Federal Capital Territory , Lagos , Rivers
Federal Ministry of Transportation
The establishment of a new National Airline will create new competition in the airline sector, both domestic and international. This will lead to better quality of services, improved reliability, on time performance and value for money – benefitting Nigerian travelers and the economy overall.
Why Nigeria needs a new airline?
The new flag carrier would start with a domestic and regional airline service with a single aisle narrow body jet aircraft fleet (such as the B737 or A320) and add early on an international service to Europe and the USA with a dual aisle wide-body aircraft fleet (such as the B787 or A350).
While the domestic service is based on the AOC and ATL rules and requirements of the NCAA, the international routes will require several additional pre-requisites before a launch is possible. These include membership of IATA and ICAO, operating to IOSA audit standards, which would then enable commercial agreements with other airlines such as interline and codeshare agreements which and other needs to fill a 250-seater long-haul aircraft. There are interim options with and ACMI and wet-lease aircraft solutions to start the international service, however, the sales systems have to be secured.
To enable this flag carrier operation, many support facilities have to be contracted and organized:
· Maintenance support (MRO start-up)
· Ground Services support (own support subsidiary)
· Catering Service (own catering company)
· Crew and staff training (Training company)
· IT Services for systems, global distribution system, operations software (own subsidiary)
· Bank partnerships (international banking service for global payment by credit card, long-term/short-term debt coverage, institutional investor services, lease services)
· Crisis management (support contract with suitable organization in case of an incident/accident)
· Duty Free service in airport and aircraft (subsidiary company)
A PPP should be undertaken in order to provide a fair and transparent process for attracting a Strategic Equity Partner (SEP) who will invest in the new airline and provide other resources and support. The level and form of participation in the airline may evolve over time.
Information will be published as soon as it is available.
The Investment Teaser is attached below.
The Certificate of Incorporation for the new entity is attached below
Project Structuring Report (PSR) received by ICRC
ICRC issued OBC Certificate of Compliance
The federal government on Tuesday restated its commitment to float a new national carrier by December 2018.
Chidi Izuwah, the acting Director-General of the Infrastructure Concession Regulatory Commission (ICRC) gave the assurance in an interview with the News Agency of Nigeria (NAN) in Abuja.
He said that President Muhammadu Buhari has given the National carrier Committee a timeline which must be met stating that a task force was created which would work intensively for the next six months.
Mr Izuwah, who is also a member of the Ministerial Committee on the Establishment of a National Carrier said that it would be private sector driven leading to the concession of the airports. He said ICRC would look at the business case.
“The committee has met and set up a plan. What the plan is, is to make sure that there is a business plan, which is the first thing if you want the private sector to participate.
“You must let them know that if they invest in this business, they will make profit, our plan is to attract investors and request for qualification process, which is part of the ICRC guidelines for procurement.
“Where we identify pre-qualified bidders, who can now bid, which will be a very competitive process all around the world, It’s a very pressurised timeline I must say, but the committee is committed to be able to do that.
“Because the National carrier is very crucial for our economy and in addition the entire aviation infrastructure, what we are doing is that, we just certified the Aviation Leasing Company, it will make access to aircraft easier for our airlines.”
He said that the national carrier would create huge jobs, noting that the aviation sector has been creating jobs for other countries instead of Nigerians stating that the carrier is a pride of every nation.
Mr Izuwah, however, said that government is willing to partner with the private sector to drive the economy.
Abuja – The proposed national airline for Nigeria would be unveiled before the end of the year, the Minister of State for Aviation, Sen. Hadi Sirika has confirmed. Sirika, a former pilot, gave the assurance while receiving the Outline Business Case Certificate of Compliance for the establishment of the airline from Engr. Chidi Izuwah, the Acting Director General, Infrastructure Concession Regulatory Commission (ICRC).
The Minister said that the presentation of the Certificate was a testament on how far the project had gone. The proposed airline will gulp $8.8million preliminary cost and $300 million as take-off cost. The Nigerian government is not fully funding the airline as it has adopted midwifing it via the option of a Public Private partnership, to deliver a national carrier that would stand the test of time and be world class in operation and management.
According to Sirika, Nigeria will receive the first set of five airplanes for the airliner on 19 December. The airline will make profit in three years after operations, he said. “We will make the investments and follow the business plan through private sector management. “We intend to get a 30 aircraft market in five years. But we will begin with five aircraft on the day of lunch. It was not clear whether an order has been made for the aircraft, but the minister in May met a team from Boeing in Abuja. “At Farnborough International Public Airshow coming July 18, 2018 in London, we will unveil the name, logo, colour scheme, the structure and the type of airplane about the national carrier. “We will also place the order for the aircraft at the event,” he said. Sirika explained that the government would step in to cover the funding gap at the onset and ease out thereafter. He said the government would not get involved in the management of the national carrier.
He said Nigeria’s population of over 180 million people is huge enough to support aviation, adding that the airline would take advantage of Bilateral Air Service Agreement (BASA) that the country had with over 70 countries. According to him, it will also take advantage of the Africa Single Air Transport Market and will be the best player if the government gets it right. “But if we don’t, it will become a threat to us. But I believe we are on the right track. The minister also gave an assurance that the national carrier would not kill the domestic airlines operating in the country.
The Acting Director General of ICRC, Izuwah, said the presentation of the Certificate of Compliance was an official green light to proceed with the procurement process. He explained that the government would bring its contribution to kickstart the airline, adding that the amount of equity the partners would hold would determine government contribution. According to him, start up cost over the next three years is about $300 million, but pre-start-up is $8.8 million. “The rest of the investment will be equity injection which will happen in tranches because you do not need all the monies at once.
External capital injection also depends on the profitability of the airline. “Though, you need that initial government financial to make it take off, but what is important is that the national carrier will be entirely private sector controlled. “There will be zero government interference. But if that happens, it invalidates the certificate and the entire process. “This is a bankable business, and the government will get a strategic partner who will invest in the national carrier and when we get through the bidding process, more facts will emerge. “The government will have to spend the pre-start up cost like the brand name, the office and other start up. “ It will be a world class airline with domestic, regional and international operations,” he said. (NAN)