FG insists on Nigeria Air suspension

The Federal Government has said the controversial Nigeria Air project remains suspended as the Minister of Aviation and Aerospace Development, Festus Keyamo, awaits President Bola Tinubu’s decision on the contentious project.

The Special Assistant to the Minister of Aviation and Aerospace Development, Tunde Moshood, who reiterated the government’s stance on Monday, spoke while reacting to Ethiopian Airlines’ latest comment on the matter.

“They can say, whatever they like, but as far as we are concerned the project is under suspension and the Honourable minister is awaiting Mr President’s verdict on it. They can say what they like but our current position on the matter is what I just said to you,” Moshood said while reacting to the Ethiopian national carrier’s comment on the matter.

The Ethiopian Airlines Group Chief Executive Officer, Mesfin Tasew, had told a news outlet, Ethiopian Tribune over the week that the Nigerian government was no longer interested in the project.

“The Nigerian government has lost interest in partnering with a foreign airline,” Tasew said.

The announcement by Ethiopian Airlines came barely two months after the Federal Government reaffirmed the indefinite suspension of the controversial Nigeria Air project.

Keyamo had previously criticised the deal with Ethiopian Airlines as unfair to Nigerian airlines, stating it would be irresponsible for the Federal Government to allow a foreign entity to monopolise Nigeria’s aviation industry, thereby compromising the growth of local businesses.

Former President Muhammadu Buhari’s administration announced the Nigeria Air project on July 18, 2018, aiming to revive the defunct Nigerian Airways.

In August 2023, Keyamo announced that the national carrier project was suspended till further notice stressing that he owed it to the government and Nigerians to give an honest assessment.

The project unveiled three days before the end of Buhari’s administration had elicited concerns among stakeholders nationwide over the ownership arrangement which gave Ethiopian Airlines a 49 per cent equity stake.

The Federal Government had a five per cent equity, while a consortium of three Nigerian investors had 46 per cent.

However, two months later, it was suspended due to concerns about its relevance and sustainability. The airline was projected to incur $8.8m in preliminary costs and $300m in take-off costs.

In 2022, Ethiopian Airlines won the bid to manage Nigeria Air, agreeing to a structure where they would hold a 49 per cent stake, the Federal Government five per cent, SAHCOL 15 per cent, and other investors 31 per cent.

Reacting to the deal in June 2023, the House of Representatives asked the Federal Government to suspend the Nigeria Air project, describing it as a fraud.

In an interview last year, Tasew said the airline would reject any decision by the Federal Government to either suspend indefinitely or resume the national carrier project.

Tasew, who stressed that the East African carrier did not initially show interest in participating in the Nigeria Air project, said the decision to submit a bid for the national carrier venture came after the Federal Government officially wrote the Ethiopian Airlines seeking its partnership to establish Nigeria Air.

He, therefore, said the airline would comply with whatever decision the Nigerian government reached on the suspended national carrier project.

He said, “In the first place, the national carrier project was not our initiative, it was the initiative of the Nigerian government. Now if the government wants us to cancel the project, it is fine with us. We have no problem. If the government wants to continue with the project, then the government has to resolve the legal case in court.”

However, the airline has continued to develop its multi-hub strategy in Africa.

Tasew emphasised the setback would not stop Ethiopian Airlines, a Star Alliance member, from developing JVs to establish sister airlines in Africa where Ethiopian Airlines has equity stakes.

“We have been approached by several airlines in Africa for support, and we are evaluating them,” Tasew said.

The countries include the Democratic Republic of Congo as well as Equatorial Guinea.

Meanwhile, the airline official said Togo-based ASKY, in which Ethiopian holds a 40 per cent share, and Malawi Airlines, which was Ethiopia’s first JV, continue to do well. Zambia Airways—in which Ethiopian Airlines holds a 45 per cent share—is also continuing to develop.