Late hitch delays Nigeria Air launch date

Nigeria Air should be flying by now. The fact that it is not will not surprise industry observers, who are well aware of the unexpected bumps in the road that accompany the creation of any new airline.

Just as it seemed as though Nigeria’s new national airline was ready to take to the air late last year, it hit unexpected turbulence.

All seemed to be going well, even if the initial planned launch date of July 1 had been missed.

The west African nation has been without a flag-carrier for a decade and its government announced plans in 2018 to re-establish a national airline.

In recent years, the country’s airline sector has been populated by a group of relatively small operators. Frequencies between cities – an important factor in stimulating traffic – are typically low.

After a lengthy selection process, the Nigerian Government chose Ethiopian Airlines – the continent’s consistently most successful carrier – as its strategic equity partner, with a 49% shareholding in the new company. The Nigerian Government will hold just 5% of the new airline, with other Nigerian investors making up the remaining 46%.

The intention is that Ethiopian will supply its managerial and organisational expertise, together with an initial batch of aircraft, for the new flag-carrier.

The revised schedule aimed to start operations by the end of last year, initially using three Boeing 737s from Ethiopian’s fleet to begin domestic routes, with the intention of gradually expanding into regional, then long-haul services as the new company gained experience and acquired wide-bodied aircraft.

As the parties seemed to be entering the final stretch before launch, however, six Nigerian airlines took legal action against the country’s aviation and justice ministries and obtained a temporary injunction, halting the launch process.

The apparent reason? Concern that the proposed arrangement will allow Ethiopian to gain entry to the potentially huge Nigerian market, to the detriment of local competitors.

The fact that the company will come with government backing, together with a wave of popular support for a new national airline, gave rise to fears that existing companies would be squeezed in the marketplace.

The airlines went to the country’s Federal High Court in Lagos and, in a decision made public on November 15, the court granted an interim injunction, barring the government or any of its agents from progressing work to set up the new national airline.

Specifically, the injunction forbade the sale or transfer of shares in the new airline to Ethiopian.

The complaint alleged irregularities in the selection procedure that saw Ethiopian chosen as strategic partner. The airlines also sought damages of 2 billion naira ($4.5 million) in compensation for what they said was their “wrongful exclusion” from the project and an unlawful bidding and selection process.

Ironically, the injunction was granted just hours after the country’s aviation minister, Hadi Sirika, told journalists that there was no law to prevent the government from setting up Nigeria Air.

The Nigerian media reported that Sirika had also said that he had asked several existing Nigerian airlines to take shares in the new flag-carrier, but that none had chosen to do so.