Outrage trails Nigeria Air N85 billion project

Adebayo Obajemu

Nigerians have expressed outrage and indignation over the fiasco of the Nigeria Air project initiated by the former president Buhari administration, which is believed to have cost the country about N85 billion. The entire project seemed to have been conceived in deceit and executed in corruption, which was displayed so shamefully with the launch of a chartered aircraft as the new airline.

In view of this, the House of Representatives two weeks ago summoned the Permanent Secretary of the Ministry of Aviation, Dr. Emmanuel Meribole, over controversies surrounding the Nigeria Air launch.

The emergency meeting, according to Nnolim Nnaji, the chairman House Committee, was meant to address grey areas in the project, and the Permanent Secretary was directed to bring all relevant documents and personnel connected to the national carrier. The meeting had been rescheduled to Tuesday, June 7, as the Permanent Secretary requested for more time to gather the necessary documents and individuals.

A media report suggests that the Nigeria Air aircraft had returned to service in the Ethiopian Airlines livery. The invitation sent to the Permanent Secretary read in part:

“Last Friday, the 26th of May, 2023, the nation was awash with viral reports and videos of the unveiling of the Nigeria Air project under very controversial circumstances, as the committee of the parliament saddled with the responsibility of oversight the aviation sector of the economy we deem it necessary to be fully briefed about the project.

“Consequently, l am directed to invite you to an emergency session with the committee on Thursday, first of June 2023. You are to come with all individuals/agencies connected to the project.”

The statement, however, said that Meribole requested more time to be able to assemble all the necessary documents and individuals connected with the project.
The Committee wanted detailed information on the deal with Ethiopian Airlines.

The details of the documents pressed for in the invitation include the followings:

i. Full business case (FBC,) as prepared by the Infrastructure Concession Regulatory Commission, (ICRC),

ii. Full disclosure on the ownership structure of Nigeria Air including equity contributions by individuals, organisations, and Consortium outlining each contribution, names, addresses, phone numbers, and their businesses’ registration certificates.

iii. All Private, Public Partnership, (PPP) agreements reached and signed with Ethiopian Airlines on the project.

iv. All Private Public partnership agreements reached and signed with other parties with stakes in Nigeria Air

V. All documents, permits, and receipts relevant to the subject matter.

vi. Shareholders’ agreements

Vii. Infrastructure Concession Regulatory Commission, (ICRC) agreement and

Viii. Any other documents that will assist the committee in this assignment.

Nigerians have been livid with anger since last week following media report that claimed that the controversial Nigeria Air aircraft Boeing 737-800 with the registration number: ET-APL had returned to service in Ethiopian Airlines kits.

The report had it that the aircraft, which made its way into the country for static display by Sirika, some days before he left office returned to Addis the next day.

The tenure of the former Aviation Minister, Hadi Sirika may have gone down in history as the most controversial, as right from his appointment in 2015 to the end of his tour of duty in May 2023, Sirika, a relative of the former president Buhari was shadowed by controversy.

Ironically, he has emerged with the medal of being the longest serving Aviation Minister in the country, 2015 to 2023. Right from the day his appointment was announced, Sirika said he would gift Nigeria with a new airline.

This utterance chilled the industry stakeholders and raised their antennae of suspicion as a national carrier was no longer in vogue in today’s ultra competitive aviation industry. It’s no longer a secret that there is ongoing global debate about the relevance of a national carrier in today’s aviation market as many former national carriers have either changed to flag carriers or shut down operations totally.

Investigations by Business Hallmark revealed that the former leading national carriers, such as Malaysian Airways, Alitalia, Kenya Airways and South African Airways, among others, are gripped by debilitating debts, and are only surviving on continuous government interventions, a situation, which stakeholders said Sirika ought to have see, being a pilot himself.

As Sirika made bold his determination to partner with the Ethiopian Airlines in the formation of a national carrier, Nigerian Air, he did not carry stakeholders along right from the beginning, nor did he make full disclosures as a lot of information on the Nigerian Air was shrouded in secrecy.

Sirika at the first stakeholders’ meeting in Lagos in November 2015 had promised to give Nigeria a new national carrier with the country’s logo and flag, but he did not elaborate on the comprehensive plans. This obfuscation created suspicion and oppositions against the national carrier project as stakeholders, including foreign investors, were said to be afraid to go near the project, which Nigerian aviation industry experts claimed, was dead on arrival.

Most stakeholders and observers are of the view that the project, lacked transparency from the start and also questioned the rationale behind the choice of Ethiopian Airlines as the Technical Partner.

Recall that Airline Operators of Nigeria, the umbrella body of indigenous airlines in the country, expressed fears that its birth would create an uneven playing field for the sub-sector and vowed the carrier would not spread its wings, banking its misgivings on opaqueness of the deal with Ethiopian Airlines.

They wondered why Sirika, who was a helicopter pilot with the Nigeria Police for six months before he ventured into business and later politics, could go into such an arrangement with the Ethiopian Airlines without consultations, then the hastiness of the deals and so many other questions that remained unanswered.

A source knowledgeable in the industry told Business Hallmark that before a Technical Partner or a core investor could be mapped out for a choice, the relevant government agencies like the Infrastructure Concession Regulatory Commission, Bureau of Public Enterprises and others must be carried along, but this was not the case.

