BY CHRIS ALIGBE
From Independence in 1960 to date, Nigeria has made ten attempts to float and run a virile national airline but virtually all failed. The most successful of them was the erstwhile national carrier, Nigeria Airways that survived from 1971 to 2003, though the airline had existed as West African Airways Corporation for close to twelve years before it was renamed Nigeria Airways.
These attempts include: “Nigeria Airways” 1971 – 2003, Capt Joji’s “Air Nigeria” 1992/1993, IFC “New Co” 1999/2001, Kema Chikwe’s “Air Nigeria” 2001/2002, Kema Chikwe’s “Nigerian Global” 2002/2003, Yuguda’s “Nigerian Eagle” 2003/2004, Obasanjo/Branson’s “Virgin Nigeria” 2005/2009, UBA’s “Air Nigeria” 2009/2010, Jimoh Ibrahim’s “Nigerian Eagle” 2011/2012 and Odua’s “Nigeria One” 2012/2013.

Over the years, the desire for a world-class National Carrier has become endemic. Today, the clamour persists and reverberates with intensity any time a new Minister is appointed. While the clamour is understandably unabating, the need for a highly effective functional national airline cannot be overstated.

Unfortunately, many a stakeholder in the aviation industry, as well as Ministers do not have a clear record of our many failed attempts, let alone why the attempts failed and what should be avoided in planning new floatation. Many do not know that, of the ten attempts, only four – Nigeria Airways, Virgin Nigeria, Nigerian Eagle and Air Nigeria were physically in existence at one time or the other. The remaining six remained, as it were, at the realm of ideas but suffered one form of affliction or the other. For instance, Joji’s “Air Nigeria”, in spite of visible strides towards its emergence, suffered a violent political abortion; the IFC “New Co” was a victim of political intrigues and deliberate abortion. Kema’s “Air Nigeria” was a victim of the usual Nigerian political hobby-horse, ending in legislative abortion, while her contraption, called “Nigerian Global” was shot down at the Federal Executive Council as an illegitimate conception.

Yuguda’s “Nigerian Eagle” was carefully and predeterminedly killed by a Presidential fiat; while Odua’s “Nigeria One” suffered gestational impediment, foetal suffocation, atrophy and death.

In all ten, there are common indices revealable in their demise, most prominent of which are; ulterior and non-altruistic motives, lack of transparency, lack of understanding of the dynamics of airline floatation, deceptive road- map and insincerity as well as refusal or failure to use the right professionals and adhere to professional advice. There are also issues of greed and desire for personal gains as may be found in some, but not in all the attempts.

Since again we have a new President who having openly expressed displeasure over the demise of the erstwhile national carrier, Nigeria Airways and has directed the Ministry of Aviation to work on a new National Carrier, the issue of a new National Carrier is again resurging. It has now become necessary to contribute to the impending discourse by x-raying all our failed attempts, how and why.

Nigeria Airways: (1960) – Our Failed Attempts:
Nigeria Airways came into existence as a symbol of a new nation in 1971, a decade after the accession to sovereignty in 1960 following our buy-out of the equities of Elder-Dempster and British Overseas Airways Corporation (BOAC) in the then West African Airways Corporation (WAAC). The Nigerian newly acquired airline, though continued operations without break, was under the same name of West African Airways Corporation. On January 22nd, 1971, it was renamed Nigeria Airways.
For over 40 years, the airline served to link various destinations within Nigeria, West and Central Africa. It also operated intercontinental flights to Europe, USA, Middle East and Asia, hoisting the flag of a new sovereign nation as well as fulfilling the social responsibility objective of its acquisition. Its outstanding performance reached the crescendo during the years of struggle to liberate Southern African States of Zimbabwe, Mozambique, Angola, Namibia then still under colonial rule and apartheid South Africa. The period of the Murtala/Obasanjo military administration was so impactful in the Southern Africa struggle and Nigeria Airways was one of the instruments used as it flew sorties delivering men and materials to aid the struggle. So much was the impact that Nigeria was referred to by OAU as a ‘Frontline State’ and occupied the Assistant Executive Secretary position in the OAU Liberation Committee that spearheaded the planning for the liberation struggle. Fully owned by the government, the airline ran as a first-class parastatal under the control of relevant Ministries. The government hired and fired top Management and Board, paid the airline’s major debts, subvented it and determined some of its routes, viable or not. Civil Servants and the Military used its services at will and engaged the airline in rescue operations, pilgrimages and missions without payment.

