One major unfulfilled campaign promise from the President Muhammadu Buhari’s administration is the creation of a new national carrier. The talk about its creation sparked heated debate. It led to stakeholders examining what led to the collapse of Nigeria Airways (the defunct national carrier), as well as the pros and cons of creating a new national carrier.
Although the debate currently tilts in favor of the naysayers, there are still sound reasons why Nigeria should float a new national carrier. Most of the reasons canvassed against its creation are rooted in the failures of the defunct Nigeria Airways.
Nigeria Airways was liquidated in 2003 for many reasons, including mismanagement, corruption, and a spate of plane crashes from the 80s.
Since the disappearance of the national carrier from the aviation space, Nigeria has suffered a loss of around $2 billion in capital flight.
Despite this, those against the creation of a new national carrier believe that it is not a logical step for the aviation industry in Nigeria. They propose an alternative, which is opening up Nigeria’s airspace for more direct and frequent flights to and from African cities. They say this has the potential to boost the economy by $128 million and create over 17,000 jobs.
The loss of $2 billion in capital flight is further exacerbated by the domination of the Nigerian aviation space by foreign airlines and the weakness of local insurance companies to effectively handle issues of aviation insurance. If the proposed alternative is adopted; this capital flight could double, as this will lead to more foreign participation in the sector.
Also, the establishment of a national airline will encourage the establishment of maintenance, repair and overhaul (MRO) facilities in Nigeria which can help block further capital flight and inevitably create jobs. Nigeria’s MRO facilities disappeared with the country’s national carrier, along with the $190 million that came with the facilities.
The third problem of not having a national carrier is the underutilization of the Bilateral Air Service Agreements (BASA) that the government has signed. These agreements allow international commercial air transport between territories. Nigeria has signed 78 of these, but they favor other countries, partly due to the lack of national carrier in Nigeria to reciprocate. A national carrier will make it possible for more players to fly competitive routes, which in turn will reduce the exorbitant airfares in Nigeria’s aviation sector.
Floating a national carrier is also a useful way for the government to earn foreign exchange. This can be done by privatizing a majority stake in the airline. This helped the national carriers of Ethiopia and Singapore to thrive.
There are also examples of national airlines being vital in boosting tourism. Kenya doubled the growth of its tourism industry through Kenya Airways by promoting its tourism sector on all flights on the national carrier.
A new national carrier will also result in an increase in jobs and development. Job opportunities for positions such as engineers; pilots; flight attendants; cleaners; booking agents; and caterers; will be created. The national carrier will also help to train Nigerians for the jobs created in the sector. This is important when most pilots and engineers in the industry are foreigners.
A new national carrier can kick start the renovation and activation of the over 26 airport facilities in Nigeria. The ripple effect of this is an increase in air travelers, which leads to a decrease in road travelers and a significant reduction in road accidents in Nigeria.
There are very few national projects with this potential. Nigeria should do everything within its power to make it succeed. – Written by Daniel Godson Olika