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Ethiopian Airlines’ selection by the FG as its national carrier has received mixed reviews

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Industry players have responded differently to the allegation that the federal government is in talks with Ethiopian Airlines, the continent’s most profitable airline, as their choice of main investor and technical partner for the prospective national carrier, Nigeria Air.

In Addis Abeba last week, a team from the Ministry of Aviation discussed Ethiopian Airlines’ selection as the national carrier’s primary investor and the fact that it was the only airline to submit a bid in response to the Ministry’s call for bidders.

THISDAY has learned that the Ministry of Aviation has begun negotiations with Ethiopian Airlines after waiting for a while and seeing no other bidders express interest.

From the Ethiopian side, it was discovered that Mesfin Tasew, CEO of Ethiopian Airlines, revealed that Ethiopian took part in a bid filed by the Nigerian government, which invited airlines interested in working with the government to develop a new national carrier.

The Ministry of Aviation selected Ethiopian as a preferred strategic partner after considering the proposal. Tasew informed the Addis Ababa-based local media that “they have written a letter to us telling us of their decision.”

Additionally, THISDAY verified that on Monday, September 12, 2022, a delegation from the Nigerian government, led by the Minister of Aviation, Mr. HadiSirika, traveled to Addis Abeba and met with the Ethiopian Airlines Group executive management team.

Although the minister who recently promised to engage the media on the matter noted that an agreement had not yet been signed between the Ministry of Aviation and Ethiopian Airlines for the start of the partnership, negotiations have been ongoing for the creation of the national carrier.

Nigerian officials claim that the private sector will be the driving force behind the proposed national airline, Nigeria Air. While Ethiopian would hold 49% of the airline and Nigerian investors would own 46% of it, the Nigerian government would keep 5% of the company.

The Nigerian government expects the private sector to contribute $250 million.

Tasew was cited as saying, “We plan to have some share and cooperate with them to develop a viable national airline.”

The largest aviation company in Africa, Ethiopian Airlines, is expanding by 20–25% annually. One of the most lucrative airlines in the world is this one.

The national flag carrier generated a net profit of $937 million for the fiscal year 2021–2022. The airline’s $5 billion in revenue is a staggering 79% increase over the prior year.

Last April, the airline celebrated its 76th birthday.

However, a number of responses have followed the partnership’s announcement. Although the idea was praised by many industry participants, some said Nigeria should have collaborated with a carrier outside of Africa.

The detractors discussed Nigerian patriotism and how Ethiopian Airlines might not offer Nigeria Air the assistance it would require.

Others argued that a better cooperation arrangement could have been made that would have benefited Nigeria more than handing Ethiopia a 49 percent stake.

Senator Sirika, the minister of aviation, is scheduled to speak about the agreement and confirm whether the government has opted to continue working with Ethiopian Airlines.

Isaac Balami, the chief executive officer of 7Star Global Hangar Limited, reportedly emphasized the significance of the national carrier in response to the potential partnership.

According to reports, Balami said that in order for aviation in Nigeria to grow and develop, the country needed a national carrier that would aid in the training of pilots, engineers, marshallers, and other technical professionals, just like it did when Nigeria Airways Limited was in operation (NAL).

“Having a national carrier is crucial, there is no question about that. It doesn’t matter if the variables or the architecture are parts that relate to a flag carrier.

Today, British Airways serves as both a national and a flag carrier. The ownership is primarily private.

Although American Airlines, Delta, and United Airlines are all privately owned in the United States, the problem is that over time, the government has put institutions in place to ensure these airlines compete and survive.

He emphasized that having a national carrier goes beyond just operating an aircraft; it also requires facilities for aircraft maintenance and training.

He also emphasized that the national carrier was another way to encourage private sector involvement in aviation.

A hybrid model of private and public participation, which he described as the best chance for the development of the aviation industry, is what Balami said was necessary to enable the sector to survive and support other players in the industry.

He added that it was not enough to have advanced courses and simulators in aviation colleges in Zaria.

However, industry expert, Marketing and PR Strategist, Sindy Forster, noted that the national carrier would be unable to try to take full use of BASA (Bilateral Air Service Agreement) for two years in the absence of a change in Nigerian Civil Aviation Authority (NCAA) guidelines.

“We already have flag carriers that require assistance from BASA; what assistance have they received? What BASA support will already-existing airlines still get? There are several things that must be added before SAATM (Single Air Transport Market) may be completely utilized by an airline alone.

What constitutes “competition” when they favor one privately owned international airline over the privately owned domestic airlines? Having three additional planes when we could lose more from unsupported airlines and this will not result in competitive fares is unfair competition and a market distortion.

“Wet leasing does not create jobs for Nigerians, and there is a chance that the Nigerian MRO won’t ever be used.

As with every other JV they have established, Ethiopian will probably want to use their MRO.

Their engineers are employed, etc. Will they create their own ground handling businesses or use the current ones? she wondered.

She added that the “national carrier” has so far been entirely run by government employees and contractors who are paid to carry out orders.

“Why will the government concentrate on fostering an atmosphere that is favorable to one airline rather than all others? How will current airlines be supported? On what basis will they contend for BASA routes?.

Why offer financial aid to a private airline that you only own 5% of? In order for there to be a level playing field, they should purchase 5% of everything, she continued.

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