In its manner of establishment, government protection and 15 years tax waiver at the expense of existing airlines, the federal government through the Ministry of Aviation planned to kill Nigerian airlines with the establishment of Nigeria Air, Airline Operators of Nigeria (AON) has alleged.
The association said that it was the realisation of this fact that prompted the airlines to go to court to stop the planned national carrier and urged the federal government to follow laid down process and also extend the privileges given to Nigeria Air to other domestic airlines.
This was contained in the suit filed by AON at the Federal High Court in Lagos against Nigeria Air Limited, Ethiopian Airlines (second defendant), Senator Hadi Sirika (Minister of Aviation and the Attorney General of the Federation.
The court document obtained by THISDAY with suit number FHC/L/CS/2159/2022 indicated that AON (the Plaintiffs) sought orders against the defendants, which include an order directing the immediate, fresh and transparent bidding processes (es) involving the Plaintiffs being the indigenous Airline Operators in Nigeria rightly entitled to participate in the process; an order directing the immediate revocation and cancellation of the Air Transport License (ATL) issued by the Nigerian Civil Aviation Authority (NCAA) to the first defendant (Nigeria Air) and an order of N2 billion as damages for the injury suffered by the Plaintiffs and still suffering because of the “wrongful exclusion of the Plaintiffs, wrongful action; unlawful bidding and selection processes and their wrongful projection of the Plaintiffs as not having properly, rightly, and timely bid the Nigeria Air project.”
AON alleged that the Minister of Aviation did not follow due process in the Private, Public Partnership (PPP) arrangement in Nigeria, but circumvented the process through abridgment that was signed by the President of Nigeria and insisted that the President does not have the powers to sign such arrangement without recourse to the National Assembly.
So the Nigerian airlines also sought the order of a declaration “that the action, conduct and or decisions in the sale of the shares and operations of the 1st defendant (Nigeria Air) is in violation of the Companies and Allied Matters Act (CAMA) 2020, SEC Nigeria Consolidated Rules and Regulations (NIPC) Act, International Civil Aviation Organisation (ICAO) Convention, Civil Aviation Act, Public Procurement Act, Concession Regulatory Commission (Est.) Act, 2005, Federal Competition and Consumer Protection Act, Procurement Processes for Public Partnership in the Federal Government under the National Policy on Public Private Partnership (N4P) and Nigeria Civil Aviation Regulation, 2015 and other regulatory statutes on aviation, companies and investment laws in Nigeria.”
In its counter-affidavit the 2nd defendant (Ethiopian Airlines) said as far as it was aware, the sale of Nigeria Air’s shares was absolute and therefore was not under Public/Private Partnership as alleged.
“The Federal Government of Nigeria agreed to sell 95 per cent of its shares in the 1st Defendant (Nigeria Air), retain 5 per cent, invite 46 per cent of Nigerian investors, and 49 per cent to an international airline. By the arrangement, the majority stake of 51 per cent in the 1st defendant is retained by Nigerians so that effective control of the airline shall remain with Nigerians.”
Ethiopian Airlines also in its defense admitted asking the Federal Government of Nigeria for 15 years tax moratorium, among other incentives, for it to partner with the national carrier, arguing that its request was a normal practice in international investment negotiations, insisting that it had not violated any known law in the country or elsewhere.
Key AON stakeholder told THISDAY that procurement process for PPP has three stages, but in the process of establishing Nigeria Air, the Minister of Aviation allegedly sidestepped the three-stage process.
“The shareholding structure was not transparent. Ethiopian Airlines coming in as consortium with Skyway Aviation Handling Company Plc (SAHCO) and MRS Oil Nigeria Plc should have 49 per cent. It couldn’t have bided as consortium and also bid as a single company. So all we have argued is to look at the process. If it is PPP government wants it should follow due process and not to give Ethiopian Airlines concession to kill off other Nigerian airlines,” the source said.
The Minister of Aviation, senator Sirika has described Nigeria Air as private sector driven national carrier under Public/Private Partnership arrangement.
THISDAY
