Monday, December 23, 2024
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Home EDITORIAL No need for another national carrier

No need for another national carrier

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On Monday, August 24, Binta Bello, Permanent Secretary of Aviation Ministry, inaugurated a 13-member committee under Mohammed Abdulsalam, former Managing Director of Discovery Airlines, as Chairman to make recommendations for a befitting national carrier.

 

Binta Bello
Binta Bello

The committee, given a one-week deadline, is to draw up a blueprint from reviewing past recommendations and consult widely with stakeholders, including international partners, to replace Nigeria Airways liquidated in 2003.

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It is to devise a best-fit model for another national airline managed by the government.

 

Justification for the project is extrapolated beyond economic considerations to include strategic national interest, the national pride of flying the green-white-green flag worldwide, and job creation.

 

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Revival of a previously mismanaged national airline is so attractive that commentary by aviation experts is near-unanimous backing it.

 

However, the enthusiastic responses to President Muhammadu Buhari’s proposal on August 6 smack of subterfuge by people warming up to use a new national carrier to defraud the treasury again.

 

We caution against floating another national airline on the wings of prestige and national pride.

 

The economic environment is not conducive for any business enterprise. Apart from inflation, which is still in a single digit, all the significant economic indices head in the wrong direction.

 

Interest rate is close to 25 per cent; exchange rate is volatile at about N197 per dollar officially, but unofficially above N200 per dollar with the Central Bank of Nigeria (CBN) battling to restabilise it, among other measures.

 

Worse still, with oil price hitting a trough of $40 per barrel, national revenue for a highly capital intensive imports project must be pursued with circumspection.

 

Those in the industry only celebrate reduction in aviation fuel price, though the fall is the bane of the overall economy. In other words, even the most efficiently managed airlines are not having an easy ride.

 

So, if a public corporation was in the past grounded into bankruptcy with crippling debts to foreign service providers, hardly would we encourage its revival without an in-depth probe into the causes of its failure.

 

Nigeria Airways cost enormous sums in its transformation to Virgin Nigeria to Air Nigeria before it finally disappeared. The problems of Nigeria Airways are too well known to recount here.

 

Suffice it to recall that powerful public officeholders like ministers, presidential advisers, governors, and commissioners delayed fully loaded planes on the tarmac while they attended to other pressing official issues.

 

They flew First Class free of charge with nuclear family members, extended relatives, and friends who filled the cargo hold with duty free cargo under diplomatic cover but diverted it to the commercial market.

 

We would rather recommend creating a conducive environment for existing private airlines to remain afloat.

 

Domestic airlines such as Arik Air, Aero Contractors, Dana Air, Air Peace, First Nation Airways, Allied Air, among others, have obviously mastered the environment.

 

Unwritten but highly recommended obligatory government patronage with fare-paying public office holders, including the president, would greatly encourage them to expand and enhance operations, and hone efficiency and profitability to transform into national carriers.

 

All the advantages of code shares, flight frequencies, and other reciprocity benefits national carriers enjoy under bilateral air service agreements (BASAs) will add fillip to their success stories.

 

Whether it makes more sense to channel enormous capitalisation funds into a CBN zero interest corporate recapitalisation project, or directly into less efficiently recapitalised aviation businesses makes no difference.

 

Any form of investment in the resuscitation of businesses in general is a welcome relief for corporate executives to expand operations, produce more goods and services, generate more jobs; among all the benefits in the circle of wealth creation.

 

The government has no business operating businesses. Too many public companies have been run aground by mismanagement and inefficient corporate governance.

 

Nigeria Airways or Virgin Nigeria or Air Nigeria is a typical example whose revival we caution against.

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