The Federal Government is vehemently working towards re-floating its national flag carrier, which will be called Nigeria Air. It is, therefore, appropriate at this time for the government to peep into what other African countries are doing with their national flag carriers, with a view to shaping Nigeria Air and carving out a befitting niche for it, especially in view of the coming stiff competition in the market place, following the Open Skies Africa that may start operations anytime from now.
Ethiopian Airlines is undoubtedly the most successful and most efficiently run airline in Africa. It has been busy for some years and is now working on its strategy to face the competition if and when the Open Skies Africa makes a debut. Ethiopia Airlines has signed a shareholder agreement with Zambia’s Industrial Development Agency to resurrect Zambia’s national air carrier. As part of the agreement, Ethiopian Airlines will take equity participation in Zambia Airways.
The agreement which was made public recently was signed in January, this year. Recall too that Zambia Airways was liquidated some 24 years ago. Ethiopian Airline will own 45 percent of the new Zambian Airways, while Zambia will own 55 percent. The agreement also projects that Zambia Airways will be operating 12 airplanes by 2028.
Meanwhile, arrangements are ongoing to ensure that Zambia Airways begins operations this year. It will start with local and regional flights, while international flights to Europe, Asia and the Middle East will be added in due course.
Ethiopian Airlines is said to have invested $30 million in Zambian Airways. It is also discussing with some other airlines on the continent with a view to making its presence felt all over the continent. For example, it has concluded agreements to take about 49 per cent equity in Guinea’s rebranded airline, after it had been in decline for more than 15 years. It has also signed similar agreements with Chad, Mozambique and Equatorial Guinea.
Ethiopian Airlines already has equity stakes in air carriers in Malawi and Togo. Reports also indicate that it is standing by to take a good chunk of the shares of Nigeria Air, Nigeria’s new national carrier. Recall that Ethiopian Government had, in June this year, made public its plans to open some of its enterprises, including Ethiopian Airlines to foreign investments.
Meanwhile, Chief Executive Officer (CEO) of Ethiopian Airlines, Tewolde Gebremariam, has indicated that Guinea Airlines will soon start flights to neighbouring and regional countries while “Chad Airlines will start work on October 1 and Mozambique Airlines will start operations by the end of the year.” Also, Ethiopian Airlines has taken full management of the national airline of Equatorial Guinea.
There is no doubt that the various agreements that Ethiopian Airlines has signed with various African countries airlines is to position it as the truly African airline and position itself to be a leading airline in the Single African Air Transport Market. These agreements are tailored towards the African Union’s Single African Air Transport Market (SAATM) which was launched by African Union (AU) in January, this year.
Indeed, with the various agreements that it has signed with various national airlines in Africa and it is still searching for more agreements to sign, Ethiopian Airlines has become the biggest airline on the African continent, more so that it recently recorded airlift of 10 million passengers, considered as a feat even by western
standard.
The SAATM initiative, otherwise called Open Skies Africa , and the newly signed African Continental Free Trade, are powerful initiatives that will promote trade between African countries and will also ensure free movement of African people, goods, services, and capital across the
continent.
In addition, the single air transport market is expected to lead to reduction in prices of air flight tickets, spur more Africans to travel, resulting in more tourism revenues in African countries. There is no doubting the fact that those packaging Nigeria Air are aware of the stiff competition ahead of all airlines on the African continent when the Open Skies Africa comes into effect.
Consequently, Nigeria Air must be packaged to be able to withstand the competition ahead. The ownership of Nigeria Air must be wide with little shares of not more than 10 percent for the Federal Government and the rest of the shares spread over private entrepreneurs within and outside
Nigeria.
Whether Ethiopian Airlines should be allotted shares in Nigeria Air or not is a contentious issue because Ethiopian Airlines is a competitor. It is not right to allot shares of your company to your competitor in business except if the competitor is going to manage your company on your behalf. Even then, the competitor must always be closely watched so that he does not subjugate your company under his own. We must therefore be careful on the issue of Ethiopian Airlines that is interested in taking shares in Nigeria Air.
It is not as if there are no Nigerians who can manage the re-floated national airline, after all, there are some Nigerian managed private airlines that are doing well. The mismanagement of Nigeria Airways was because of its faulty ownership structure that enabled government officials to board its planes without paying and even to keep airplanes waiting on the tarmac for as long as two hours because a minister was on his way to the airport to board the plane.
Going forward, Nigeria Air must confront the competition ahead with good vision, determination to succeed in the market place and commitment to global best practices. I wish the board and management of Nigeria Air a resounding and successful debut.
