Aligbe: Nigeria’s Aviation Can’t Develop without National Carrier
Contrary to the views expressed by some aviation stakeholders that Nigeria does not need a national carrier, the CEO of Belujane Konsult Limited, Chris Aligbe reasons that a carrier will be the fulcrum for the development of air transport in Nigeria. He s
Performance of Domestic Airlines
Since 1986, close to 30 years since the aviation industry was deregulated and private airlines came into existence, what has been the contribution of private airlines to the national economy or to the growth of the industry?
There is nothing to write home about in terms of their contribution to the growth of the industry.
From the records, over 32 domestic airlines have collapsed since the liberalisation in 1986 and what do we have today, what is their capacity, what has been their growth rate, what is their current position? And so those who are saying that we don’t need a national carrier are not doing their studies very well. Is it the present unfavourable situation that we have that they want, where passengers are always abandoned at the airport, even in domestic operations? Cancellation is the order of the day.
These days flight delays are things you must expect if you are an air traveller. You prepare yourself for these delays; sometimes you are coming back to your destination by 12 midnight when you should have arrived at 7 pm. Operationally we are nowhere in the industry and there is nothing put in place for the airlines’ growth. There is nothing put in place for them to correct this position. All that every one of them wakes up to tell you is that if government can put good policy in place. What is the policy that you are asking government to put in place? They don’t have the foggiest idea.
They will mention aviation fuel and say the cost is too high, multiple taxation, these are not policies, these are things you take out, even when you take them out the airlines will still not do well for the simple fact that the airlines constitute the problems themselves. First, ownership, the owner-manager syndrome is still plaguing all the airlines. And most of the domestic airlines think alike, except Medview Airline which the owners are seeking private placement and have gone to the Stock Exchange to discuss about putting the airline on the open market.
Medview Airline has been told what to do by the Stock Exchange. I don’t know of any other airline trying to do that. It is this way that a formidable airline could be built. I have always said this country needs two or three very strong airlines for us to be able to face the challenges from foreign airlines. But when you look at it they are problem to themselves and until they begin to remove the log in their own eyes they cannot talk about the specs in the government’s eyes.
Until they come to realise that the way they are they cannot make any progress, so the country cannot make any progress. I read some of them saying, funny enough, like the interviews I read that multiple destination, multiple entry in the country is causing them some problems; that what should be done is that airlines should be allowed to come into one or two entry points in the country and then domestic airlines can now distribute passengers. Formidable Airlines
Domestic carriers are not thinking of being formidable airlines; they want to be distributor airlines. All that they are saying is, allow foreign airlines to come into Lagos, allow foreign airlines to come into Abuja so that we can position ourselves to distribute the passenger to other airports in Nigeria and West Coast. They want to assemble passengers for foreign airlines to take; that is not the kind of airline industry that we are looking for. Why should Ethiopian airline even fly into Abuja or Lagos and allow any Nigerian airline to take its passengers beyond the West Coast when Asky is there which it has funded?
Today airline operational standards should be seamless. If any foreign airline is bringing its passengers to transfer to you, your standards will be as high as that airline. Your level of operation, your services should measure with what they are offering. There is no domestic airline that measures up to that point, so no foreign airline will put its passengers directly in your own airline because if anything happens that passenger will sue them. So these are the things we need to understand, if any accident happens the passenger will not claim from you, it will claim from the foreign airline.
Our airlines are not seamless because of our low operational standards, so foreign airlines cannot partner with us. This is what we should understand. National Flag Carrier vs Flag Carrier
A flag carrier out of a country is a carrier owned by either an individual or a group of individuals but ownership is not open to the generality of citizenry. So it belongs to a person or group of persons. It flies out of the country it is a flag carrier out of Nigeria. A national carrier, is derived from the concept of nation, a sovereign entity, represented ether by a government or represented directly by individuals, citizens of that country. So ownership becomes national when government is holding it in trust for the people. That was how airlines arose.
All the national carriers of the past were state equity, state holdings. Who is the state? It is the government that represents the state. So government is holding it in trust for the people. A nation is defined as a people within contiguity, a contiguous state, with boundaries and with rights to govern themselves. So when citizens of a country own a particular product-an airline- it is national because the ownership is national. Example of this is the defunct Nigeria Airways. That is what Ethiopian Airlines is, that is what is what South African Airways is, and that is what Egypt Air is. But then you have the other side where the government doesn’t hold an equity, the citizens hold equity.
We don’t have that type in Africa, you have it in UK. They are beginning to have it in Europe like Lufthansa. 88 per cent is owned by private investors and then you have others corporate investors. The country’s other institutions hold equity there but those institutions are private institutions where even the citizens have equity because it is open to the citizens. So when you find that it is owned by the citizenry and so it has the title of national because it is owned by the citizens of the nation and then once it happens that way it has sovereignty, a sovereign cover.
The sovereign cover deriving from that ownership makes it national; unlike a flag carrier that doesn’t have that kind of sovereign cover. You have typical examples in UK; Virgin Atlantic is a flag carrier. It is not open to British citizens for equity participation. Why British Airways is a British national flag carrier even if you put flag because it is owned by British citizens. So people should know the difference between that, then there is a middle one, a combination of state equity and citizens equity. The state is holding some percentage or equity 20, 30, per cent; it is open to the citizens to buy into it. Maybe the citizens are holding 40 per cent and maybe the next 30 per cent can be a foreign investor. But the majority of the equity is held by the citizens and the government and whatever the government is holding is in trust for the citizens.
Because there is no person who is government it is those who are elected that constitute the government and the government is elected by the people. Kenyan Airways is a perfect example of what I am telling you. I think Royal Air Maroc has this kind of arrangement; most airlines in Europe are in this arrangement. Air France, the state hasn’t given up its final equity. But the ones that are state fully owned are recent ones like Emirates, Qatar, Etihad, they are all fully owned by the state and the state is holding it in trust for the citizenry. And anybody who tells you that the idea of national carrier stopped in the 60s and 70s has a false sense of history completely.
The only area where state never held stake in any airline is in the US ab initio. But airlines in the US are owned by US citizens whether corporate citizens or private citizens. Even Virgin America, when (Richard) Branson wanted to start it, it was at the same period of 2004 to 2005 when they were also establishing Virgin Nigeria. The US never allowed him to take off until 2012 because they had to subject it to all the due processes and they came up and said, sorry you cannot own more than 25 per cent stake, the remaining 75 per cent stake must be owned by US citizens and that is Virgin America. Virgin America is owned 75 per cent by American citizens while Branson owns 25 per cent.
But in our own (Virgin Nigeria), they called him gave him between 49 and 51 per cent, you don’t even know because it is shrouded in secrecy. Talking about airline privatisation, British Airways was the first to privatise. It was the first airline worldwide apart from the American airlines. This was during the Margret Thatcher administration in 1987 or 1988. She directed for its privatisation after putting about £100 million for them to clean up the mess that was there and then privatise it. And for so many years other airlines did not follow suit in fact Lufthansa followed suit in 1994. So people who say 1960 or 1970, they don’t know, it is false information that they are giving to the public. Modern National Carriers
Are they saying there are no such national carriers, when was Etihad set up? It is the year 2000, this current decade; it was not even in 2000, Etihad was established around middle of 2000. So they are still coming up, Kenyan Airways is trying to restart its own.