Nigeria cedes top positions, 49% equity to ET
-Relationship amounts to shareholding, not partnership
-Nigeria may not have representation at global and regional aviation forums
-Only ET responded to us —Sirika
The agitations and prophetic projections of Nigerian aviation stakeholders that ETHIOPIAN AIRLINE involvement in Nigeria’s national carrier portents enslavement appear being realised too soon.
This follows the Organograme of the Nigeria Air proposed by ETHIOPIAN AIRLINE team in the recently concluded meeting with Nigeria Air team in Abuja. As can be seen in the Organogram all the commanding positions; CEO, DIRECTORS OF FINANCE, COMMERCIAL, ENGINEERING as well as the key positions of Purchasing, Cargo sales and Quality Assurance are held by ETHIOPIAN AIRLINE.With these positions ETHIOPIAN AIRLINE will drive the life, growth and progression of Nigeria’s National Carrier. Added to this travesty is the fact that the Nigerian Nation will have no representation at global and regional aviation forums as it will be represented by ETHIOPIAN Air Nigeria CEO AND COMMERCIAL DIRECTOR. Yet ETHIOPIAN AIRLINE is holding 49% equity against Nigeria’s .51% equity.
The relationship is not a Patnership, not a Management Contract but Shareholding. It follows that if ownership and management of Nigeria Air are not SUBSTANTIALLY Nigerian, as the proposal has revealed, Nigeria Air many not be allowed to fly into United States as it happened to Virgin Nigeria.
Stakeholders had strongly disapproved the said partnerships with ET, describing it as a ‘national embarrassment’. Now their fears appear real with the meeting in Abuja.
A breakdown of the deal shows that Ethiopian Airlines will be holding 49 per cent of Nigeria Air’s shares, while a consortium of Nigerian investors would have 46 per cent; and the Federal Government would have five per cent.
Again, indications are that ET will weaken Nigeria Air with ASKY Airline US bound passengers if at all Nigeria Air will be flying to US.
Meanwhile, stakeholders have decried the almost insignificant Nigerian ownership of the new national carrier, as the airline is operating under wet lease.A wet lease is an arrangement covering the hire of an aircraft including the provision of flight crews, fueling amongst others.
An authoritative source from the federal government had disclosed that with 49 per cent equity against Nigeria’s 51 per cent equity, ET has all four most critical top management positions.
The positions according to the proposed organogram made available to Saturday Vanguard, include the Chief Executive Officer, Directors of Finance, Engineering and Commercial. The source also disclosed that ET will also be in charge of purchasing, quality assurance and cargo sales.
According to the source, “Nigeria’s national carrier will be innocuous, subordinate which I see as enslave-ment; this arrangement will be a national shame and disaster if it’s allowed to run the way our people have negotiated.
“As it is the airline may not be allowed into US as its entire ownership and management run foul of our open skies agreement with US. The airline may also face limitations in the United Kingdom, and other countries where ET has multiple flights.
“Ethiopia knows this but its objective is to impair Nigeria air so its ASKY in Togo will run the United States route fed by Nigeria passengers. It is high-wire mischief.
“Nigeria aviation stakeholders and professionals have consistently warned of this danger to deaf ears. It is quite sad that while Ethiopia came to the negotiation with top-flight international finance &legal consultants Nigeria left its professionals and appointed people of no aviation consequence to sit on negotiating table.
“The Federal Executive Council, the National Assembly, and the aviation unions must rise up and reject this enslavement and national shame. Presidential candidates and their parties should send very strong signals against this national embarrassment.”
Only ET responded to our EoI —Sirika
In reaction to stakeholders’ disapproval of ET partnership, the Minister of Aviation, Hadi Sirika, stated that apart from being one of the biggest and most efficient airlines in the world, Ethiopian Airlines was the only airline that responded to its requests for expression of interest and fulfilled all the stipulated conditions laid down by Nigeria to be picked.
He said: “We did not cede Nigeria Air to Ethiopian Airlines. It is the only airline in the world that made $1 billion profit even during Covid-19 pandemic. It is the most prosperous, efficient and leading airline in the African continent and it was the only airline that responded to our request for partnership to run the airline after many months of advertisement of expression of interest.
“Even after some interested persons asked Nigeria to extend the time of EoI and we did, none of them showed interest. Despite the fact that officials of the ministry of aviation led by me personally visited some of the leading airlines across the world and pleaded with them to take up the partnership with Nigeria to set up the airline, none of them signified interest except Ethiopian Airlines, which has been allotted 49 percent shares while Nigerian institutional investors take up 45 percent while the federal government will take up only five percent.
“The choice of Ethiopian Airlines is good for Nigeria and it is in line with the African Union Agenda and spirit and to take advantage of the over 1.2 billion population in Africa. Our desire is for Africa to come together and lead the African aviation market through our new partnership with Ethiopian Airlines. The partnership will also reduce cost of operations and air fares for Nigerian and African air travellers as opposed to the current situation.
“Contrary to what people think, let it be known that Ethiopian Airlines emerged as the preferred partner of Nigeria Air through a transparent and credible process that cannot be faulted because we want the project to succeed so that Nigeria can have an airline that does not suffer the fate of the former Nigeria Airways.”
Aviation experts react
Commenting on the development, Aviation Expert, Olumide Ohunayo, stated that, “Of all the seven airlines in Africa that ET has shares, only ASKY operates beyond the domestic route, the remaining (Chad, Mozambique, Zambia, Congo, Guinea and Malawi are glorified Local carriers). ASKY has 12 aircraft in 12 years.
“The federal government has given multiple false start date for this airline and we have two of such dates this year that have failed. Also, part 9 of the Air Operator Certification and Administration 9.2.3.2 states that a new start-up airline must have a minimum of 3 aircraft, and must be Nigerian registered. Yet we are told they are going to wet lease, later damp lease aircraft to start. So why breech the ACT from incubation what happens later?
“The playing field was not level abinitio. Virgin Nigeria was stopped from operating into the US because of 49 per cent ownership by Virgin Atlantic hope this will not play out again for some countries. “Virgin Atlantic offered 10 per cent shares to Nigerians as reciprocity for the investment in Virgin Nigeria. What is ET offering as reciprocity?
“Why did ET, Egypt Air, and two local airlines and other investors bid for the Ghanaian national carrier and only ET had bid for Nigeria despite the huge market and potentials?
Also, a former military airport commandant, Capt. John Ojikutu said: “Our competitor should not be our partner or part owner. If it does our interest becomes subordinated and the competition disappears.
“What I believe we have with Ethiopian Airline is not a partnership but commercial agreements on our Bi-lateral Bilateral Air Service Agreement, BASA, routes, the national interest comes first for each of the partners.
“I said earlier that how to ensure the 49 per cent equity will be the foremost interest of the Ethiopian airline on BASA routes.
“Most passengers on Ethiopian airline are transiting Addis Ababa not destined there; so, transiting passengers must pay the price in addition to the airfare; that is a plus for the country.
Do we have such in Lagos for those transiting on Ethiopian Airlines? Go for partnership with airlines that are not competing with us on the BASA routes is my gospel.”
