Ethiopian Airlines’ stake in Nigeria Air, an existential threat to aviation sector –Aviation Stakeholders

As the Federal Government wraps up plans to flag-off the national carrier, Nigeria Air, stakeholders in the aviation sector have expressed concerns over the choice of Ethiopian Airlines as a core investor in the airline.

Recall that a month ago, the federal government, through the Aviation Minister, Hadi Sirika, announced Ethiopian Airlines as a core investor for the proposed national carrier, Nigeria Air, following a successful bid.

Sirika said the airlines will have 49 percent equity while Nigerian private investors (SAHCO, MRS and other institutional investors) have 46 percent and the Federal Government five percent.

However, the choice of Ethiopian airlines and the equity percentages have since elicited various reactions, as some stakeholders think this would pose an existential threat to the domestic carriers and the entire aviation sector. They allege that the airline is putting nothing, or very little, on the table as Foreign Direct Investment to own 49 percent of one of the world’s largest markets, Nigeria.

There are also concerns that Nigeria will still be paying Ethiopian Airlines for aircraft leasing, engineering, crew and management; an arrangement that may not be sustainable.

Already, Ethiopia Airlines has listed Nigeria Air as one of its subsidiaries on its website, a development that has left many asking questions as to why Nigeria Air is a subsidiary to the airline, instead of a partner.

This position was also echoed by other members of aviation industry stakeholders, who insist that Ethiopian Airlines have consistently remained a threat to Nigeria’s domestic airlines. According to them, what those in the administration of the Nigeria’s aviation industry are doing is to give to the airline what belong to Nigerians; jettison the commercial agreements on multiple frequencies outside the Bi-lateral Air Services Agreement, (BASA), which in the days of Nigeria Airways was fetching about $80 per passenger and open up the markets on the domestic routes to the foreign airlines especially to Ethiopian Airlines.

The stakeholders have said Nigeria cannot share or continue to give to its competitors the foreign airlines its commonwealth. However, it has been suggested in some quarters that Nigeria can look outside its BASA for partnership to set up a national or flag carrier and get credible technical and investment partners from Canada and Australia.

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