There are records of the airline’s “call sign” being given to private airlines as favours by government officials on directives, usually unwritten, for Hajj Operations and the huge over-flight, landing and parking charges were left for Nigeria Airways to settle. For despicable motives, ministers acted on the airline to its detriment. In 1991, a supervising minister fired the entire Board and Management for increasing fares without his permission. In the same year, same minister unilaterally cancelled a Commercial Agency contract that caused the airline severe financial injury amounting to millions of pounds sterling in restitution. In 2002, another Supervising Minister scuttled Nigeria Airways contract for Hajj Operations resulting in a revenue loss of over four million dollars, all in the bid to cripple it as part of the alibi for its liquidation.

Once, a matriarch of the Presidential family admonished and stopped a CEO of the airline from recalling a level 10 officer from a foreign station. Virtually, all the F27 and F28 work horses of the airline were either sold or given away to some African States by the Federal Government in a show of big brotherhood. These were part of the singsong of Obasanjo about the 32 aircraft he left as Military Head of State.

All these were not helped by the internal factors of very low managerial competence, receding knowledge of staff, retrogressive and injurious union activism, fraudulent activities and staff resistance to change exemplified in 1991. In 1991, the Presidential Task Force which managed the airline had introduced computerized check-in system for two prime international routes; London and New York. This system not only improved passenger handling, it also exterminated “boarding pass” malpractices. This incensed those staff that engaged in selling boarding passes. The system was used on Friday night, usually the busiest. By Sunday morning, this group of boarding pass profiteers lit the computer wires with fire which eventually blew up the entire system. Thus, ended the highly forward-looking development and the airline returned to its old ways of manual check-in of passengers and with it came the return of boarding pass malpractices till its demise in 2003.

But the most devastating impact was the IBB SAP policy of the 80’s. The Structural Adjustment Programme came with huge devaluation of the Naira and the stoppage of annual subvention to Nigeria Airways. This twin policy action quadrupled Nigeria Airways problems as it multiplied the airline’s debt in terms of the quantum of naira it now required to meet its foreign debts obligations which at the IATA Clearing House stood at US$42m, besides others. This led to the expulsion of the airline from the IATA Clearing House in 1987 which made it impossible for the airline to fly passengers beyond one point as it could no longer interline with other airlines. This factor immediately shrank the market share of the airline as it became a point-to-point operator. The consequent huge loss of revenue sent it into a vicious cycle of ever dwindling revenue.

By 1988, IBB slated the airline for commercialization and privatization under the then precursor of the BPE, the Technical Committee on Privatization and Commercialization – TCPC. To drive this, IBB appointed a Presidential Task Force – PTF, led by AVM Abdullahi Dominic Bello. The Committee which included Pascal Dozie, Otumba Adesoye, Ishiaku Umar, Captain Mohammed Joji, Stella Ugboma and late Bassey Itam will remain, probably, the soundest team ever put together to manage the airline.

The PTF painstakingly injected life into the airline but the management style was based on close supervision and enforcement which left nothing but compliance for the staff to imbibe. And so when the PTF left in 1990, after its two-year tenure, the airline returned to its old ways: poor management culture, manual passenger handling and decadent work culture. In spite of Capt Joji’s novel privatization strategy adjudged to be most innovative by AFRAA, put in the works to revamp the airline in 1992/3 and the Jani Ibrahim’s turnaround magic of 1997/1999 which saw the airline resurging fast to financial health, a concatenation of new ignoble circumstances unfortunately brought the chequered history of Nigeria Airways to an end.

