriers, instead of going back to where we were before’.

John Ojikutu, a consultant to the International Civil Aviation Authority (ICAO) said: “I hope we have learnt lessons from the choice of South African Airways in the 90’s, I don’t know why we should use Ethiopian Airlines, I hope some people are not out to siphon money. Government should strengthen Nigerian airlines to go to the market and re-fleet instead”.

SADE WILLIAMS