Abuja, Nigeria : The Nigerian government has suspended its much publicized national carrier project (Nigeria Air) citing “strategic reasons” for its decision, Minister of State for Aviation Hadi Sirika announced on Wednesday.
I regret to announce that the Federal Executive Council has taken the tough decision to suspend the National Carrier Project in the interim. All commitments due will be honoured. We thank the public for the support as always. — Hadi Sirika (@hadisirika)
Hadi Sirika said the decision was made at the Federal Executive Council meeting led by President Muhammadu Buhari but did not give details of the “strategic reasons” for which the project, named “Nigeria Air,” was halted.
“It has nothing to do with pressure from stakeholders and it also not for political reasons,” Sirika told reporters in Abuja.
“The decision to come up with national carrier in the first place was as a result of the lack of capacity of the existing carrier to meet demands.”
During the unveiling of its logo and name in July, the minister said the national airline would be driven by the private sector, with the government controlling only 10 percent of the equity.
Sirika on 18 July unveiled the logo of the proposed airline on the sideline of the Farnborough International Air Show in UK.
With an initial capital of 300 million U.S. dollars, the national carrier was supposed to begin operation in December.
Sirika said the government truly showed serious commitment to the project and its suspension would not affect the government’s credibility before interested partners.
The colour is green white green, while the logo is Eagle. Sirika said the country was finally on track to inaugurating the national flag carrier to commence operations before the end of the year.
“Following the extensive market research, the branding of our new airline, Nigeria Air, demonstrates a true flag carrier of our nation, soaring through the skies in the shape of our nation’s eagle.
“The Nigerian Government will support the launch of the new flag carrier with viability gap funding, in a Public Private Partnership (PPP) arrangement to deliver a national flag carrier.
“It will be guided by the international ICAO standards, that will stand the IOSA audit from the start, and lead to a fast IATA membership for international operation,” he said.
A week after, he clarified that Nigeria would not pay 300 million dollars for a five per cent stake in the proposed airline.
The minister said the eight million dollars to be provided by the Federal Government represented the startup capital for offices and other facilities required for takeoff.
He added that the 300 million dollars was the entire airline cash flow funding requirements for aircraft, operations and working capital for three years 2018 to 2020.
According to him, this funding can be in the form of equity or debt.
“The financial model estimates cash flow requirements as follows: 2018 – 55 million dollars, 8 million is included here; 2019 – 100 million dollars and 2020 – 145 million dollars.
“In order to ensure take-off of the airline in 2018, the government will provide $55 million upfront grant/viability gap funding to finance startup capital and pay commitment fees for aircraft to be leased for initial operations and deposit for new aircraft whose delivery will begin in 2021.