Nigeria’s proposed national carrier, Nigeria Air, received the Air Transport License (ATL), yesterday, scaling one of the mandatory regulatory requirements to commence operations. The license given, with the number: NCAA/ATR1/ATL214, runs for five (5) years, starting from 03 June 2022 to 02 June 2027.
An ATL certification is a document that states the type of operations a carrier can embark on within and outside Nigeria and also serves as a prerequisite to getting the Air Operator’s Certificate (AOC). Conversations around the delayed national air came into spotlight again when the Minister of Aviation, Hadi Sirika, in November 2021, revived the hope that it would launch on or before April 2022 after failing initially to commence operations in 2018. However, the commencement date has been shifted to July 2022.
Once upon a time, Nigerian aviation activity was never in the news without mentioning the defunct Nigeria Airways, which used to be the country’s national carrier and at some point, was the only airline in the country. However, the once bright Nigeria Airways abandoned the skies due to poor corporate governance and mismanagement, leading to a financial crisis, which made it cease operations in 2003.
Following an extended period without a functioning national carrier, it dawned on the government to encourage private sector participation. This led to the joint venture partnership between the Virgin Group and local investors in 2004, birthing Virgin Nigeria Airways, which replaced the former Nigeria Airways. Amidst changing names from Virgin Nigeria to Nigerian Eagle Airlines and, finally, to Air Nigeria, the partnership was unsuccessful due to persistent government interference, leading to a collapse in 2012.
In our view, having a national carrier to facilitate a faster flow of goods and services across the continent, especially in light of the commencement of the African Continental Free Trade Agreement (AfCFTA) is a positive step.
That said, the interim CEO of Nigeria Air, Capt. Dapo Olumide noted in an interview after receiving the license that the impact of Covid-19 was still taking a toll on the aviation sector as getting aircraft from the supplier’s destination still gets delayed. Also, the airline will start with domestic operations and begin to operate international flights after increasing the number of planes. Meanwhile, the government is still receiving bids from prospective investors, and this exercise is expected to close on 10 June 2022.
Without a doubt, the airline offers significant economic benefits if rightly managed. However, the timing of the project appears inopportune, as the current local airline operators are grappling with a high cost of aviation fuel among other operational challenges. The new Nigeria Air will also be caught in the middle of these operational challenges, if it starts operations at the said date (July 2022). This may likely elongate the payback period for prospective investors.
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