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Without a national flag carrier, our airline sub-sector will continue to struggle — Aligbe
Chief Executive Officer of Belujane Konzult, Mr Chris Aligbe, in this concluding interview, dismisses reports that botched Nigeria Air deal was a complete fraud.
Aligbe, who argues that without a national flag carrier, the country’s airline sub-sector will continue to struggle, urges the Federal Government to revise the agreement Nigeria has with Ethiopian Airlines because given how the country’s domestic airlines are structured, they “will never make it.”OME
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November 16, 2024
Without a national flag carrier, our airline sub-sector will continue to struggle — Aligbe
Without a national flag carrier, our airline sub-sector will continue to struggle — Aligbe
By Dickson Omobola
Chief Executive Officer of Belujane Konzult, Mr Chris Aligbe, in this concluding interview, dismisses reports that botched Nigeria Air deal was a complete fraud.
Aligbe, who argues that without a national flag carrier, the country’s airline sub-sector will continue to struggle, urges the Federal Government to revise the agreement Nigeria has with Ethiopian Airlines because given how the country’s domestic airlines are structured, they “will never make it.”
Issues with Nigerian airlines
Our airlines have no corporate governance, no due diligence, nothing. Their finances are not what they should be. All their books are in the red. I do not want to talk about it because they think you are demarketing them. If they feel demarketed, let them respond.
They will complain about the conditions in Nigeria. When there was war in Ethiopia, Ethiopian Airlines, through the help of Nigeria Airways, moved its headquarters to Nairobi from Addis Ababa. Government did not interfere. Ethiopian Airlines stayed afloat. It made gains. It kept operating.
As operators, it is required that you wake up and think about how to combat challenges before you. When you are setting up, you look at the challenges ahead. You have to ask specific questions such as what is the trajectory at this point? What are we likely to encounter? In Nigeria, they will say there are challenges and difficulties in the country. I do not believe that. You need people who know how to manage an airline, and who know what is involved in running an airline to come together. You need tremendous corporate governance. You need financial outlay.
No private airline is rated globally. We want to build a hub, there is no such private airline or group of private airlines that can build a hub in Nigeria and no foreign airline can build a hub. I am speaking about the kind of foreign airline investment that will expand your network automatically and you begin to build a base for interlining passengers. No matter what, these people flying from point-to-point will never build a hub for our country. And no private airline will build a hub for us. They will fly in, take their money and go.
Legacy airline
These are the three schools of thought. In Nigeria, we have practised the first one and it failed. It failed us for very obvious reasons. However, we have not practised the second one (national flag carrier) where you have a legacy airline coming to invest. We were to do it with Nigeria Air but didn’t happen.OME
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November 16, 2024
Without a national flag carrier, our airline sub-sector will continue to struggle — Aligbe
Without a national flag carrier, our airline sub-sector will continue to struggle — Aligbe
Chief Executive Officer of Belujane Konzult, Mr Chris Aligbe, in this concluding interview, dismisses reports that botched Nigeria Air deal was a complete fraud.
Aligbe, who argues that without a national flag carrier, the country’s airline sub-sector will continue to struggle, urges the Federal Government to revise the agreement Nigeria has with Ethiopian Airlines because given how the country’s domestic airlines are structured, they “will never make it.”
Issues with Nigerian airlines
Our airlines have no corporate governance, no due diligence, nothing. Their finances are not what they should be. All their books are in the red. I do not want to talk about it because they think you are demarketing them. If they feel demarketed, let them respond.
They will complain about the conditions in Nigeria. When there was war in Ethiopia, Ethiopian Airlines, through the help of Nigeria Airways, moved its headquarters to Nairobi from Addis Ababa. Government did not interfere. Ethiopian Airlines stayed afloat. It made gains. It kept operating.
