FG insists on suspension of Nigeria Air

The Federal Government has stated that the controversial Nigeria Air project remains on hold while the Minister of Aerospace Development, Festus Keyamo, awaits President Bola Tinubu’s decision on the controversial project.

Special Assistant to the Minister for Aerospace Development Tunde Moshood, who reiterated the government’s stance on Monday, responded to Ethiopian Airlines’ recent comment on the matter.

“They can say what they want, but as far as we are concerned, the project is on hold and the honorable minister is waiting for the president’s verdict. They can say what they want, but our current position on the matter is what I just told you,” Moshood said in response to the Ethiopian airline’s comment on the matter.

The CEO of the Ethiopian Airlines Group, Mesfin Tasew, told the news channel Ethiopian Tribune during 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.

Ethiopian Airlines’ announcement came barely two months after the federal government reiterated the indefinite suspension of the controversial Nigeria Air project.

Keyamo had previously criticized the deal with Ethiopian Airlines as unfair to Nigerian airlines, saying it would be irresponsible of the federal government to allow a foreign company to monopolize the Nigerian aviation industry and thereby endanger the growth of local companies.

The administration of former President Muhammadu Buhari announced the Nigeria Air project on July 18, 2018, with the aim of reviving the defunct Nigerian Airways.

In August 2023, Keyamo announced that the national carrier project was suspended until 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 term, had raised concerns among stakeholders across the country about the ownership structure, which gave Ethiopian Airlines a 49 percent stake.

The federal government held five percent of the shares, while a consortium of three Nigerian investors held 46 percent.

Two months later, however, the plan was suspended due to concerns about its relevance and sustainability, with the airline facing upfront costs of $8.8 million and launch costs of $300 million.

In 2022, Ethiopian Airlines was awarded the contract to manage Nigeria Air, agreeing to a structure under which the company would hold 49 percent of the shares, the federal government five percent, SAHCOL 15 percent and other investors 31 percent.

In response to the deal, the House of Representatives in June 2023 called on the federal government to suspend the Nigeria Air project, calling it a fraud.

In an interview last year, Tasew said the airline would oppose any decision by the federal government to either suspend or restart the national airline project indefinitely.

Tasew stressed that the East African airline had initially shown no interest in participating in the Nigeria Air project. He said the decision to bid for the national airline venture was made after the federal government officially wrote to Ethiopian Airlines requesting a partnership to form Nigeria Air.

He therefore said that the airline will comply with any decision of the Nigerian government regarding the suspended national carrier project.

He said: “First of all, the national carrier project was not our initiative but that of the Nigerian government. If the government now wants us to cancel the project, that is fine with us. We have no problem with that. If the government wants to continue with the project, it will have to resolve the legal dispute in court.”

However, the airline has further developed its multi-hub strategy in Africa.

Tasew stressed that the setback would not stop Ethiopian Airlines, a member of Star Alliance, from establishing joint ventures to create sister airlines in Africa in which Ethiopian Airlines would hold stakes.

“Several airlines from Africa have contacted us asking for assistance and we are reviewing these offers,” said Tasew.

The countries include the Democratic Republic of Congo and Equatorial Guinea.

Meanwhile, the airline representative said that Togo-based airline ASKY, in which Ethiopian holds a 40 percent stake, and Malawi Airlines, Ethiopia’s first joint venture, are continuing to do good business. Zambia Airways, in which Ethiopian Airlines holds a 45 percent stake, is also continuing to perform well.