Despite Controversial Launch, Nigeria Air Set to Start Flying Passengers by October
- Ethiopian Airlines CEO has said Nigeria Air will be launched with a combination of two wide-bodied aircraft and six narrow-bodied aircraft
- Mesfin Tasew explained that the airline has a plan to repatriate $82 million of funds from Nigeria
- The Nigerian government will own 5% of the airline, while Ethiopian Airlines will hold a 49% stake
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Nigeria Air will begin operations in the nation of West Africa as early as October, working with institutional investors, the Nigerian government, and the Ethiopian Airlines Group.
This is coming after controversies that surrounded the launch of the airline. Recall that Legit.ng, in earlier news, gave an account of how the Nigerian government repainted an 11-year-old Ethiopian Airlines aircraft and presented it as Nigeria Air, the country's national carrier.
Source: UGC
According to Mesfin Tasew, CEO of Ethiopian Airlines, in a Bloomberg TV interview, the airline, to be called Nigeria Air, will launch with a combination of two wide-bodied aircraft and six narrow-bodied aircraft.
Nigeria Air to commence operations inspite of challenges
Ethiopian Airlines won the contest to launch Nigeria Air's operations in September 2022. However, Ethiopian Airlines has encountered opposition, including a legal challenge from local competitors who contend that Ethiopian Airlines has received an unfair advantage from the government that could harm their companies.
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In the most populated nation in Africa, where around 23 domestic carriers fight for influence, the proposed carrier will offer Ethiopian carriers, the largest airline on the continent, a footing. The government's attempts to launch a flag carrier in the past have been unsuccessful.
While Nigeria Air will be 5% owned by the Nigerian government, Zemedeneh Negatu, global chairman of Fairfax Africa Fund LLC, which is assisting the investors in raising money, said Ethiopian Airlines will hold a 49% stake in the new company, with the remaining held by Nigerian institutional investors, including MRS Oil Nigeria Plc, two businesses involved in the aviation industry, a big financial institution, among others.
Negatu refused to provide the investors' names but hinted that the Nigerian government would not buy its stake in cash.
Carrier optimistic despite unfriendly business environment
The nation’s carriers have struggled to remain profitable. Lack of access to foreign exchange, the high cost of aviation fuel, and various taxation regimes have all been problems for them. The only airline in the country that travels internationally is Air Peace.
Nigeria Airways, the country's former flag carrier, ceased operations in 2003 and was dissolved. A year later, a joint venture to launch an airline with Virgin Atlantic Airways Ltd. failed after the UK-based business left the venture due to differences with the Nigerian government.
While he noted its plan to repatriate $82 million of funds from Nigeria, Tasew added that Operating an airline in the country would not be without challenges.
He said:
“We have people who know the business culture of Nigeria. We believe we can manage and develop the airline.”
Ethiopian, which has the largest aircraft fleet in Africa, will leverage its 60 years of operational experience to help Nigeria Air lease jets at a lesser price, according to Fairfax's Negatu.
He claims that in order to assist lessors in financing the purchase of aircraft for Nigeria Air, the airline will also provide them with guarantees totalling $400 million.
Nigeria Air will launch service on 15 domestic routes before adding West African cities and international destinations like Shanghai, London, and New York.
Based in Washington, DC Fairfax has secured $250 million in equity financing for the airline and is debating accepting an additional $50 million from two large institutional investors, he said.
NCAA Reveals Why Nigeria Air Cannot Fly
Legit.ng earlier reported that the Nigerian Civil Aviation Authority (NCAA) rejected an application by Nigeria Air to proceed to the second phase of obtaining its Air Operators Certificate (AOC).
According to the letter dated June 2, 2023, the aviation regulator said due to the unavailability of a proper application form and other required documents, the approval process cannot move to the second phase.
Source: Legit.ng
