Nigeria Air talking to Airbus, Boeing for short-haul fleet

The Nigerian Federal Government (NFG) has commenced discussions with Airbus and Boeing to acquire the first three narrow-body aircraft for the country’s new national carrier, Nigeria Air (Lagos), according to local media reports.

A Request For Proposal published on March 7 stipulates a timeline for all expressions of interest for investment in the startup to be submitted before 1500L (1400Z) on May 10, 2022.

In a public notice published on March 28, the Nigerian Civil Aviation Authority (NCAA) confirmed that Nigeria Air had applied for an Air Transport License (ATL) to operate scheduled and non-scheduled passenger and cargo services within and outside Nigeria.

Licensing and certification of the airline by the NCAA has been slated for June 2022 while July 2022 has been put forward as the targeted launch date of the new carrier on short-haul routes, according to the RFP teaser published by transaction advisors Airline Management Group, Tianaero Nigeria Ltd, and Avia Solutions on March 3, 2022.

The wet-lease in June 2022 of A320 Family aircraft is also provided for in the timeline provided in the RFP teaser.

The first aircraft will need to arrive in the country in June 2022, report Nigerian newspapers BusinessDay and Daily Independent.

Long-haul operations would commence two years later after completion of an IATA Operational Safety Audit (IOSA)audit. “We plan to increase the fleet to 30 aircraft in five years. These aircraft will include long-haul and short-haul aircraft,” BusinessDay cited an unnamed source close to the airline.

The airline has chosen Abuja as its head-office and operational base. Its website is to be launched soon. Personnel have already been selected, including the managing director, project managers, chief financial officer, chief commercial officer, and operations manager.

According to the RFP, the federal government is looking for a 49% shareholder to be a private sector consortium including an international airline as technical parter, while 46% shareholding will go to Nigerian financial and institutional investors, resulting in total Nigerian shareholding to comprise at least 51%, including a 5% stake retained by the government.

The federal government first disclosed plans for a private-public partnership (PPP) for a new national carrier at the 2018 Farnborough Air Show, based on a single-aisle West African, and a double-aisle international strategy. At the time, Aviation Minister Hadi Sirika claimed the government was in "advanced" talks with Airbus and Boeing and financing houses over a fleet decision. The government at that time was also talking to Ethiopian Airlines and Qatar Airways to become a strategic equity partner in Nigeria Air. The original launch date for the carrier was December 2018, but in September that year, the government shelved its plans, reportedly to focus on the 2019 general elections. The outbreak of COVID-19 further delayed progress, but by 2021, the government rekindled its plans.

Nigeria Air is one of the federal government’s aviation public-private partnership (PPP) projects. Its aim is to allow Nigeria to benefit from under-utilised bilateral air service agreements, especially internationally; African open skies in terms of the Single African Air Transport Market (SAATM); a growing economy and middle class in Nigeria; lack of hubs in West Africa; and to bring in more foreign investors. According to the RFP teaser, Nigeria expects significant market growth. Supply in the domestic market has been contracting while foreign airlines dominate its international market.

The market analysis for Nigeria Air has identified at least 41 routes from Abuja (of which 30 are currently unserved and 11 have existing competition) and 44 from Lagos. The suggestion is for 10 domestic routes to be served with narrow-bodies; 20 international regional routes, also to be served with narrow-bodies; and 11 international long-haul routes to be served with wide-bodies.

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Abuja moots Nigeria Air debut in late 1Q22

 

The launch of Nigeria Air (Lagos), the nation’s new national carrier, has been postponed to the first quarter of 2022 following delays caused by the COVID-19 pandemic, says Aviation Minister Hadi Sirika.

Speaking to reporters in Abuja following a meeting of the country’s Federal Executive Council (FEC), he said the government was committed to establishing a national carrier, but that initial plans for a 2021 debut had been delayed by the health crisis.

However, he said, the project was “still in top gear” and more information would be available in the next few weeks.

“We are coming back to the council, hopefully in the next two weeks, to present the memo on the national carrier. We went to the council to approve the outline business case for the carrier; then, the council raised some questions and asked us to go and look at the memo again and bring it back. So, once it comes back and the outline business case is approved by the council, we will go to the full business case which is now going to the market and establishing the national carrier,” he was cited by This Day and Vanguard newspapers. He said updates on the progress would be provided after the next presentation to the FEC.

Sirika expressed optimism that prospects for the airline would be better in 2022 due to greater market recovery, adding that Nigeria had the market size to sustain a national airline, also keeping in mind the populations in West and Central Africa, which it would serve.