Some of these untoward circumstances include: the shocking cancellation of the Nigeria Airways/British Airways JV that was a cash-cow, yielding Nigeria Airways N100million net monthly and the shutting of all other revenue sources of the airline by the then Minister whose objective was to collapse the airline so as to create a new national carrier of her purpose. This was in 2003 when at the valedictory Executive Council meeting of OBJ’s first tenure in May, the then Minister of Aviation, Kema Chikwe, in a shockingly mute Executive meeting, secured the Council’s approval of her Memo, by 100 percent unfortunate consensus silence, to liquidate the airline.

Joji’s Air Nigeria/Nigeria Airways: (1992) – Our Failed Attempts:
The next attempt was Capt Mohammed Joji’s “Air Nigeria/Nigeria Airways”. Joji was appointed Managing Director/CEO of Nigeria Airways in January 1992, a year after the exit of the AVM A. D. Bello-led Presidential Task Force on Nigeria Airways in which he served between 1989 and 1990. With a clear understanding of the challenges of the airline and a conviction that only privatization would redeem the beleaguered national carrier, Joji cooperated extensively with the Hamza Zayyad-led Technical Committee on Privatization and Commercialization – TCPC, the precursor of BPE, which was then working on the privatization of Nigeria Airways. Joji created an ingenious concept of “Nigeria Airways/Air Nigeria” as the model for the twin objective of: resuscitating the ailing Nigeria Airways and creating out of it a brand new privatized airline – “Air Nigeria.” Nigeria Airways was to remain fully-owned by government and operating domestic and regional routes, while “Air Nigeria” would be a privatized airline, operating Nigeria’s international routes with the government holding 40% equity, technical partners – Swiss Air and Sabena 40% and remaining 20% would be sold to the public and staff. Air Nigeria was to use Nigeria Airways DC10s and A310s on lease and pay Nigeria Airways US$1million monthly. It would absorb relevant technical and professional staff of Nigeria Airways needed for its operation as well as engage close to 300 new staff required for the start-up.
Pension and Gratuity liabilities worth, as at 1993, N489,526,000 would be paid off. Envisaged in the concept was also the privatization of Nigeria Airways Skypower Catering Services and the Skypower Ground Handling Company. It also incorporated the establishment of a Property Company to manage vast landed assets of the airline scattered over Nigeria, Africa and Europe. The process of realizing this concept had advanced to almost the last but one stage before the throttle lost power and the train came to a painful final stop.

As at that time, only British Airways had successfully privatized under the resolute political will and financial commitment of the then British Prime Minister, Margaret Thatcher, which Lord King and Collin Marshal made no mistakes with. The novel “Nigeria Airways/Air Nigeria” was to be the second lesson in global studies of privatization models in the airline sector. This however, unfortunately, was not to be. The Project faced intense stakeholder-antagonism and rejection. From the Aviation Minister, late Chief Wole Adeosun to the airline’s in-house Unions – NAAPE, ATSSAN, NUATE and Pensioners, for various reasons, mostly personal and group interest, ego and ignorance, rejected privatization. Even the efforts of the Dubem Onyia’s – led House Committee on Aviation to save the project failed as it came too late. The killer-nail was however hammered by the then Military Head of State, when, in his bid to remain in power, he traded Nigeria Airways CEO position for political favour to the then Senate President , whose role was critical to his bid. Thus, the replacement of Joji with Engineer Agom, the Senate President’s childhood friend, and a sworn opponent of Joji, led to the abortion of Joji’s “Air Nigeria”.

