National carrier: FG, Aero's discussion collapses

The plan by the Federal Government to establish a new national carrier has suffered a setback following the collapse of discussions with its partner on the project.

The Federal Government's plan to establish a national carrier in partnership with Aero Contractors of Nigeria may have collapsed as discussions between the two parties are said to have stalled.

The breakdown in discussion between the government and the carrier is coming after the two parties had agreed to start painting Aero's planes in the proposed national carrier's colour.

A plane painted in the new livery of the proposed national carrier, which is to be named Nigerian Eagle Airlines or Nigeria One, had arrived the country from Europe late last year.

Insider sources close to the plan said talks between the Federal Ministry of Aviation and Aero hit a dead end recently when the airline's management refused to agree to certain terms suggested by the government for the establishment of the national carrier.

The government, through the ministry, had planned to use Aero, which the Asset Management Corporation of Nigeria has 60 per cent equity in, as the country's national carrier.

According to sources, the government is planning to use AMCON's 60 per cent equity in Aero as a platform to convert the airline into a national carrier.

However, the talks broke down a few weeks ago when the Aero management refused to agree to the conditions in the agreement bordering on the ownership structure in the proposed national carrier.

According to the sources, the Aero management feels the proposed shareholding in the planned national carrier may not favour the Ibru's family that owns the minority stake in the airline.

At the moment, the government is said to be working on a new blueprint to establish the national carrier.

It was learnt that the Ministry of Aviation was considering establishing a national carrier that would not involve any existing local airline as a partner.

A top official of the ministry, who spoke under condition of anonymity because he was not authorised to speak on the matter, said the government was planning to hold a stakeholders' conference later this month to discuss the way forward, especially on how to establish the national carrier on a clean slate.

The development means the much touted national carrier may not see the light of the day in months to come, with industry experts saying the procedure may take longer time as the government will need to go through a longer process of setting up a comprehensive legal and structural framework for the proposed carrier.

A top aviation industry official, who chose to speak under condition of anonymity explained, 'What the government wants to do is that there must be a legal basis for putting its money down because the money to buy the planes may initially have to come from the government. If that is the case, then there will be a need for an Act of the National Assembly to establish the national carrier.

'The initial plan to partner Aero, which suffered some setbacks, may have been easier, but unfortunately, it appears the discussion may not go through.'

Late last year, the Aero management decided to repaint one aircraft in the proposed national carrier colours to enable its usage for flight operations.

The government, in a bid to keep the proposed national carrier project secret, had kept the Boeing 737-500 aircraft painted in the new livery inside a hangar at the Lagos airport pending the day the carrier would be unveiled.

The development, it was learnt, did not augur well with Aero's management, which felt it was losing money by keeping a serviceable aircraft on the ground for too long a time.

Consequently, the aircraft was partially repainted from the livery of the proposed national carrier and put into regular flight operations.

When contacted about the collapse of the discussions, the Special Assistant (Media) to the Minister of Aviation, Mr. Joe Obi, said, 'Government has not named Aero or any other airline as the national carrier. Government promised to give Nigerians a national carrier and it is still committed to the cause.

'At the appropriate time, the character and architecture of the national carrier will be unveiled. Until then, it is safe not to speculate.'

On its part, the Aero management said it could not speak on the matter yet.

Ten years after the administration of former President Olusegun Obsanjo liquidated the national carrier, the government announced plans to set up a private-sector driven national carrier.

The government had said the national carrier would be ready by October 2012, but the promise did not materialise. Last year, the government also promised that it would be ready but efforts to unveil the national carrier late in the year met with last-minute setbacks.

However, the Minister of Aviation, Ms. Stella Oduah, is still optimistic that the project will see the light of the day this year.

Industry analysts doubt this will happen considering the latest breakdown of talks between Aero and the government as well as the fact that the 2015 elections are around the corner, a period political officer holders may not have the time to pursue critical projects.

The establishment of the national carrier had suffered multiple setbacks in the last two years, especially when the government's plan to partner with foreign carriers, Lufthansa German Airlines and AirFrance, hit a dead end.

Lufthansa and AirFrance had separately said they were not ready to offer management expertise to the country on the proposed national carrier.

They also said they were not ready to make any financial commitment or acquire stake in the proposed carrier, a situation that industry analysts said must have been informed by the government's history of not keeping to agreements. Punch