Less than a week after denying that Ethiopian Airlines was the Technical Partner the government said the East African carrier was the preferred and the only bidder in the project with 49 per cent equity shares.

Sirika had told journalists that apart from the Ethiopian Airlines’ 49 per cent stake, the Federal Government would also have five per cent shares, while the local investors would share the remaining 46 percent

He said Ethiopian Airline was investing $300 million in the Nigeria Air project.
Among the local investors mentioned by Sirika were Skyway Aviation Handling Company, MRS and other investors, who he declined to name till date.

According to him, the new national carrier would commence flight services with three Boeing 737 aircraft by December 2022 after the approval by the Federal Executive Council.
Sirika also said the choice of Ethiopian Airlines was accepted by the Infrastructure Concession Regulatory Commission, having gone through the Request for Proposal under the Public Private Participation Act.

He had declared that the consortium had been subjected to a due diligence process, after which the contract would be negotiated between the consortium and the government, thereby leading to a Full Business Case.

He said, “An interim Executive Team of highly skilled aviation experts has been working since February 2022 to set up all the necessary regulatory and industry requirements to launch the national carrier. All executives have been approved by the Nigerian Civil Aviation Authority (NCAA), the Air Transport Licence has been issued by NCAA, Nigeria Air (after having identified the first three aircraft) will now finalise all necessary Operation Manuals and then go through the inspection and approval process of NCAA.

“The money spent for the launch of Nigeria Air, for all the requirements to establish an AOC and be admitted, starting an airline operation, is well within the five per cent capital investment of the Federal Government of Nigeria, that will be overall needed to establish the national carrier initially for the AOC approval and everything else required by stringent national aviation regulations, as prescribed in the FEC approved Outline Business Case (OBC).

“This OBC is the milestone for the preferred Bidder Consortium and has been met by the submitted business plan of the preferred bidder. It is the overall share capital of around $300 million, provided by the preferred bidder that will launch Nigeria Air to its full size of 30 aircraft and international operation within the next two years.”

Sirika clarified that no further funding would be provided above the five per cent share capital on the national carrier by the Nigerian government.

However, a few weeks after its name was mentioned as the major shareholder and core investors, Ethiopian Airlines allegedly publicized an organogram ceding positions of the Chief Executive Officer, Directors of Finance, Commercial, and Engineering; Director of Purchase, Director of Cargo Sales, and Director of Quality Assurance to it.

The airline has yet to discredit the list, while the Ministry of Aviation has also kept mute. Stakeholders were not amused and vowed to go to court, which they did as they insisted that
choice of Ethiopian Airlines would impact negatively on the fortunes of the impending national carrier, adding that the new airline has been listed as a subsidiary to the East African carrier, which would limit its spread and route networks.

Stakeholders expressed fears that the choice of Ethiopian Airlines would also stop Nigeria Air from flying to the United Kingdom, United States of America, United Arab Emirates (UAE) and any other country the East African carrier has a Bilateral Air Service Agreement (BASA) arrangement with since Nigeria Air is its subsidiary.

According to a top official of the Nigerian College of Aviation in Zaria, who spoke to Business Hallmark on the condition of anonymity “Sirika was a disaster in the industry.” He had personal interest in pushing for Ethiopian Airlines as preferred Technical Partner.

Industry analysts agreed with him as they also accused Sirika of being the sole decider of the work and scope of Nigeria Air, thereby raising personal interest allegations.

Tianaero Nigeria Limited, the Transactional Advisor named by Sirika, allegedly paid the sum of $352 million for the Nigeria Air project, what’s more, findings at the Corporate Affairs Commission showed that Tianaero Nigeria Limited was registered in 2021 and ownership was by one Capt. Tillman Gabriel, said to be a lecturer at the City University of London. Gabriel is the Head of the Transaction Advisor for the Nigeria Air project.

On November 11 last year, the Airlines Operators of Nigeria, AON went to court to stop the birthing of the Nigerian Air, and in November 2022, the Nigerian Federal High Court in Lagos granted the AON an interim injunction that prevents Sirika, the Federal Ministry of Aviation, Nigerian Attorney-General Abubakar Malami, and other defendants from continuing with the launch of the new national carrier. This followed a court application filed on November 11 by the registered trustees of the AON, including Azman Air, Air Peace, MaxAir (Nigeria), TopBrass Aviation and United.

On April 25, this year, the Abuja division of the Federal High Court dismissed an attempt by the AON to stop an order by Chief Justice John Tsoho directing the transfer from Lagos to Abuja of the case in which the private airline organisation is challenging the establishment of Nigeria Air, the federal government’s new joint venture with a consortium led by Ethiopian Airlines (ET, Addis Ababa).

In his judgement, Abuja Federal High Court judge James Omotosho dismissed the AON’s attempt as “frivolous [and] unreasonable as it disclosed no cause of action”. He awarded NAD1.5 million naira (USD2,172) in favour of the Chief Judge of the Federal High Court for having been “humiliated and harassed” in the course of his duties.

“The plaintiffs cannot bring an action against the discretionary powers of the chief judge to transfer a case and re-assign the same. The chief judge acted in his judicial and administrative capacity and cannot be sued for his action. The action of the plaintiffs has not disclosed any reasonable cause of action. […] This suit is frivolous, unreasonable and brought to humiliate and harass a public officer. I, hereby, award a cost of NAD1.5 million against the plaintiffs in favour of the chief judge,” Omotosho said.