Apart from the above political factor, there are other lessons from the failure of Joji’s novel project. Joji and TCPC completely forgot that, as Professor Ragner Nurkse stated in his classic Treatise on – “The Idea of Change as an Obstacle to Change”, man naturally resists change. As at the time when the entire aviation world, with the exception of the US and then UK which had just privatized its national carrier, was still buried in the prevailing regime of State-owned national airlines, both Joji and TCPC were perceived to be foisting new fangled concept of privatization on the country. The entire staff and other stakeholders rose up stoutly against what they considered “insanity” of a sort. Sadly, neither TCPC nor Joji saw the need to invest enough time and funds for staff education, enlightenment and re-orientation. Only feeble attempts were made. Little did they realize that only about 1% of the staff understood the novel change. This near total ignorance engendered fear and this misplaced fear of loss of jobs, status and privileges, galvanized the struggle and antagonism against “Air Nigeria”.

Secondly, the late Hamza Zayyad-led TCPC underrated the power of the Unions. In a reaction to a position paper on the need to get the in-house Unions and internal public to buy into the project, the then TCPC Secretary, Dr. Bernard Very

said, “Thank you for your presentation. We are only concerned about the President and we have briefed him. Once he understands us, we don’t care about any union or person”.

Joji’s novel project and the country paid dearly for these two mistakes.

But sadly, it was not Joji but the airline staff, our nation and its citizens that lost. And the devastating impact of this loss is still surging through the aviation industry with undiminished vigour.

The IFC “New Co”: (2000) – Our Failed Attempts
4.The “New Co” was the tag for the airline that would emerge from the privatization of Nigeria Airways under a new company. It was a concept created by the International Finance Corporation (IFC), the investment arm of the World

Bank, engaged by President Obasanjo on assumption of office in May 29, 1999 to privatize the then national carrier, Nigeria Airways. The Agreement with IFC was signed on October 7th, 1999 by the then Vice President and Chairman, National Council on Privatization (NCP) – Alhaji Atiku Abubakar, on behalf of Nigeria and James D. Wolfensohn, President of the World Bank on behalf of the Bank. The Bank appointed its investment arm – International Finance Corporation – IFC to execute the Agreement whose three-phase-mandate were:

Phase i – Strategic Review and Due Diligence

Phase ii – Sale Preparation involving Action Plan Presentation & Approval

Phase iii – Sale Implementation

With a Team of six Consultants – (Three Technical, two legal and one Accounting), IFC hit the ground running in November 1999, working with the Atiku-chaired National Council on Privatization – NCP, its implementing agency, Bureau of Public Enterprise (BPE), where El-Rufai held sway and Aviation Steering Committee – ASTRIC headed by the then Aviation Minister, late Dr. Olusegun Agagu and his successor, Dr. Kema Chikwe.

At the Steering Committee meeting of April 18, 2000, the joint groups came out with the final clarification of key government objectives, which included:

Establishment of MMIA as a pre-eminent hub for Nigeria and West Africa.
Re-establish Nigeria Airways as a strong national flag carrier.
iii.Transfer capital responsibility for the national carrier to the private sector.

After about 12 months of extensive study, analysis and due diligence of the nation’s aviation industry in the airline sub-sector and related issues never carried out before and since after, the IFC came out with three strategic options:

i.“New Co” – This would involve the emergence of an airline out of a New Company through Joint Venture between the Government and strategic investor/partner.

ii.Liquidation of Nigeria Airways: Government to liquidate Nigeria Airways through a court-appointed process or consider a Management Buy-Out – MBO.

iii. Long-Term Turnaround of Nigeria Airways and subsequent Privatization. This would involve a Management Contract of a 3-5year duration while the Government retains the capital responsibility.

iv.Of the three options, IFC rejected Liquidation on the grounds that it would not meet the Government’s objectives as well as the fact that it would stunt aviation development in the country and lead to monumental losses to the economy in all ramifications.

IFC also strongly advised against Long–Term Turnaround as it would require continuous injection of funds that would be better utilized in other social sectors of the economy.

IFC therefore strongly recommended the “New Co” option after exhaustively analyzing the extensive benefits to the country.

To ensure the success of “New Co”, it further recommended the following:

That 5 key routes – US, UK, Netherlands, France and Saudi Arabia be reserved exclusively for the “New Co” for 5 years.

