Views: 92 Posts: 1 Started By: Lil_Prince Last Poster: Last Post Date: Dec 05, 2015
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October 29, 2015 ( Post 1 )

MORE than a decade after
liquidation of the Nigeria Airways,
the healthy discourse on the
possibility of a new national carrier
has only underscored the
significance of the quest and the
need to balance best business
practices with national interest.
President Muhammadu Buhari’s
directive to the ministry to get a
committee to review modalities for
floating a viable, competitive
carrier is a good statement of intent
in the national interest that should
be followed by a sound business
management plan.

Therefore, the submission of a
report on the matter the other day
is a step towards the realisation of
a dream but the renewed quest
should not prevent all from looking
back at past mistakes and charting
a new path for the proposed airline
with unhindered input from the
private sector. Ordinarily, given the
experience of Nigeria over the
extinct Nigeria Airways, any so-
called ‘national’ enterprise is
another avenue for waste, looting
and sundry brigandage. And with
previous attempts at revamping
Nigeria Airways Limited (NAL)
collapsing the way such did, what
would be the assurance that the
new carrier would fly? The fear,
indeed, is that no evidence exists
that greed, corruption and
decadence which attended most of
the nation’s government-owned
enterprises have been adequately
addressed.

Mismanagement has undoubtedly
been the lot of public companies
and government business which
either never flourished or are
looted to the bones by their
managers even when they did.
Many became bottomless pits for
public funds, prompting their
eventual commercialisation or
outright privatisation.
However, the president’s signals
suggest a new faith in a new
national airline with all its
attendant benefits, hence his
directive to the committee to
proffer suggestions on the proposed
enterprise. The panel was charged
to consult with the international
community and private sector on
carrier based on public-private
partnership. Moreover, the Assets
Management Corporation of Nigeria
(AMCON) was to determine the debt
profile of domestic airlines which
would guide the panel in its
recommendations while
determining the best model for the
new airline.

The panels’ invitation to 74
stakeholders from airline operators
to aviation agencies, service
providers, financial consultants,
institutional investors, aircraft and
parts’ suppliers and staff members
of the defunct NAL at least showed
some effort at seriousness and the
“far-reaching recommendations”
made according to the team leader
raise hope of a positive
development. Yet, history tugs at
the heart-strings. After the
unfortunate liquidation in 2003 of
the 32-year-old national airline, the
nation has tried but found it
extremely difficult getting back on
track with another carrier, even
with attempts at partnership with
other successful brands.

With a depleted fleet from 32
aircraft in 1984 to a low of three in
year 2000, one option opened to the
Nigerian government was
partnering with a big European
airline for which Air France,
Lufthansa and Swissair were
considered. All fell through. The
International Finance Corporation
which was commissioned to assist
in the process of restructuring and
privatising withdrew its advisory
role in 2001, citing the
unwillingness of NAL and the
government to carry out necessary
measures capable of making NAL
attractive to potential investors.
Various other allegations of looting
and mismanagement flew alongside
IFC’s complaints.

By 2001, safety concerns had grown
to force UK authorities to bar
Nigeria Airways from operating
into its territory. Long before then,
the carrier had accumulated
significant debts that outstripped
revenues from mid-1980s. By late
1986, 1000 jobs had been cut with
pressure from government to
further reduce the 8500 staff
strength in an operating
environment of staff-aircraft ratio
of 500:1. By April 2000, employment
was 4516 just as aircraft numbers
shrank amid routes’ rationalisation.
The Nigerian predilection for abuse
of anything that belongs in the
commonwealth played a role too.

Free tickets to staff and family
members and privileged
government officials combined to
ruin the company’s fortunes and
there was no doubt that NAL was
destined for extinction. It went into
that spectacularly.
Certainly, Nigeria has not had an
enviable history of any public
enterprise and this seems to
support the contention of anti-new
carrier proponents.
In setting about floating the carrier,
if it must, government still needs to
listen to opposing stakeholders and
address their fears. The
government may even have to
enunciate policies and create an
environment that promotes a
private sector-driven national
carrier.

Also, based on the high-flying
performance credentials of
exemplars like Kenya Airways and
Ethiopia Airlines, there may be
need to study and adapt their
business models and in the course
of time operate to surpass their
achievements. Fixing the sector also
calls for the involvement of
technocrats, aviation professionals
of integrity at home and in the
Diaspora. World-class facilities for
Maintenance, Repair and Overhaul
(MRO), competently manned, must
be on the priority list. Above all, if
the committee’s report is accepted,
the whole process must be devoid
of legal encumbrances capable of
aborting the new venture.


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December 5, 2015 ( Post 147 )

NIce One, FG



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