Introduction

As an emerging market, Nigeria is heavily involved in transatlantic trade in every economic sphere. The need to transfer goods and services from one country to another is a pivotal aspect of present-day trade, and air transportation is the most efficient way to do this. It is also a way to establish links with different economies.

In a bid to aid trade and boost economic development, airlines were established to transport people from one country to another. Due to the expense of owning and maintaining airlines, governments had to assist by establishing government-owned airlines, which are either fully owned and operated by the government or jointly owned by the government and private individuals. These airlines, bearing government insignia and flying under the flag of their originating country, are known as 'national carriers'.

National carriers

A national carrier is a country's national airline which is locally registered under a given statute and enjoys preferential rights or privileges accorded by the government for international operations. Various conventions highlight this. For example, Article 3(1) of the Tokyo Convention describes a country's flag on an airline as a "sign of the country's presence abroad", and Article 17 of the Convention on International Civil Aviation states that the airlines have the nationality of the state where they are registered. Therefore, when such an airline operates on a route between two countries, having been designated pursuant to a bilateral air transport agreement, any crime that is committed on board is prosecuted under the laws of the airline's state.

Owning a national carrier has various advantages for a country, which cannot be overlooked:

  • the government's involvement helps to mitigate the high capital cost that establishing and running an airline entails;
  • tourism is boosted, as the government can assist with offering tourism packages, granting discounts and providing foreign visitors access to well-known locations. All of this helps to boost the country's income through things such as job creation and hotel profits;
  • it can lead to an increase in patriotism for citizens and give the rest of the world a positive impression of the country;
  • it spurs sector development, because the country must train staff, build aircraft, conduct checks and undertake maintenance;
  • income is generated when nearby countries use the carrier; and
  • it is seen as a development tool – particularly for tourism development, which is a predominant economic activity in many developing countries.

Evidence has shown that many countries struggle to maintain the operation of their national carriers. However, national pride means that few countries are willing for the airlines to be completely privately owned. Many of the airlines that fall into private ownership either fail or are closed down or returned to state ownership.

Carrier history

The first airline linked to Nigeria was the West African Airways Corporation (WAAC), which was created in 1946. It was a jointly owned airline operated by the Nigerian, Ghanaian, Gambian and Sierra Leonean governments, although the headquarters was based in Nigeria. WAAC was dissolved in 1958 and rebranded as WAAC Nigeria, as the other countries pulled out to set up their own national carriers upon their independence. The WAAC brand was maintained due to the prestige it had garnered over the years. However, WAAC was eventually renamed Nigeria Airways Limited, which operated as the official national carrier of Nigeria until 2003, when the airline, due to mismanagement, owned only one aircraft and was in debt.

The airline was subsequently managed by a number of foreign organisations and was rebranded over the years as Virgin Nigeria, Nigerian Eagle Airlines and Air Nigeria, but they all pulled out for various reasons. It fluctuated between foreign, local and regional routes and finally ceased operation on September 12 2012.

Present-day considerations

President Mohammadu Buhari, who was elected on May 29 2015, expressed concern over Nigeria's lack of a national air carrier after receiving a briefing from Ministry of Aviation officials. According to Binta Bello, the ministry's permanent secretary, the establishment of a national carrier "is not only justified by economic considerations, but also strategic national interest, national pride and job creation potentials".

Despite being informed by the permanent secretary of the challenges domestic airlines face even after receiving an intervention fund of N 300 billion, the president ordered that expedited action be taken towards the re-establishment of a national carrier. According to the permanent secretary:

"the president is quite concerned about the lack of national carrier and he has directed the ministry to look into the possibility of establishing a national carrier as soon as possible. The president also expressed concern over the enormous debt profile of Nigeria's aviation sector, saying that his administration will act quickly to redress the situation."

The president inaugurated a 12-member ministerial committee to look into the establishment of a national carrier. According to the permanent secretary, the committee – chaired by Mohammed Abdulsalam, former managing director of Discovery Airlines – is responsible for:

  • reviewing previous consultants' submissions and recommendations on a national carrier;
  • reviewing the report on the failure of the defunct Nigeria Airways and other failed private airlines;
  • inviting submissions from the Assets Management Corporation of Nigeria on the debt profile of Nigeria's domestic airlines; and
  • consulting widely with stakeholders on the establishment of a national carrier and the development of a robust model that meets the aspirations of Nigerians.

Comment

As writer Olumide Ohunayo argued, if having a national carrier "is felt to be a must, then the cost, risk and lessons from other airlines should be seriously considered".(1)

For further information please contact Olufunto Omotoso at George Etomi & Partners by telephone (+234 1 462 1660) or email (funto@geplaw.com). The George Etomi & Partners website can be accessed at www.geplaw.com.

Endnotes

(1) Ohunayo, O (2010), "National Carrier Debate - Here We Go Again".

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