As operators, it is required that you wake up and think about how to combat challenges before you. When you are setting up, you look at the challenges ahead. You have to ask specific questions such as what is the trajectory at this point? What are we likely to encounter? In Nigeria, they will say there are challenges and difficulties in the country. I do not believe that. You need people who know how to manage an airline, and who know what is involved in running an airline to come together. You need tremendous corporate governance. You need financial outlay.
No private airline is rated globally. We want to build a hub, there is no such private airline or group of private airlines that can build a hub in Nigeria and no foreign airline can build a hub. I am speaking about the kind of foreign airline investment that will expand your network automatically and you begin to build a base for interlining passengers. No matter what, these people flying from point-to-point will never build a hub for our country. And no private airline will build a hub for us. They will fly in, take their money and go.
Legacy airline
These are the three schools of thought. In Nigeria, we have practised the first one and it failed. It failed us for very obvious reasons. However, we have not practised the second one (national flag carrier) where you have a legacy airline coming to invest. We were to do it with Nigeria Air but didn’t happen.
At one time Captain Joji wanted to do it but he lived ahead of his time. That didn’t work. That is the privatisation of 1992-1993. Since then, it has been individual airlines and family airlines such as Okada, ADC, Kabo, Flash, Bellview, Medview and Arik among others. All of them were individually owned. ADC was owned by three captains that left Nigeria Airways. Of all the airlines, none of them has successfully sold their shares to the public. The three that went failed. Medview, ADC and the airline by Marwa. The three airlines went to the stock market and they all failed, leading to loss of money among investors. This is the situation.
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November 16, 2024
Without a national flag carrier, our airline sub-sector will continue to struggle — Aligbe
Without a national flag carrier, our airline sub-sector will continue to struggle — Aligbe
Chief Executive Officer of Belujane Konzult, Mr Chris Aligbe, in this concluding interview, dismisses reports that botched Nigeria Air deal was a complete fraud.
Aligbe, who argues that without a national flag carrier, the country’s airline sub-sector will continue to struggle, urges the Federal Government to revise the agreement Nigeria has with Ethiopian Airlines because given how the country’s domestic airlines are structured, they “will never make it.”
Issues with Nigerian airlines
Our airlines have no corporate governance, no due diligence, nothing. Their finances are not what they should be. All their books are in the red. I do not want to talk about it because they think you are demarketing them. If they feel demarketed, let them respond.
They will complain about the conditions in Nigeria. When there was war in Ethiopia, Ethiopian Airlines, through the help of Nigeria Airways, moved its headquarters to Nairobi from Addis Ababa. Government did not interfere. Ethiopian Airlines stayed afloat. It made gains. It kept operating.
As operators, it is required that you wake up and think about how to combat challenges before you. When you are setting up, you look at the challenges ahead. You have to ask specific questions such as what is the trajectory at this point? What are we likely to encounter? In Nigeria, they will say there are challenges and difficulties in the country. I do not believe that. You need people who know how to manage an airline, and who know what is involved in running an airline to come together. You need tremendous corporate governance. You need financial outlay.
No private airline is rated globally. We want to build a hub, there is no such private airline or group of private airlines that can build a hub in Nigeria and no foreign airline can build a hub. I am speaking about the kind of foreign airline investment that will expand your network automatically and you begin to build a base for interlining passengers. No matter what, these people flying from point-to-point will never build a hub for our country. And no private airline will build a hub for us. They will fly in, take their money and go.
Legacy airline
These are the three schools of thought. In Nigeria, we have practised the first one and it failed. It failed us for very obvious reasons. However, we have not practised the second one (national flag carrier) where you have a legacy airline coming to invest. We were to do it with Nigeria Air but didn’t happen.
At one time Captain Joji wanted to do it but he lived ahead of his time. That didn’t work. That is the privatisation of 1992-1993. Since then, it has been individual airlines and family airlines such as Okada, ADC, Kabo, Flash, Bellview, Medview and Arik among others. All of them were individually owned. ADC was owned by three captains that left Nigeria Airways. Of all the airlines, none of them has successfully sold their shares to the public. The three that went failed. Medview, ADC and the airline by Marwa. The three airlines went to the stock market and they all failed, leading to loss of money among investors. This is the situation.
