Senior member of Airline Operators of Nigeria (AON) and the President/CEO Top Brass Aviation Limited, Captain Roland Iyayi recently granted interview to Arise TV, where he gave details on why Nigeria Air may not emerge as national carrier. Chinedu Eze brings the excerpts:
We are talking about Nigeria Air, just less than 72 hours to the end of President Muhammadu Buhari’s government, the outgoing Minister of Aviation, Hadi Sirika unveiled Nigeria Air at the Nnamdi Azikiwe airport. Many have described this as a last-minute push by the Minister to fulfil his promise to deliver the national carrier to Nigeria despite court orders to halt the operation. Does this landing of aircraft in Abuja signal the birthing of a national carrier in Nigeria?
I doubt very much if flying an aircraft into an airport and having water salute to show people that there is an aircraft that has just been painted in the colours of Nigeria Air would amount to birthing an airline. The truth of the matter is, I think what the outgoing Minister had done is nothing short of taking Nigerians for a big ride. And I think it is a monumental fraud to sort of conniving with Ethiopian Airlines, having an aircraft that was on commercial flight for Ethiopian Airlines on the 21st of May, which is about a week ago, flying into Tel Aviv on an ET 405 flight, to fly into Abuja, only for static display will mean to birth an airline. That particular aircraft flew out of Abuja yesterday (Saturday, May 27, 2023), an as I speak, it is back in Ethiopia. And I can tell you that presently, the decals (sticker) of Nigeria Air stuck on it, is being removed and it is being quickly rebranded Ethiopian Airlines to be put back in service. So, essentially, all that we did two days ago was basically a charade by the outgoing minister of aviation, possibly to sort of block out, maybe, considering the fact that in the last sic to seven years, we have had about N85.42 billion in terms of budgetary allocations to Nigeria Air, which is supposedly a private enterprise. So, we have a lot of issues here that are not explained, and I think this desperate move by the outgoing Minister is just one in the line of several things he had done to undermine the entire Nigerian populace.
I touched on the court order, the Airline Operators of Nigeria which you belong to sued the Minster and Ethiopian Airlines; in that order of a Federal High Court against both parties not to proceed until the determination of the substantive suit. Now is that court order been vacated, do you thin Ethiopian is aware of this court order and still went ahead to participate in this?
Again, as a matter of fact, there are three orders of court which the Minister and Ethiopian Airlines are familiar with. They know of them, they have been served, the attorneys representing the AON have written to them and copied them, also had the Nigerian Civil Aviation Authority (NCAA) in copy and all the relevant agencies to be aware of these orders of court. Indeed, what was done two days ago is a flagrant abuse of the Nigerian judicial system. And I think the full weight of the law should be brought to bear on the honourable Minister and Ethiopian Airlines as matter of fact, because I do not see them as having been good corporate citizens. I cannot even imagine a Nigerian entity operating out of Ethiopia, having been held by a court order not to continue with the process, go ahead and do what was done two days ago in Ethiopia, it will never happen. So, for them to have come to Nigeria to do this, shows the absolute contempt they have for the Nigerian people. I don’t think to a large extent they will make good partners. I believe what is being done, again, is total undermining of our judicial system, our processes and the country and the people, which indeed the honourable minster must be held accountable for. It is untold that you cannot do this and walk away free.
You have been a Managing Director in the Nigerian Airspace Management Agency (NAMA) and you have worked in the aviation industry for quite a while now, when you have an aircraft of that nature coming in, what is the process of bringing it into Nigeria? Because some people online have been asking, how did he manage to bring in an aircraft that does not belong into Nigeria and claimed that it is part of Nigeria Air, which he is trying to float which, according to a court of law, is not even allowed to fly? How do we explain it?
