The Nigerian House of Representatives has questioned the nature of the Nigeria Air-Ethiopian Air deal, asking for a detailed explanation of the various stakes in the new airline, including the ownership structure and the dangers of monopoly.
This was disclosed by the House of Representatives Committee on Aviation at a public hearing on Thursday in Abuja.
Minister of Aviation, Sen. Hadi Sirika, told the House that the Federal Government was allocated only 5% ownership because stakeholders do not trust the government’s capacity to handle businesses.
What they said:
Rep. Preye Oseke (PDP-Bayelsa) said that Members were baffled by the type of business model that gave Nigeria only a 5% stake in the Nigeria Air project. He then asked for a detailed explanation of the various stakes in the new airline, including how Ethiopian Air emerged as the preferred bidder.
The Chairman of the committee, Rep. Nnolim Nnaji (PDP-Enugu) warned that Ethiopia is a competitor to Nigeria and that Nigeria is giving too much advantage to the East African airline. He also noted that “the traffic is in Nigeria and that Nigeria is not doing well today does not mean it cannot do better tomorrow.”
The Vice President of the Airline Operators of Nigeria (AON), Mr Allen Onyema agreed with the lawmakers. He noted that AON “has tried everything possible to access the Nigerian market both frontally and from behind; they started with Dana using Asky.”
He then urged that Nigerian Air should become a full Nigerian investment, explaining that the way Ethiopia was coming would not benefit Nigeria.
Meanwhile, the Minister of Aviation, Sen. Hardi Sirika, explained to the committee that 5% of shares are for the Nigerian Government, 59% for the Ethiopian Airline consortium, and 46% is for Nigerian investors.
He said the shares were allocated like that because business stakeholders do not trust FG’s capacity to manage the business well, as seen in the case of Nigerian Airways.
He added that if the proposed airline was structured and run like the Ethiopian Airline which is 100% owned by the Ethiopian Government, it would do well, citing that “5% was to ensure the airline had a sovereign funder and to boost investors’ confidence”.
- “From all the submissions we received, we have identified partners and investors and we are currently negotiating and processing the Air Operator Certificate (AOC).
- “I want to commit here that between now and the end of the year this airline will work.”
What you should know
- Nairametrics reported earlier this month that the federal government reiterated that its partnership with the East African carrier, Ethiopian Airlines for the proposed national carrier, Nigeria Air, would be a win for the country.
- Minister, Sirika noted that even if Nigeria has had some sordid experiences with the formation of a national carrier in the past, the deal with Ethiopian Airlines would be a different experience for the country.
This deal should.not be allowed to fly, Aviation minister and all involved has sold Nigeria to Ethiopia. How can you give absolute power to your competitor to run a joint business. Failure on arrival. The people handling this deal are more concern about what they will get from this deal and not what Nigeria as a country will get. That is why they bypass our local carrier and go for Ethiopia Airlines. Over to our legislator, we trust you will not let Nigeria waste another time and resources on this.