The announcement last week by the Aviation Minister, Stella Oduah, that the government will float a new national flag carrier is an undesirable move. Probably conscious of the shock the prospect of another corruption-ridden, loss-making national embarrassment such as the defunct Nigeria Airways will provoke, she quickly added that the proposed airline would not be wholly state-owned. She said, having reviewed various models, we are working on the best solution for Nigeria. We are working to deliver the national carrier by next year. According to the Minister, Were working on a national carrier that will be publicly owned with limited financial contribution by the government. Government will act as a regulator and provide an enabling environment for this objective to be realised.The only useful statement here is the declared intention to create an enabling environment. Government should scrupulously provide infrastructure and regulation that will foster healthy competition among private sector operators. The haste to have a national carrier, wholly or partly state-owned, is a misplaced priority. Has the minister sorted out Nigerias problems with Virgin Nigeriathe failed joint venture with United Kingdoms Virgin Atlantic' The Nigerian governments involvement with any commercial enterprise almost always fails and ends up gulping millions of the taxpayers money without any corresponding benefit. The fate of Transcorp, ostensibly a private sector firm, reflects this sad reality.The wisdom sweeping the world is for governments to leave the running of commercial enterprises to the private sector. In Nigeria, the governments direct ownership of aviation sector enterprises has always been a dismal failure. National Aviation Handling Company, Skypower Nigeria and Nigeria Airways are bywords for incompetence, corruption and waste. A 2000 report by the International Finance Corporation, a World Bank affiliate, cited mismanagement, overstaffing and official interference as factors that ruined the national carrier which was finally liquidated in 2003 with about $60 million in debts. From a fleet of 30 aircraft in 1984, it had only three by 2000two of them on lease.In 2000, the IFC pulled out in disgust from a consultancy agreement with the Federal Government to restructure the Nigeria Airways for privatisation, citing lack of commitment to divestment by the government. Three major European airlines, Swissair, Lufthansa and Air France, also withdrew from the running to become technical equity partners in the carrier. Since then and the subsequent failure of the Nigeria-Virgin Atlantic arrangement to create a viable national flag carrier, some private airlines have been filling in the gap and using destination slots under Bilateral Air Service Agreements formerly utilised by the Nigeria Airways. Given the terrible experience of the past, therefore, it is amazing that Oduah considers a national flag carrier as priority rather than the dire infrastructure deficit in the aviation sector.Globally, the designation of flag carriers or national airline or a national carrier has lost its attraction. It is said that the vast majority of the worlds airlines are today privately owned. This includes most former national carriers, which have been turned over by their governments to private ownership. The government does not need to promote a new airline as a national carrier. Rather, it should foster robust competition among private operators, who after meeting certain standards such as fleet size and age, efficiency and safety, can compete transparently to be designated as the national flag carrier for a fixed period.European governments have privatised state-owned airlines and fostered competition among domestic airlines. The United States disavows national carriers in favour of Open Skies, an international policy concept which calls for the liberalisation of rules and regulations on the international aviation industry, especially commercial aviation. It seeks to minimise government intervention and liberalise aviation markets.Trans-border mergers and acquisitions also mean that a national flag carrier need no longer be locally-owned. For instance, British Airways and Iberia of Spain have merged, meaning that Britains national carrier is no longer wholly British-owned. Oduahs idea seems to have lost sight of this.The Airline Operators of Nigeria cites lack of infrastructure, excessive taxes, fees and levies, dearth of qualified personnel and lack of access to credit as the bane of the aviation industry in Nigeria. The country often falls short of safety standards set by the International Air Travel Association while its airports are not efficiently run. The Minister and President Goodluck Jonathan should concentrate on solving these problems, not dissipate resources on a new national carrier. One will emerge when infrastructure, funding and favourable regulations encourage private sector investment in the sector.The government should work with the Central Bank of Nigeria, which has already set funds aside for the sector, and local and foreign lenders to encourage single-digit interest loans to the sector. There is a strong suspicion that some officials seeking the familiar route of embezzlement are promoting the national carrier ruse for self-enrichment. They should be frustrated in the unpatriotic bid.
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