Well, essentially, if you have a foreign aircraft wanting to fly into Nigeria, the process is for you to file what is called a clearance with the authorities in Nigeria indicating when you are coming, the type of aircraft you are coming with, the crew operating and to indicate the intent. Invariably, what we have today is that the honourable Minister of Aviation obviously in making sure that this particular flight comes in, would have told the authorities to go ahead and issue the clearance in any case for the flight to come in. The flight came in as a technical flight, it did not come in as a commercial flight, so you can consider that to be a visiting aircraft. So, for a visiting aircraft, within 48 hours of filing a clearance to fly into your airspace, a clearance is usually issued by the NCAA and the Nigerian Airspace Management Agency. So indeed, I will not see a situation where Ethiopian Airlines ordinarily would want to fly an aircraft into Nigeria and would be denied the clearance to come in. They took advantage of that loophole and that is exactly what they are exploiting.
So in doing that, you then begin to wonder what kind if relationship is there between the Minister of Aviation and Ethiopian Airlines that makes it possible for them to have a relationship that does not represent Nigeria in anyway shape or form. And is not fair to Nigeria based on some of the things you have alluded to; that if it was Ethiopian government, they will never allow this kind of thing to happen. What kind of relationship do they have, is there something in the underbelly of it that might be criminal or corrupt?
I wouldn’t know exactly the kind of relationship because I am not privy to the meetings they had. But what I can say clearly is this: Ethiopian Airlines a couple of years ago approached Air Peace, to have Air Peace partner with it. Air Peace thought the arrangement was an above-board arrangement and followed through with it to a point where negotiations were being had, only for Ethiopian to tell Air Peace that there was no point for Air Peace to aspire to grow its airline. They are willing to provide Air Peace, as a matter of fact, pay Air Peace rent of $32 million per annum for Air Peace to sit back and allow them run the show. And what Air Peace had asked them essentially was where does that leave other airlines in the country? Where does that leave my country and where does that leave my staff? And these are questions they were not able to provide answers to. In any case what we see going on now with the honourable Minister of Aviation and Ethiopian would amount to something similar because if you take cognizance of the structure of how this thin came to be, it is almost certain that there is no transparency. Everybody that was said to be part of this process have denied being part of it. So, you ask the question, who are those supposedly the private enterprise, owners of Nigeria Air? Nobody has come forward to say we are the owners.
The Minister had alluded earlier that there was 46 per cent of shares that belong to some Nigerian entities, including the Nigerian Sovereign Wealth. They have debunked it, they said they don’t have anything to do with Nigerian Air. And the Minister later said it was a mistake. He also sad that the Nigerian government owned 5 per cent. Who really owns the remainder of the 46 per cent as the Minister said 49 per cent belong to Ethiopian Airlines. Do you really know who own the 46 per cent?
I can say this, given the papers we have filed in court, essentially what we have gone to court to say is that the entire process, the bidding, the selection and whatever it is we have today was not transparent. Again, we went to say that most of the things that have been alluded, we actually have proof to indicate that these are things that run counter to the provisions of the ICRC law for the country. And we have asked the court to simply interpret our position and see if indeed we are correct. If we are correct, it means the entire process is wrong. Now, the Minister approached the public and said that 5 per cent of this entity will be held by the Nigerian Sovereign Wealth Fund. They came out within minutes and said they are not part of it. Then again, the Minister said 46 per cent will be held by Nigerian institutional investors. So far we have MRS, SAHCO and the supposed Nigerian institutional investors. Meanwhile, SAHCO is a company under the group Sifax. Sifax actually put in bid for the concession of Murtala Muhammed Airport in Lagos and they never wanted to be part of Nigeria Air. But for whatever reason, it was put as a member of that institutional investor team and they know very little about it. And that is the much we have found out so far. So, invariably, we are asking the question if Sifax is not part of this 46%, we have not heard from MRS. Who exactly is holding those shares? And if they are being held, is it by proxy and for who? So these are questions we have raised in the document we presented to the court for interpretation. And when we see what was filed by the Ministry, their defense, indeed what they said is that this process, is a PPP process. But the Ethiopian Airlines’ defense said no, that they know nothing about a PPP and the 49 per cent they have acquired in this project is absolute.
