FG to spend N7.45bn on Nigeria Air in three years
Over the past three years, the Federal Government has proposed to spend a total of N7, 454,000,000 to establish a new national carrier otherwise known as Nigeria Air. This information is according to figures contained in the proposed annual national budgets for the fiscal years 2021, 2022 and 2023.
In the 2023 budget proposal which President Muhammadu Buhari presented to the National Assembly last week, the sum of N1.3 billion was budgeted for the national carrier.
A further breakdown of the budget proposal by the Ministry of Aviation shows that the ministry intends to expend the sum of N700 million as “working capital” for the Nigeria Air project. The ministry also budgeted an additional N200 million as “consultancy fee”.
Recall that in the 2022 budget, the Ministry of Aviation had proposed to expend the sum of N1 billion on the national carrier project. The appropriation bill also showed that the government had proposed to pay the sum of N250 million as “consultancy fee”.
In the 2020 national budget, the Ministry of Aviation proposed the sum of N4.6 billion as “working capital” for the national carrier project. The government also proposed to pay the sum of N304 million as a “consultancy fee” for the same national airline project in the approved 2020 budget.
With this, the government has so far proposed to spend a total of N7, 454,000,000 on the controversial national carrier project in the last three years.
Meanwhile, aviation stakeholders have expressed conflicting views over the plan to re-establish a new national carrier for the country. While some people believe that establishing a new airline would be good image for the country and its tourism sector, others believe it could create an uneven working environment for existing aviation operators. They have also argued that most developed aviation countries do not necessarily have national carriers.
Recall that before the proposed national airline was suspended temporarily in 2018, the government had wanted it to commence operations in December of that year. There was an initial target of 81 routes upon commencement of operations (local, regional and international), with 15 leased aircraft and an additional 30 planes within three to four years.
Last month, the Ministry of Aviation picked Ethiopian Airlines as its core investor and technical partner for Nigeria Air, giving it 49% equity stake.
Also, Skyway Aviation Handling Company (SAHCO) Plc, MRS, and others emerged as the other three Nigerian investors in the national carrier. Collectively, the Nigerian investors own a 46 per cent stake in the company, while the Federal Government’s stake is at 5 per cent.
The soon-to-be-launched airline will initially commence operations with three damp leased Boeing 737-800 aircraft from Ethiopian Airlines, and later expand the fleet in the coming months to about 30 aircraft.
The Minister of Aviation, Senator Hadi Sirika, said “an interim Executive Team of highly skilled aviation experts has been working since February 2022 to set up all the necessary regulatory and industry requirements to launch the national carrier.
All executives have been approved by the Nigerian Civil Aviation Authority (NCAA), the Air Transport License has been issued by NCAA, Nigeria Air (after having identified the first three aircraft) will now finalise all necessary Operation Manuals and then go through the inspection and approval process of NCAA.”
The minister further added that “the money spent for the launch of Nigeria Air, for all the requirements to establish an AOC and be admitted starting an airline operation, is well within the 5 per cent capital investment of the Federal Government of Nigeria, that will be overall needed to establish the national carrier initially for the AOC approval and everything else required by stringent national aviation regulations, as prescribed in the FEC approved Outline Business Case (OBC).”
He said no further funding would be provided above the 5 per cent share capital on the national carrier by the Nigerian government.