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Can Nigerian airlines be successful with all of these things that you have said?
We cannot make it the way we are. I will say it for whoever wants to hear and whoever wants to get angry should get angry. We will never make it. We will not build a hub with what is happening. Whatever we are talking about hub, we will not succeed because the airlines we have are not the airlines that build hubs. They do not have the capacity. How many aircraft are they going to get? I told you about Riyadh Air starting with 50 aircraft by 2025. It was unveiled the same day Nigeria Air was unveiled and the aircraft didn’t belong to them. The aircraft belonged to Boeing. It was Boeing that flew in the aircraft and painted in their colour. After the unveiling, they took it back.
A similar thing happened with Nigeria Air…
Yes yes. There is so much ignorance. The truth of the matter is that what stopped Nigeria Air is the court. The case that went to court. When the case was already in court, Ethiopian Airlines said we are a reputable global organisation and until the case clears, we won’t continue.So, what were the mistakes?
I am not saying there might not be mistakes, but those things could be cleared and handled without blocking the process. It was not government that blocked the process, but Airline Operators of Nigeria, AON, specifically three operators. One is not an operator but a member of the AON. That is TopBrass.
Azman, United and Air Peace went to court. TopBrass joined them. It was the case in court that stopped Nigeria Air from taking off. It is not any fraud or whatever that stopped it. They were already training six pilots that would fly the first three aircraft because Nigerian pilots, not foreign pilots are required to fly for Air Operator Certificate, AOC, purposes.
They were already positioned to acquire three MAX. They were going to acquire three 737 MAX. Two of them were brand new. One of them had flown for six months. It was a Canadian company that was giving it back. But the company to lease said they would not lease any aircraft to any Nigerian company but Ethiopian Airlines. At that time, Nigeria was still blacklisted. I do not know what would have happened now that we have exited the blacklist. I followed the whole process because I believe that Nigeria should have a national flag carrier right from my days In Nigeria Airways.
It has been claimed that everything about that deal was a fraud…That is the story sold to them. There was so much media manipulation and financing of media reports.
Seamless travel
What do we do to ensure that Nigerian passengers travel seamlessly? RwandAir is increasing its flights to Nigeria. Nigerians leave here for Uganda and Uganda Airlines is 100 per cent owned by the Uganda government. We complain that the way Nigerians are being treated by these airlines is bad. Are we going to continue like this? Are we going to continue leaving our market to all these people and become a complainant nation?
BASA routes
First, it is untrue that ET was coming to take over all our Bilateral Air Service Agreement, BASA, routes. No airline can do that. The fact of the matter is that there is so much in the public domain that is untrue but I do not want to engage in it.
Agreement
What I think about the agreement is that 49 per cent was too high. 35 to 40 per cent would have been good. The next thing that talks about positions. There are two or one position that is reserved for Nigeria – Human Resources and Manpower Development. They (Ethiopian Airlines) took finance and I can understand that because even when KLM invested in Kenya Airways, the position of Director of Finance was reserved for KLM. They did not bring anybody from the Netherlands but said the person that will occupy the position must be approved by KLM. It could be a Kenyan. It could be any nationality but that individual must be approved by KLM. For engineering, there is no way we could have been in charge. You know why? We have no engineers trained on 737 MAX. Ethiopian Airlines uses very modern equipment – Dreamliner and MAX. The plan was that within one year, they will increase that three to about six or seven and bring in three or four Dreamliner for international operations. Under Nigeria Airways, we had excellent engineers. Some of the best. World class engineers. There could still be a few of them here and there. One of those that I remember is the guy that died as well as one lady and her husband. What I am saying is that the engineers that would have been required would be type rated. Nigerians could be trained on that but you won’t take somebody who was to undergo training to become the Director of Engineering. There was a need to get a seasoned person to be a Director of Engineering. All that should have been done was say for this position, we will stay with you for 10 years and within 10 years, you have trained an engineer that can do the job. But the only one that can never be taken from them is finance because they are an investor, their money is here. It should be stated that within this number of years, you must give them up because Nigerians must have been trained to take over those positions.