As previously reported, the government is looking for a private/public sector partnership to establish the airline, first mooted in 2018. Private investors will drive the project by raising USD250 million, while the government will retain no more than a 5% shareholding.

The document confirmed Sirika's comments, indicating that the business case outline of the project had been completed, with the procurement phase slated as the next step.

According to initial information, the new flag carrier would start with a domestic and regional airline service with a narrow-body fleet and early-on add international services to Europe and the US with B787s or A350s.

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Nigeria's new flag carrier to be private-sector financed

 

Nigeria’s envisaged new national carrier, Nigeria Air (Lagos), is to be private-sector driven and financed, with the government proposing to hold no more than 5% of its shareholding.

This is according to a leaked document of the country’s Federal Ministry of Aviation, which provides a long-awaited first update on the Nigerian Federal Government’s roadmap towards the new flag carrier, which was first announced in 2018.

The document, seen by Economic Confidential, a Nigerian economic news magazine, proposes that a consortium of private investors raise USD250 million to start up the airline, with the government providing financial guarantees and “fiscal incentives”.

“The national carrier project will be private sector-driven, with the government holding not more than 5% of the shares. The private sector consortium may comprise reputable international airlines, leasing companies, aircraft manufacturers, financial, and institutional investors. USD250m approximately is to be raised to start up the airline by private investors,” the document reads.

The government would provide the required support by creating the enabling environment in terms of sustainable policies, allocation of routes, provision of financial guarantees, and ensuring "fiscal incentives to sustain the success of the airline".

The document indicates that the development phase of the project has been completed, with the procurement phase slated as the next step. It says an outline of the business case has been completed. “The next set of steps will involve the commencement of [the] procurement phase by placing [an] advert for a request for qualification in the national dailies and the foreign media," the document reads.

ch-aviation research found that a compliance certificate was already issued on July 8, 2018, by the Infrastructure Concession Regulatory Commission (ICRC), an agency of the Federal Government responsible for the development and implementation of public-private partnership frameworks. The ICRC in 2018 had also completed a feasibility study of the proposed airline.

As previously reported, plans for Nigeria Air were first revealed at the July 2018 Farnborough Air by Aviation Minister Hadi Sirika. Two months later, the government shelved the idea due to objections within its ranks to using public funds to set up the airline. The airline was incorporated as a private entity on July 18, 2018, according to the official document - lodged with the Corporate Affairs Commission of Nigeria - seen by ch-aviation.

Then, in May 2019, Sirika announced the government had now earmarked NGN47.43 billion naira (USD132 million) in the 2019 budget for the proposed airline. The funding was to enable the start-up to launch operations before the introduction of private equity funds.

In November 2020, the Aviation Ministry announced it had again earmarked funds for the establishment of Nigeria Air within its NGN78.96 billion (USD204.9 million) 2021 budget for the implementation of the aviation roadmap, which it said, would be implemented through a public-private partnership. All necessary agreements and arrangements with other partners had been worked out, "making 2021 the year the new national carrier would be realised," Sirika had said.

According to project information on the ICRC website, the new flag carrier would start with a domestic and regional airline service with a narrow-body fleet and early-on add international services to Europe and the US with B787s or A350s.

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Nigerian gov't denies lack of investors for new flag carrier

The Nigerian Minister of State for Aviation Hadi Sirika has denied that a lack of investors was the reason behind the recently announced suspension of the establishment of a new flag carrier, Nigeria Air (Lagos), Sahara Reporters has written.

"Among the reasons being bandied around for [Nigeria Air's] suspension, especially in the social media, is the absence of interested and ready investors. This couldn’t be farther from the truth, as the national carrier project has an avalanche of well-grounded and ready investors," Sirika said.

He went on to name Ethiopian Airlines, Qatar Airways, Afro-Exim Bank, African Development Bank, Standard Chartered Bank, Airbus, and Boeing as entities which showed interest in financing the start-up carrier in one way or another.

Sirika also underlined that the project is suspended, not dropped and that the Nigerian government intends to return to the idea in the future.

Minister of Information and Culture Lai Mohammed suggested earlier that the project was suspended to allow the government to find a better "funding structure", without going into details as to what it meant.

Although Nigeria Air is to be a new flag carrier for the country, the government did not want to become the sole founder and shareholder in the new undertaking. According to the original plans, the state wanted to keep just a 5% share for itself.

Nigeria Air was unveiled during the 2018 Farnborough Air Show in July. Sirika said then that the carrier had been in "advanced" talks regarding aircraft orders and their financing. Nigeria Air planned to launch operations in December this year.

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