There are strong indications that Ethiopian Airlines may soon pull out of the deal with the Federal Government on Nigeria Air.
A source close to the airline told Nairametrics that the East African carrier has expressed dismay at the high level of negative publicity its involvement in the project has generated since the announcement was made in September.
Our correspondent learned that Ethiopian Airlines is also worried that the raging controversies may damage its reputation, hence the reason it is considering pulling out of the deal. The source said:
“If this information gets to the Ethiopian Parliament, there is a possibility that the airline may back out and, don’t be surprised that they will come out with a statement soon because they are also joined in the suit. I don’t think they will want to get involved in any controversies as they will want to save opportunities for future dates.
“Also, I think it is still possible to have Ethiopian Airlines or any other statutory investor, but not in this arrangement. If you bring them in at a lower percentage, there will be equity partners, which will just be in cash. With this arrangement, they will continue to bill you and send invoices to you. So, it will become a conduit pipe.
“If a proper arrangement were to be reached with a Gulf carrier or any other, there will be a focus on the international market, not the local market. Nigeria lacks capacity in the international market. We need a mega carrier that has reach. With this, Ethiopian Airlines will sell Nigeria through Addis Ababa, instead of selling from Nigeria as a secondary hub.”
The controversies: As earlier noted, FG’s plan to establish Nigeria Air whilst using Ethiopian Airways as a technical partner has been met with fierce backlash from aviation stakeholders. Recall that on Monday, November 15, 2022, the Airline Operators of Nigeria (AON) filed a suit challenging the re-establishment of a new national carrier.
The minister of aviation, Sen. Hadi Sirika, had promised in September that the new national carrier would start operations in December with three leased aircraft. But the AON, the umbrella body of domestic airlines in Nigeria, challenged the government at the Federal High Court in Lagos.
Amid the controversies and sensing the possibility of Ethiopian Airlines pulling out of the Nigeria Air project, the Ministry of Aviation through its lawyers approached the AON, last week, to withdraw the case it instituted against the airline out of court.
But Nairametrics understands that the AON has yet to give a favourable response to the ministry’s appeal. Our source said:
“The latest is that the ministry’s lawyers contacted our lawyer and wanted us to discuss and see the possibility of withdrawing the case out of court.
“I told my colleagues that they should not be deceived by any approach or appeal from the ministry. Hadi Sirika (the minister of aviation) is someone I know so well. He will pull the carpet off your feet when you least expect it. He will come out with a Plan B, which will work against you in the long run. I told them to be vigilant.”
Last week, Hon. Justice Lewis-Allagoa, the presiding judge of the Federal High Court in Lagos, gave an order of interim injunction restraining the defendants, Nigeria Air Limited, Ethiopian Airlines, Sen. Hadi Sirika, and Attorney General of the Federation, to maintain the status quo on the national carrier project.
Court injunction in order: Engr. Femi Adeniji, the CEO of Florida-based NIGAME Aircraft Consultancy Incorporation, said the AON has taken the right step by approaching the court on the legality of the Nigeria Air project.
Adeniji also said that with the skewed arrangement and the legal step taken by AON, the national carrier may not take off as planned.
According to him, right from the outset, the project was lacking in transparency, adding that Ethiopian Airlines’ 49% stake in the airline gave the East African carrier all the benefits not available to the Nigerian domestic operators.
Adeniji canvassed the same rights or privileges granted Ethiopian Airlines ET in the Nigeria Air project to be given to the domestic operators in order to create a balance in the system.
He explained that Ethiopian Airlines has always operated as a competitor to Nigerian airlines with multiple designations into Nigerian cities granted it by the Nigerian government.
“Why is this government all bent on the project? Is there any hidden agenda? To me, bad advice is the cause of all this. The corrupt intent would not allow the expertise working with the minister to give sincere business advice,” he said.
Download Nairametrics App for breaking news and market intelligence.