Nigeria Air grounded, with $250m investment in limbo after court decision

By Eniola Akinkuotu

Posted on Wednesday, 16 November 2022 11:07
President Buhari has big aviation plans for Nigeria, including a new national carrier. REUTERS/Akintunde Akinleye

A $250m commitment by Ethiopian Air, MRS Oil and Gas and Skyway Aviation Handling Company Plc (SAHCO) is now in limbo after a Nigerian court ordered the suspension of the planned take-off of the country’s proposed carrier, Nigeria Air. 

Under the arrangement, Ethiopian owns a stake of 49% while MRS Oil and Gas and Skyway Aviation Handling Company Plc (SAHCO) – both Nigerian investors – own 46% of Nigeria Air. The Nigerian government will control the remaining 5%.

However, a Federal High Court in Lagos – according to documents seen by The Africa Report – has given an order of interim injunction restraining the Nigerian government from executing the proposed establishment of Nigeria Air, which has already been issued an operating licence.

The court action was filed by certain domestic airlines – Azman Air, Air Peace, Max Air, United Nigeria Airlines and Top brass Aviation – who alleged that the sale of shares of the proposed national carrier violated extant Nigerian laws.

The plaintiffs asked the court to stop the defendants – Nigeria Air Limited, Ethiopian Airlines, the minister of aviation, and the attorney general – from commencing the take-off of the carrier.

Conflict of interest

The plaintiffs asked the court to suspend the licence given to the proposed carrier, alleging that a company belonging to the aviation minister served as transaction adviser for the transaction, which constituted a conflict of interest.

However, Aviation Minister Hadi Sirika has hit back saying no court or law can stop the national carrier.

Nigerians have continued to express mixed feelings about another national carrier since the failure of two previous flag carriers – Nigerian Airways and Air Nigeria.

However, the government firmly believes that this new carrier will work because of its proposed set up.

According to the strategic business plan, which was seen by The Africa Report and had been submitted by the consortium, the airline is intended to use six Boeing 737-800 and two Boeing 787 in the first year to operate to 17 destinations. This will include 12 domestic destinations at the beginning and then three African destinations as well as two international routes, subsequently.

By the 5th year, the government expects that the airline will have 15 Boeing 737-800 and eight Boeing 787 that will go to 28 destinations, including 15 domestic, five African and eight international routes. The airline seeks to carry two million passengers in the first year and 5.5 million by the fifth year. The revenue projection is $280m in the first year and $1bn by year five.

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