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‘It is at Nigeria’s detriment’ — airline operators explain position on Ethiopian Air’s stake in national carrier

‘It is at Nigeria’s detriment’ — airline operators explain position on Ethiopian Air’s stake in national carrier
November 18
07:58 2022

Nigerian airlines, under the aegis of Airline Operators of Nigeria (AON), say the federal government’s plan to give majority stake in Nigeria Air to Ethiopian Airlines (ET) consortium is detrimental to the country.

The federal government recently selected ET as the preferred bidder for Nigeria Air.

However, AON kicked against the move, adding that Nigeria Air should be a “wholly Nigerian investment”.

Also, the federal high court in Lagos prohibited the federal government from selling the shares of Nigeria Air to Ethiopian Airlines.

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In an interview with ARISE Television on Thursday, Roland Iyayi, chief executive officer, Top Brass Aviation Limited, explained why the AON had to go to court to stop the federal government’s choice of Ethiopian airline.

Iyayi said the local operators are against the structure, adding that “it was at the detriment of Nigeria’s interest”.

“What we have said and what we are saying is that the structure and the design that is being put together currently by the minister of aviation is a bit of an issue which we believe is not going to help the Nigeria state in the long term,” he said.

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“The minister has come out to tell us that this is intended to be a public-private partnership. And indeed if that is the case, we have a situation where we need to query, as a matter of questioning all the issues that have happened to date.  

“We have found the need to question the transparency of the project because we believe that most of the issues that have been raised or that are coming up are not entirely transparent, and we have issues with that. We have also come to find out, going through all the documentation that has been provided, that there are undue privileges that are going to be given to this new carrier, which the current domestic operators are not enjoying.

“For instance, the government is proposing, or the minister is proposing to have a 15- year tax moratorium on the national carrier. And again, let’s be very clear; this is not a national carrier in the context in which it is being presented; this is a flag carrier. 

“Simply because if you are bringing in a strategic investor at 49 percent stakes and you have all the institutional investors one of which is 60 percent owned by a foreign entity, in the long term what you are putting together is a foreign airline being allowed to come into the Nigeria airspace to operate, which is at variance with Article 7 of the International Civil Aviation Organisation (ICAO) convention, which is a cabotage.”

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According to Iyayi, AON believes that the structure of the planned national carrier was not in the overall interest of Nigeria but to benefit individual interest groups and foreigners instead of Nigeria.

“So we are saying that this is not in the longer term interest of the Nigerian public. We believe that ultimately the Nigerian public will not necessarily benefit,” he added.

“There will be unfair competition if you allow a new carrier to come in with special privileges that the other carriers are not getting. Again we have a situation where if you look at what the outline business case has presented, it will appear to us that this whole process will end up in a contrived outcome because it would appear that the choice of Ethiopian airline was already decided even before the process started.”

Iyayi added that AON would take the case to the supreme court to drive home its points.

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On the need for a national carrier, Iyayi explained that the government’s reason to have a national carrier is strongly supported, adding that “the basis of every bilateral or multilateral agreement is reciprocity”.

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