That from the close of transaction, a three-year transition period would be allowed during which “all intercontinental routes remain single designation irrespective”.

All key routes operationally utilized by Nigeria Airways are grandfathered to the “New Co”.

That, until after privatization, not more than US$2m facility should be sought by Nigeria Airways in order not to further worsen the already strangulating liabilities of the airline and make it more and more unattractive and investor-repellant.

That no staff retrenchment exercise should be undertaken in order not to further enlarge the pension liability which at the time stood at US$43m and more importantly, to avoid inadvertent removal of vital technical staff that will be needed by the “New Co” which, if effected, will impair smooth take-off of the “New Co”.

There were, in addition, over fourteen other prerequisites the IFC required compliance with for successful privatization. Up to this time, the IFC was working with the institutions involved in the privatization of Nigeria Airways, including particularly the Ministry of Aviation that chaired the Aviation Steering Review Committee (ASTRIC).

In July 2000, IFC submitted its Report and recommendations to the Federal Government through the National Council on Privatization (NCP). In August, 2000 the NCP wrote to inform the IFC of Government’s acceptance of the “New Co” and the concomitant recommendations. This concluded Phase 1. IFC was set to move to Phase 2: Sale Preparation.

It was at this stage that rumours and gossips reached OBJ that his Vice-President and the Chairman of NCP, Abubakar Atiku, was planning to buy the “New CO” through IFC. It was like a lie from the pit of hell. But the President who was still hurting from the AP saga was so incensed that he resolved to scuttle the entire well-intended privatization project. Obasanjo’s field commander was the then Minister of Aviation, Dr. Kema Chikwe. OBJ was clear in his directive to the Minister and with a Principal Officer in the Presidency then, who is now a federal legislator, whose role was to programme movement of Memos from NCP to the President and back to NCP in a predetermined manner to stall their implementation, the Minister implemented the President’s directive with sterling performance and clinical finish. At the end, all recommendations of the IFC approved by the President-in-Council were undermined by President’s personal approvals, the result of which included the list below:

The Ministry dualized the London route and signed Open Skies Agreement with the US.

It also got President’s approval for a US$30m facility from AFREXIM to revamp Nigeria Airways.

Lastly, it set up the Aboki Zawa Committee on Nigeria Airways, which sacked over 1000 staff, including top Pilots and Engineers that the “New Co” would have needed.

El-Rufais’s last minute battle from BPE against OBJ’s volt face met with resistance from both the Minister and the President, the Nigeria Airways MD, Yomi Jones, who preferred Turnaround to “New Co”, and Nigeria Airways in-house unions, where ATSSAN, whose membership and leadership comprised the 100 graduates employed by Joji as part of the start-up for Air Nigeria, was the most vociferous. It was sad and ironic.

NCP’s 13-page complaint memo to the President on October 28, 2000 received no attention. Frustrated by the sordid twist, on March 15th, 2001, IFC formally withdrew in a two-page letter to the Minister, signed by its Manager, M.D. Leonard.

Thus, “New Co” suffered still-birth midway, killed, like Joji’s Air Nigeria, by the same person who fathered the great idea, President Obasanjo himself.

BY CHRIS ALIGBE, former Corporate Affairs Manager, Nigeria Airways and Aviation Consultant

To continue next week

I know it's LONG, but it's worth reading.... Do have a great weekend.
http://www.vanguardngr.com/2015/08/national-carrier-our-ten-failed-attempts-1960-2014/

y wont they fail when we bring in 'long-outdated' planes to run airlines? I hope the proposed new one wnt b another gateway to corruption.

*In God and sai baba we trust*

na wa o.. let me continue reading.

ikbnice:
y wont they fail when we bring in 'long-outdated' planes to run airlines? I hope the proposed new one wnt b another gateway to corruption.

*In God and sai baba we trust*

It's not about the age of the planes. It's about management, politics, and bureaucracy.