When the last government named Dapo olumide as a start-up team, I said they had done the best thing because Dapo Olumide is number one in terms of airline management. Nobody can take it from him. Anybody who says he is ahead of him should say it. I thank God I am not a Yoruba so they won’t say it is Yoruba irredentism. Dapo Olumide is straight, clean, schooled and he is good. He went to Embry-Riddle, where he has a degree. He has worked in African Finance Corporation, AFC. He has run Aero. He was the Deputy Managing Director of Aero. I believe that they can tweak the management structure. They can say, look, you are starting this. You have five years to establish this, but put a Nigerian under you. For instance, let a Nigerian be there as MD/CEO. If a Nigerian is there as MD/CEO, you can cede chairmanship of the board. And if Ethiopian Airlines pick an MD/CEO, chairmanship of the board should be a Nigerian. And under him will be somebody groomed to take over. Dapo Olumide who would have been there could become the Chief Operating Officer, COO. As the COO, he must be the Nigerian face representing. There were so many things that could be tweaked about it.
Profit
As an investor, when there is profit, they would take theirs and Nigeria would take its own percentage. Also, I know that there was no plan for a wet lease. It was a dry lease. The airline was supposed to employ fully Nigerian pilots. Fully, Nigerian cabin crew and train engineers. Nigerian engineers are fast learners. There is much narrative out there and I am not attacking anybody but all I am saying is how can we make sure the Nigerian air travel passengers have a seamless travel with their own airline? Unless we establish a good national flag carrier, not these domestic airlines that when they cancel flights at the local level cannot transfer you to another flight. There are two sectors that have attained globalisation in the world – telecommunications and the airline.
Agreement
Although I have not seen the agreement, let me tell you what I am very okay with: I am very okay with the platform. Nigeria equity, Nigerian government equity, limited equity, 5 per cent or no more than 10 per cent. International airline of note investment and then Nigerian investor. That is the template. That template is what I am fully in support of. Whether it is Nigerian airline or Nigerian whatever, I am fully in support of that template. I am not in support of any national carrier because I do not belong to that school of thought. An airline 100 per cent owned by government should never happen because we cannot run it. It has failed us. Are we talking about private airlines going international?
Have we not gone through it? It has failed us. Arik was there and Medview. They will say they never got any support. The minister is giving them support which is valid. But the one I belong to is government’s minimum equity, international airline of note investing and Nigerian equity holders. All I am saying is that unless we do this, we will never get Nigerians traveling seamlessly on our own aircraft, on our own airline. We will never build a hub. We will do all these things in the next four years, yet we will not create employment. I would like to see how many people will be employed. I do not see them dry lease up to 10, 12 aircraft in the next three years. I do not see them creating direct employment that is going to be up to 300. An airline like Nigeria Air, under that template, would have done that, and would do that better, and we would have a trajectory for growth. What is our operational standard in this country? What is our benchmark in this country?
Some have said if domestic carriers are given an enabling environment to thrive they will do better than Ethiopian Airlines…
Supported how? Was Nigeria not enjoying dry lease before? Up until 2017, Medview and others were on dry lease before First Nation and TopBrass destroyed it. There is no corporate governance.
We have tried to tell them to link up, have they accepted it? AWA has put in place corporate governance and that is what is keeping it. If you have corporate governance, you are beginning to look at people coming there.
Even for codeshare, before these airlines come, they will do due diligence. You must open your books. They must know what you are offering. How many airlines are prepared to submit their books for international due diligence? How many? Well, Nigeria Air would have given us something like that.
Source :Vanguard