So, our question is, if 49 per cent is absolute, how much is 49 per cent worth? And then the 46 per cent, is it allocated or paid for by way of subscription and by who? All of these are questions we have asked and they have never been answered by the Minister, not by the Ministry and not by Ethiopian Airlines. All Ethiopian Airlines has said is that this is business, they have put in a bid, they have won, and it is clear and the 46 per cent is absolute. Then we now take cognizant of the fact that between 2016 and 2022, the federal government has budgeted N85.42billion as appropriation for Nigeria Air. Where has that money gone to? Now if that money represents 5 per cent, how much has Ethiopian Airlines paid for the 49 per cent it is holding, how much have they put in the coffers of the federal government? How much do we have in the Central Bank today? Now, Qatar Airways took out 49 per cent of Rwand Air and they paid $1.3 billion. Rwanda does not have the market size Nigeria has. Rwanda does not have the bilateral agreement and multilateral agreement Nigeria has. So, who does the valuation? How do you value our 49 per cent? So, these are questions that have not been answered. And we are asking if indeed this whole process is transparent and it is meant to be for the benefit of the Nigerian people, why the so much desperation particularly in the last two weeks by the honourable minister?
Why do you not allow the incoming government to address as best as can be done for the benefit of the Nigeria people? So, we see a lot of issues here that need to be addressed by the incoming government and we are worried because we think very clearly that this is a process being put in place by the honourable Minister to sort of arm-stwist the incoming government to a point where it is almost impossible for them not to default. Because when we saw the agreement that was put together by the Ministry, for this particular transaction, it was drafted by the Ministry and presented to Ethiopia. The Ministry gave Ethiopia undue competitive advantage. Ethiopia had said they would engage in on predatory pricing in upward of between 12 to 24 months to be able to penetrate the market. All of that put together we read to mean that Ethiopian is coming to destroy the domestic market, not to the benefit of the consumers. Because at the time the competition is no longer there, consumer prices will go up because it will become an issue of demand and supply. So, we have seen all of these through in all the paperwork we put before the court. And that is why we said to the minister, if indeed you mean well, this will not be the path you will charting at this time. It is too late in the day, you had eight years, you have done very little, in the last two weeks you are trying to make everything happen, it will not work. I set up an airline, it took me 18 months to be issued an Air Operators Certificate (AOC), so how do you intend to be able to acquire that in two weeks. So, these are questions that ordinarily any sensible thinking person in the industry will say this is an impossibility. What you saw two days ago was a mere charade and I clearly believe it is monumental fraud. We are going to pursue the matter in court to ensure that the contempt action of the honourable Minister is brought to justice.
You call it a complete charade, there are reports that, that airplane was a rented airplane from Ethiopia and it is registered to Ethiopian Airlines and that the plane has actually gone back to Ethiopia, I would like to address that. And there have also been reports credited to promoters of Nigeria Air that AON members are only scared of competition, how true is this?
First of all, like I said earlier, this aircraft flew in on the 21st of May, I have it on record that the same aircraft operated a commercial flight on behalf of Ethiopian Airlines to Tel Aviv, the flight number was ET 405, that can be checked. Now, between 21st and 27th of May, the aircraft was taken out of service, rebranded and flown into Abuja and that was essentially what you saw two days ago. So, we do not believe that all of that is totally unfounded. Talking about renting the aircraft, I would not know if there was any money paid for the rental. But because the honourable Minister and Ethiopian Airlines are in cohort, I would expect that whatever they have come together to agree, maybe was what was made manifest on Friday. When you talk about competition, the industry thrives on competition but what we do not want is destructive competition. Because when you bring in a carrier that will engage in predatory pricing, then, of course, such a doing is to destroy the competition in the market. We are not afraid of competition as AON. In the last six months, three new airlines have come into the market. You had Valuejet, Rano Air and now Binani Airlines. We are not even afraid to have more because the more, the merrier. Nigeria is wide and it is a vast country that needs access to market. And the only thing that can be done is to have more players in the market that can actually focus on the different sectors to ensure that market access is guaranteed. Because if you look at it, the aviation sector should be looked at as a social service, that is essentially making sure that you can have market access. If we do have good market access, you are talking about FDIs coming into the country, you are talking about development, tourism, all sorts of things can be tied to the growth of aviation. And we want to make sure that what we have achieved so far is not destroyed simply because a couple of individuals think it is their birthright. They just come in there and decimate the market for their own benefit, that is what we are fighting against; not competition. Competition is welcome and it is good.
