The Fairfax Africa Fund, backers of the ill-fated national carrier, Nigeria Air, has issued a stark forecast, predicting the collapse of all domestic airlines currently operating in Nigeria amidst the country’s worsening economic crisis.
According to Zemedeneh Negatu, Global Chairman of the Fairfax Africa Fund, only one airline among Nigeria’s domestic carriers has a chance of weathering the economic storm.
Negatu’s foreboding projection follows a statement by Prof. Obiora Okonkwo, Chairman of United Nigeria Airlines, in which he described Nigeria’s aviation sector as being on “life support.”
Addressing Okonkwo’s concerns, Negatu expressed that the current state of domestic airlines is dire, insisting that no amount of government bailouts—no matter how generous—could save the majority of them from inevitable collapse.
“None of Nigeria’s airlines operating today, except one, will survive even if they were to be given tens of millions of dollars in government (taxpayer) bailouts in perpetuity,” Negatu asserted, without elaborating on the specific reasons behind this grim outlook.
However, the Fairfax chairman did not stop at predictions.
He levelled serious accusations against two leading Nigerian airlines—Air Peace and United Nigeria Airlines—alleging that they had orchestrated the failure of Nigeria Air through legal actions spearheaded by the Airline Operators of Nigeria (AON).
Negatu claimed that Nigeria Air would have been a lifeline for the industry, potentially stabilising it and attracting significant foreign investment, but that these efforts were thwarted by what he described as self-serving interests masked as patriotism.
“Promoting self-interest under the guise of ‘patriotism’ is not a viable long-term business strategy,” Negatu declared. “The efforts by United Nigeria and Air Peace to block a substantial Foreign Direct Investment (FDI) into Nigeria, including significant American investment, will deter others from considering the much-needed FDI in the sector.”
Negatu’s comments come in the wake of a landmark judgment on August 5, 2024, by Justice Lewis Allagoa of the Federal High Court in Lagos. The court ruled the sale of shares in Nigeria Air to Ethiopian Airlines as illegal, citing multiple violations of existing laws, including the Companies and Allied Matters Act and Securities and Exchange Commission regulations. The court invalidated the entire bidding process, revoked Nigeria Air’s Air Transport License, and permanently barred the former Minister of Aviation, Hadi Sirika, and Ethiopian Airlines from further involvement in the project.
Reacting to Negatu’s dire forecast and allegations, Meanwhile, Daily Sun reported that Prof. Obiora Okonkwo, spokesperson for the Airline Operators of Nigeria (AON), dismissed the claims as misguided. He pointed out that the harsh economic conditions affecting the aviation sector are a reality everyone is grappling with and not a result of Fairfax’s predictions.
“It doesn’t take a soothsayer to know that the economic environment in Nigeria is harsh and doesn’t only affect the aviation sector,” Okonkwo said.
He added: “If anything happens to airline operators in Nigeria, it won’t be because of Negatu’s prediction but due to the broader economic environment. The survival of Nigeria’s aviation sector so far is because the ‘evil’ intentions of Ethiopian Airlines and their collaborators under the guise of Nigeria Air failed. If it had succeeded, it would have sent the aviation industry to an early grave.”
On the accusation that Air Peace and United Nigeria spearheaded the downfall of Nigeria Air, Okonkwo was emphatic in his defense. He acknowledged that both he and Allen Onyema, Chairman of Air Peace, are indeed members of the AON, the body that took the federal government and Ethiopian Airlines to court, effectively safeguarding the aviation sector from what he described as a catastrophic plan.
“Ethiopian Airlines had the opportunity in court to present evidence of their investment, and if they had done so, the outcome—which permanently banned them from owning shares—would have been different,” Okonkwo argued.
He continued: “We can understand Negatu’s pain because from being a transaction advisor, he was to get three percent shares from Nigeria Air for doing nothing and also be the only person to do all the procurement. He is a cry baby and if he says that Air Peace and United Nigeria are the ring leaders, then we are very proud to be part of the AON which saved Nigeria from their dubious transactions. We consider ourselves heroes because they couldn’t contradict any accusations that the AON made against them in court which are that the transaction is dubious and they just wanted monopoly which would have drained our economy.
“The then administration signed that the government would indemnify ET from every debt they would have accrued. In the agreement, ET wasn’t supposed to invest money to buy aircraft on behalf of the partnership. The airline would continue to lease to the partnership on wet lease, so the money they would have been indemnified against would have been in billions of dollars to buy aircraft for ET, which they would in turn, lease to Nigeria. ET and their Nigerian dubious collaborators would have been the only ones profiting. There would have been nothing for Nigerians to gain,” Okonkwo said.
In a rapidly-changing landscape, the battle for the soul of Nigeria’s aviation industry remains fierce, with accusations and counter-accusations flying between stakeholders. As the dust settles on the Nigeria Air scandal, the future of the nation’s aviation industry is uncertain due to the economy and the spectre of earlier disputes.
