Nigeria to merge ailing airlines as new national carrier


Category: News
Published on Monday, 30 September 2013 14:04
Written by BUSINESSDAY
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The Federal Government plan to unveil a new national carrier on Tuesday to commemorate the country’s 53th independence anniversary, has come under criticism from industry watchers.

The development is being viewed as a step back to the dark ages, in view of the current global sentiments towards divestments. BusinessDay learnt that the new airline would come out of the merger of Aero Contractors and Air Nigeria airlines, which are indebted to the Asset Management Corporation of Nigeria (AMCON).
This is coming on the heels of refusal of some international airlines to partner with the local airlines due to the enduring crisis in the sector and unavailability of a credible partner with such credentials.
Bismarck Rewane, chief executive, Financial Derivatives company in the recent release from the Lagos Business School Breakfast meeting observed that the last national carrier was Nigeria Airways, which was however plagued by mismanagement and therefore ceased operations in 2003.
“Back to the dark ages. Governments are divesting from airline business globally, but Nigeria is unveiling a national carrier officially to the public on October 1, which will comprise airlines indebted to the government via AMCON, Aero Contractors and Air Nigeria.
“It is to be funded via a private sector IPO of about N200bn, ($1.24bn). Government will retain a 25% stake, while 75% will be controlled by yet to be disclosed private investors.”
Christoph Franz, chief executive officer of German based Lufthansa said “there is need for a viable airline in Nigeria for Lufthansa to partner with,” Franz said at an interactive session with some select journalists from different parts of the world at Lufthansa Aviation academy last week in Frankfurt, Germany.
The new airline will be funded through a private sector public offering of about N200 billion with government retaining 25 percent stake while 75 percent will be controlled by yet to be disclosed private investors.

By: John Omachonu

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