On 18th July, 2018 the Nigerian government unveiled Nigeria Air, a new national airline at the Farnborough International Public Airshow in London.
According to the Minister of State for Aviation, Senator HadiSirika“this will be a National Carrier that is Private sector-led and driven. It is a business, not a social service. Government will not be involved in running it or deciding who runs it. The investors will have full responsibility for this.”
15 years ago…
In May 2003, Nigeria Airways had a Boeing 737-200 as its sole functional aircraft, it was a necessary decision based on the deteriorating performance of the airline and massive debts. The airline ceased operations.
Here is what happened: (Source: Wikipedia)
“The introduction of International Monetary Fund policies, along with corruption, mismanagement and overstaffing, led to a steady decline of Nigeria Airways from the 1980s. The carrier had accumulated significant debts that outstripped its revenues from the mid-1980s to the extent that aircraft were detained or impounded for unpaid debts.
The International Air Transport Association (IATA) suspended Nigeria Airways in early 1987 from the clearing house (which meant the airline could not issue tickets to fly on other IATA member airlines and the conversefor accumulated debts of US$1,100,000. In late 1987 the airline had debts for approximately US$250,000,000, with revenue of US$5,000,000 per month and expenditure of approximately US$5,175,000 a month.
This situation prompted the airline to increase its domestic and international fares by 100% and 20%, respectively, in order to raise funds to alleviate the deficit, but this measure reduced the passenger traffic. Even though 1,000 jobs had been cut by late 1986 and 1,700 in the course of the previous year, Nigeria ordered the airline to further downsize (the number of employees was 8,500 at the time—or 500 for each aircraft in the fleet, twice the international averageand to reduce or discontinue unprofitable routes.
In 1988, cost-cutting measures led to the discontinuance of flights to a number of African destinations, including Cotonou, Dakar, Douala, Kinshasa, Monrovia and Nairobi, and to the transfer of some routes to the privately owned airline Okada Air; some of these routes were resumed a year later. In December 1988 the airline dismissed 3,000 employees, a third of the workforce, in an effort to keep operations afloat. In the late 1980s the airline lost a deposit worth US$350,000 for not firming up an order for six ATR-42s. Financed by a Japanese leasing company, the carrier phased in the last DC-10 ever built; the aircraft was delivered in 1989, and replaced an aircraft of the same type that was lost in an accident two years earlier.”
After the dissolution of West African Airways Corporation (WAAC) in 1958, Nigeria Airways ltd was in born. Up until 1971, it held the name WAAC Nigeria when it was rebranded to the name it held until it closed its doors in 2003.
In a bid to boost its asset and economy, in 1961 the government boosted its participation from 51% to 100% and made the airline the country’s official carrier.
The market was focused on domestic flights and international flights in West Africa; it also had points in Europe, North America and Saudi Arabia. Despite being owned by the federal government, there was evidence of a desire to succeed, the government sought experience and allowed foreign companies, including South African Airways, British Airways and KLM to manage it.
It wasn’t always disaster. Nigeria Airways had its heyday in the early 1980s, just before the departure of a KLM team that had been hired to make the airline efficient and profitable. At that time, its fleet consisted of about 30 aircraft, but the carrier was two years behind with its accounts to the degree that aircraft were acquired for cash.
It was a business venture determined to succeed, and make history. Owned or leased, the carrier operated a variety of aircraft during its time thatponged of beauty, memories and class including the Airbus A310, the Boeing 737, and the Douglas DC-10, it flew the last one ever built.
Despite the government’s investment of US$200 million in its last decade, the airline was cursed by mismanagement, corruption, and overstaffing, at the time of closure the airline had massive debts worth US$528,000,000 (equivalent to $702,408,104 in 2017), a poor safety record, and its operative fleet comprised a single aircraft flying domestic routes as well as two leased aircraft operating the international network. The government decided not to pump in more money but to liquidate it. 15 years of declining market shares made the decision quite easy. The carrier’s passengers had fallen from 2.1 million in 1985 to just 10,000 in the first quarter of 2003, controlling just 6% of domestic flights and 1% of international flights. Nigeria Airways was succeeded by Virgin Nigeria, and the ground facilities were taken over by Arik Air.
The Farnborough International Airshow is the industry’s largest air show and aerospace technology exhibition in 2018. Thousands of commercial and defense aerospace professionals will come together July 16-22 at this renowned venue outside London. Which makes it a perfect venue for the unveil of the new Nigeria Air.
HadiSirika, Nigeria’s minister of state for Aviation, revealed the national carrier logo, colour scheme, structure and the type of aeroplane for the airline.
In a bid to not repeat old errors, here is a breakdown of the new structure that will guide the airline.
The airline will start operation on December 19, 2018.
The government will not own more than 5% of the airline.
The airline will be entirely controlled by the private sector but its initial funding will come from the federal government of Nigeria.
Pre-startup cost is $8.8 million and will cost over $300 million in the next three years.
Nigeria will take about 30 aircraft in the 5 years but will start 3 aeroplanes as the first set.
The airline will have flights on 81 domestic, regional and international routes.