Nigeria’s Minister of Aviation and Aerospace Development, Festus Keyamo SAN, has expressed concerns over aspects of the deal signed between his predecessor, Hadi Sirika, on behalf of the Federal Government and Ethiopian Air over Nigeria’s proposed national carrier.
Nigerians watched helplessly as Sirika, the immediate past Aviation Minister at the last minute of the former President Muhammadu Buhari’s unpopular administration tried to allegedly swindle the Nigerian aviation sector with the hoax of a deal that would have meant the end of domestic airlines. It is still worrisome to industry sector players who had taken him to court at the time how Sirika has not been invited by the President Bola Tinubu’s administration to explain to Nigerians what he was thinking when he pulled that stunt on the nation.
NewsBits also recalls that after the Hadi Sirika show of shame, the House of Representatives Committee on Aviation had at the time called for the suspension of the establishment of Nigeria Air. It also called for prosecuting those involved in the unveiling of the national carrier by the previous administration, describing the exercise as a fraud.
But speaking after this week’s Federal Executive Council, Keyamo said that contained in the terms of agreement between Nigerian government and Ethiopian Airlines, the core investor in Nigeria Air, was that the national carrier would be given a five-year tax waiver, a move he said would have destroyed domestic airlines industry.
He stated that critical details of the agreement with Ethiopian Airlines required re-evaluation, citing concerns about staffing arrangements and the potential for creating a monopoly at the expense of other local airlines. The minister said that his responsibility as a minister was to address stakeholders’ concerns and underscore the need to ensure a fair evaluation of the situation. Keyamo said he has submitted his report to President Bola Tinubu, who will determine the next course of action regarding the national carrier.
Nigeria Air was founded in 2018 with ownership stakes divided among Ethiopian Airlines (49%), Nigeria Sovereign Investment Authority (NSIA) (46%), and the Federal Government (5%). Besides the issue of tax waivers, the minister also pointed out a proposal in the agreement allowing Ethiopian Airlines to appoint personnel at all levels within Nigeria, could lead to a scenario where ET controls top management positions in a Nigerian -owned carrier .
“Now, we have looked at all the issues and the report has been presented to the President. But let me just give one or two snippets because of Nigerians who are quick to judge.
“In the agreement, you are giving tax waivers to Ethiopian Airline coming into Nigeria. They asked for tax waivers for five years and you granted them, to come and compete with your local airlines who are paying those heavy taxes. You want to create a monopoly? That’s why when they tell you that we want to crash price, it’s a lie. It’s robbing Peter to pay Paul. “Because they have removed all taxes from you and you’ve granted them tax waivers, initially they will crash prices, but once you’ve driven every other person out of the market, you’ll now have a monopoly, then you can now hike it 500 per cent, nobody dares to challenge you.
“The only thing that brings down prices in the commercial world is fair competition. In the agreement, they also made a proposal that they will appoint everybody; top management, everybody Ethiopian, in Nigeria, and we agreed. “When I’m ready to talk, I will talk, but I cannot pre-empt Mr President because we have raised all the concerns before him,” he said.
During a recent tour of the airports in Lagos, Keyamo announced that the Nigeria Air project which is currently in a legal tussle with the Airline Operators of Nigeria (AON) and Sirika was suspended pending a thorough review of the terms and conditions of the deal. He also announced the suspension of the concession of Abuja and Kano international terminals, saying he would have to go through the project to ensure that the interests of Nigerians are protected.
Last year, the AON dragged Sirika to court asking the court to stop the national carrier deal and withdraw the Air Transport License already issued to Nigeria Air by the Nigerian Civil Aviation Authority. The AON also claimed that the firm, which served as transaction adviser for the transaction was incorporated in March last year and alleged that the company was linked to the aviation minister. The local airlines further alleged that the ATL issued to Nigeria Air did not pass through the normal security clearance. According to them, the federal government’s partnership with Ethiopian Airlines on the project would send domestic airlines out of business by opening up the domestic air travel market to Ethiopian Airlines.