New national carrier to commence operations December – FAAN
The Federal Airports Authority of Nigeria (FAAN) has disclosed that the proposed national carrier will be operational by December 2018.
Mrs. Henrietta Yakubu, the General Manager, Corporate Affairs, FAAN, disclosed this yesterday on her facebook timeline.
On her facebook comment, she indicated that this decision was arrived at during a meeting in Abuja with minister of state, Aviation, Sen. Hadi Sirika, the transaction advisers and other stakeholders.
Those at the meeting, she said included the minister, the Permanent Secretary, Ministry of Transport, Alh. Sabiu Zakari, directors from the ministry, Director General, Infrastructure Concession Regulatory Commission (ICRC), transaction advisers and heads of aviation agencies. Journalists weren’t invited to the meeting.
The consortium of transaction advisers on the national carrier comprise three firms: Airline Management Group Ltd, Avia Solutions Ltd and Tianerro FZE.
The establishment of the national carrier has been in the works for a while and government has been struggling to set it up before May 29, 2019 as they previously promised.
Recall the minister had told journalists by March 2018, the outline business case for the national carrier would be ready. But that didn’t happen. Its not immediately clear if both the outline business case and full business case are now ready. The minister hasn’t publicly disclosed that.
“I will say that we are very close to having the national carrier established. Certainly it would be within the first term of this administration,” he had assured.
The architecture of the national carrier as recommended by the transaction advisers isn’t clear but the minister had said the national carrier will be private sector driven while the government provided the enabling environment.
However, the Ministerial Committee on the Establishment of a National Carrier had also recommended private sector dominance but also recommended the government should hold minority equity share.
Capt. Mohammed Abdulsalam, now rector of NCAT, the then chairman of the committee, had told our correspondent that government could have 5 percent equity holding.
“I don’t know how much percentage the government will eventually take but we recommended only 5 percent equity for government so government cannot influence decisions,” he said.
He, however noted that “government will provide the enabling environment and guarantees. Government will also hold shares in trust for the Nigerian investors since they can’t sell shares immediately to the public until after three years. So after three years, government will divest those shares.”
However, the entire architecture of the national carrier would need to be concretely established, investors need to be wooed, licenses need to be gotten and biddings have to happen for the national carrier to come into effect, if it must be private sector driven.
Industry watchers are worried that the time frame is short for a thorough job to be done and Nigeria can’t afford not to get it right now on the national carrier as the consequences will be significant on the industry.