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Thursday, November 30, 2023

Buhari’s government announces Ethiopian airlines as core investor in Nigeria Air with 49% shareholding

The Nigerian government under President Muhammadu Buhari has announced Ethiopian airlines as a core investor in the proposed national carrier Nigeria Air with a 49% stake.

The announcement was made by Aviation Minister Hadi Sirika on Friday, September 23, 2022, at a press briefing in Abuja.

According to him, Nigeria Air will be launched with a shuttle service between Abuja and Lagos to establish a new comfortable, reliable, and affordable travel between the two major airports and that other domestic destination will follow thereafter.

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The minister said Ethiopian Airlines will own 49 percent equity, the federal government will control five percent equity, while a consortium of three Nigerian investors (MRS, SAHCO, and the Nigerian Sovereign Fund) will have 46 percent.

The aviation ministry says it received a closed bid from the Ethiopian Airline Consortium in June, while other interested bidders failed to meet the deadline for bid submission.

“After a careful, detailed, and ICRC governed selection process, Ethiopian Airlines (ET) Consortium has been selected as the preferred bidder, offering an owner consortium of 3 Nigerian investors MRS, SAHCO, and the Nigerian Sovereign Fund (46%), FGN owning 5% and ET 49%,” the minister said.

Nigeria Air is the nation’s proposed national carrier which was unveiled at the Farnborough Air Show in England on July 18, 2018.

The project was suspended two months after it was announced after critics raised concerns over its relevance and sustainability. The proposed airline was expected to gulp $8.8 million preliminary cost and $300 million as takeoff cost.

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Nigeria’s defunct carrier, Nigeria Airways, collapsed due to corruption and poor management.

But the Nigerian government dismissed all concerns raised, saying the airline would begin operation before the end of 2018, following President Muhammadu Buhari’s promise to establish a national airline during his 2015 electioneering campaign.

In July, the Federal Executive Council approved the leasing of three aircraft to enable the airline commence operations on a date to be announced soon by the government.

Many Nigerians are still suspicious of the plan to launch a national carrier, partly with public funds, at a time the government is struggling to fund other essential services.

The minister said Nigeria Air is well on its way to being launched with three Boeing 737-800 in a configuration very suitable for the Nigerian market.

“The Request for Proposal (RFP) under the PPP act, governed by ICRC, is completed,” he added.

He said the consortium has been subject to a due diligence process, after which the contract will be negotiated between the consortium and the FGN, leading to a Full Business Case, which will be expected to be approved by the Federal Executive Council (FEC).

“We expect this process to take 6-8 weeks,” the statement said.

It said an interim executive team of highly skilled aviation experts has been working since February to set up all the necessary regulatory and industry requirements to launch the national carrier.

“All Executives have been approved by NCAA, the Air Transport License has been issued by NCAA, Nigeria Air (after having identified the first three aircraft) will now finalize all necessary Operation Manuals and then go through the inspection and approval process of NCAA,” the statement said.

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