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Thursday, 2 August 2018
Should the new national carrier be completely privately owned?
Captain Fola Akinkuotu (Managing Director/Chief Executive Officer, Nigerian Airspace Management Agency)
It is advisable that the government should have a small stake. The government did part of the work, we did the viability report and government appointed transactional adviser. The government should benefit in a small way. Yes, the government is not putting in the bulk of the money yet, I think we should get a part of it.
For the government and the private enterprise to synergise, it is important to understand that if a project is viable, the private investors will put up the financial muscle and provide the management. I believe there should be good synergy between the government and the private investors to make the (expected) new carrier effective and efficient.
The private sector should be willing to put up the finances or initial funding. Why the aviation or national carrier has not worked is because it was under-capitalised. So the private sector should be willing to fund it properly and because of the demand that is involved, they should be willing to manage it properly. The government should be willing to allow the private sector to drive it in terms of management. The private enterprise should be willing to provide not only the money but managerial expertise because it has happened before that sometimes they put up the money and would not show enough interest. They must not only bring in their money, they must back it up with proper management and accountability.
Dr Al-Hameeda Fraser, Aviation security technologies consultant and entrepreneur
The government ought to hold shares in the national carrier project. The national carrier is a huge global project which requires substantial capital and collateral, goodwill, diplomatic relations, inter and intra governmental relations, exemplary management, accountability, innovation and dynamism. Government shareholding would be essential in order to fulfil this requirement.
The national carrier is the national identity of any nation just like the national flag and like an embassy, it promotes the culture, cuisine, commerce, and goodwill of the nation to the world. The national carrier flies to only the countries where the country has existing diplomatic relations so the government representation in the shareholding has an advantage just like establishing embassies globally.
In Africa alone, 47 out of 54 countries have national carriers or major shareholding in designated airlines. A national airline is an integral component for rebranding and perception management. Nigeria is becoming the economic hub of Africa next to South Africa with more than ten thousand passengers flying out of the country daily from various airports.
This human traffic alone justifies the need for a national carrier so that valuable funds can be circulated within our economy. Air China and Air Japan are just about to be launched later on in the year due to the level of traffic from their continent. Modern business concepts and blueprint strongly advocate the national carrier with the government and global investors in order to achieve a successful project. The five per cent for the Federal Government is minimal and ought to be at least 10 per cent. The national carrier will be a source of national pride for all Nigerians and we should all support the government on this project irrespective of political affiliation.
Finally, the shareholding of the government in the national carrier is the only factor that can boost global investors’ confidence in order to commit such a colossal amount to the project. Global investors would require a government guarantee in order to invest and maintain the huge monthly cash flow needed for this sort of venture. No Nigerian businessman or consortium can offer this level of collateral, guarantee and cash flow to comply with global investors’ requirements. The wealthiest Nigerian businessmen and women cannot afford to maintain a fleet of commercial jets like those utilised for cross continental journeys.
Group Capt John Ojikutu (rtd) is the Chief Executive Officer of Centurion Securities and a former Commandant of Murtala Muhammed International Airport
We must define ‘fully private sector driven’. My take on the national carrier is that it should not be a government airline like the defunct Nigeria Airways or private airlines like Virgin Nigeria or Arik and Aero, etc.
It should be Public Private Partnership for it to be a national carrier. My suggestions remain that foreign technical partner investors should have 40 per cent shareholding; credible Nigerian investors and boardroom gurus should have 20 per cent and the Nigerian public through the Nigerian Stock Exchange’s public offer should have 30 per cent; while the remaining 10 per cent should be shared between the Federal Government and the 36 states. This is a national carrier and not a government airline or private airline.
Isaac Balami (The immediate past President, National Association of Aircraft Pilots and Engineers)
The government needs to have a stake in it. And, of course, the government has a percentage in it (carrier). When the government has a stake and shows interest, you will see what the other airlines are going to benefit. For instance, some of them may decide to handle issues that have to do with maintenance, repair and overhaul, provide world class catering, training, etc. But if you leave everything in the hands of the domestic carriers or private investors, the start-up cost may be too high for them. This is partly because we don’t have any financial institution that is exclusively established to support the aviation sector, just as we have the Bank of Agriculture in the agricultural sector and the Bank of Industry for industries. So, while other countries have the capacity to buy brand new aircraft, can we boast same? Today how many banks in Nigeria can buy brand new Boeing 737?
I was privileged to be a member of the national carrier committee and I recall that it was stated then that the government is to have about five or 10 per cent stake in the airline. However, the venture is to be private-sector driven. I am also sure it is to be open to even the domestic airlines if they wish to participate. But the truth remains that there is no domestic airline in Nigeria at the moment that can effectively compete with the likes of Emirates Airlines or British Airways. So, Nigeria needs to wake up and we need that push in the aviation sector because it is very important.
Capt. Abdulmumini Abdulkarim (An aviation expert/professional)
Government’s involvement could help in bringing stability. Government having a stake will go a long way in achieving this objective. Also it is a national carrier, so government’s involvement in the ownership structure will be a very good idea because it will have a say in driving the carrier and giving it a sense of direction.
The management of the new carrier should be by the private sector. The Ministry of Aviation should not be the parent company. President Muhammadu Buhari and the minister have spoken; I do not think the involvement of the government in terms of putting civil servants there is desirable.
In terms of funding, though I do not have details, but the government putting in funds there means they mean business — they are putting their money where their mouth is on the issue of the national carrier. For now, since they said it was private sector driven, the private sector should be the greater financial investor. If you look at other national carriers, the percentage of the state is higher than five per cent for the project to work, there must be transparency, getting the right professionals, giving them the right training, and adhering to ICAO standards and other regulatory standards.
Rainbowgist
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