After shock revelations by a former Air Nigeria finance director, the airline closed its operations in September. The country's other top airlines have racked up such huge debts only a government bailout can save them.
Visitors to Lagos's Murtala Muhammed International Airport will have noticed a buzz of construction work this year. A herd of cranes cluster on the skyline and 'Work in progress' signs adorn the peeling walls of the airport, which served 2.4 million passengers last year but has had no major upgrades for more than three decades. The flurry of activity is part of a push by aviation minister Stella Oduah to establish modern airports in Nigeria. In its new-found zeal, the government has embarked on a project to up- grade all 11 state-run airports simultaneously.
Behind the buzz, the aviation sector is in crisis. Regulators grounded five of Nigeria's nine domestic carriers this year amid safety concerns. "What is required for aviation in Nigeria is for the government to focus more on safety policy and then allow the private sector to bring in the money for infrastructure," a Lagos-based financial analyst says. "Instead, they have a band- aid approach to the problem."
In the quarter since June, domestic ticket sales plummeted by a third as shaken passengers opted to go by road, according to the aviation ministry. Both travellers and airlines have been counting the financial cost as just 30,000km of paved roads span a landmass covering almost 1bn km2. Ministers and government officials shun commercial flights. Weary Nigerians joke that that internal flights will arrive as scheduled on the dot – 24 hours later. Private jet purchases are up 7.5% this year, according to ministry statistics.
The disintegration of the aviation sector began in April, when John Nnorom, a former finance director of Air Nigeria, resigned. In an open resignation letter, he called the international airline's 11-strong fleet "flying coffins". An entirely avoidable major plane crash was waiting to happen, Nnorom warned.
"Before you have a plane crash, there must be symptoms. I told the ministry of aviation that there are symptoms enough to give you sleepless nights," Nnorom said. His former boss, Air Nigeria chairman Jimoh Ibrahim, was not impressed.
A Dana Air plane hurtled into a Lagos slum on 3 June. A day earlier, a Nigerian cargo plane crashed in lashing rain in Ac- cra, Ghana. The two accidents left 173 people dead. Oduah has allowed Dana to fly again while an investigation into the crash is underway.
Rotten at the core
Since then, attention has turned to the government's safety policies. Into the void sparked by the shock and search for answers, whistle-blowers have unveiled a litany of financial misdeeds that suggests a sector rotten at the core.
Air Nigeria, the flagship international carrier abandoned by Virgin boss Richard Branson in June 2010, has undergone a very high-profile meltdown. After officials grounded the fleet citing safety concerns in June, Ibrahim resigned "temporarily" in September.
Air Nigeria closed down its operations on 10 September, citing "staff disloyalty and environmental challenges". The Nigerian Civil Aviation Authority had already suspended the company in June because of concerns about its finances.
"We could not afford to pay for the changing of the engines. We were sending aircraft from Nigeria to Egypt and other countries, only for the engine in the one we were sending to be dis- mantled and fixed in another one that had been on the ground for one year," Nnorom said.
The politically connected Ibrahim has come out fighting vigorously. Ibrahim told The Africa Report he reduced debts left by Branson from N275bn to N222bn, while funds withdrawn from the intervention fund were managed by United Bank for Africa on behalf of Air Nigeria. He dismissed strikes by members of staff who had not been paid for five months at the time of his resignation as "unprofessional". Ibrahim said: "I never touched a single kobo [penny].
Air Nigeria is a member of IATA [International Air Transport Association], so to insult my management is to insult the IATA."
The top three carriers – Arik Air, Aero Contractors and Air Nigeria – racked up debts of N85.5bn between them, a Senate committee hearing revealed in June. The demise of Air Nigeria has left Arik Air and Aero Contractors establishing a duopoly in the sector.
Officials say the government is planning a new fund of between N300bn and N500bn ($1.8-$3bn) that will allow for the purchase of new aircraft. "Whereas in the past the fund was accessed to pay off debts, this time it will be for the technical side, that is to say maintenance and safety," says Oche Victor Elias, a technical adviser to the aviation ministry.
Other sweeteners include an abolition of taxes on the import of spare parts. The government also plans to promote cargo flights along similar lines to a Kenyan model that allowed the country to double its cargo industry in three years.
Terminal illness
A lack of coherent strategy has left many scratching their heads. The Murtala Muhammed Airport Terminal 2 for domestic flights, funded entirely by private investors, is a case in point. "Granted, it has issues but that was because the financing was poorly structured and the government reneged on many of the concessions that would have made it bankable, including Arik refusing to use it," says an official involved in drawing up the feasibility study.
There are already signs of Nigeria losing out. FastJet, founded by easyJet's Stelios Haji-Ionnaou and modelled on the European low-cost airline, aims to carry 12 million passengers annually, up from 500,000 at present.
Courting oil and mining companies is at the heart of its growth strategy, but officials say it will – for now – give Africa's oil giant a wide berth. Instead, bases will be es- tablished in Kenya, Ghana, An- gola and Tanzania●
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