Nigeria: Ethiopian Airlines, Nigeria Air Battle Begin At The Federal High Court In Ikoyi On Monday 16th

The crisis rocking the establishment of a new national carrier by the Federal Government of Nigeria which is being spearheaded by the Minister of Aviation, Hadi Abubakar Sirika, begins at the Federal High Court on Monday 16^th of January 2023.

The minister and the aviation ministry have been accused of selling out to his preferred bidder, Ethiopian Airlines, its foreign technical partner and majority shareholders papers filled in court revealed.

Airline Operators of Nigeria [AON], a body for eight local airlines in November last year dragged the government to court and listing; Nigeria Air, Ethiopian Airlines, Minister of Aviation, Hadi Sirika and Attorney-General of the Federation, Abubakar Malami, as defendants.

Among other prayers of the local airlines are for the court to stop the national carrier deal and withdraw the Air Transport Licence already issued to Nigeria Air by the Federal Government/Nigerian Civil Aviation Authority.

They also claimed that the firm which served as Transaction Adviser for the transaction, was incorporated in March last year and alleged that the company was linked to the aviation minister.

They also alleged that ATL issued to Nigerian Air did not pass through the normal security clearance.

According to them, the Federal Government’s partnership with Ethiopian Airlines on the project will send domestic airlines out of business by opening up the domestic air travel market to Ethiopian Airlines.

It would be recalled that the government in September last year, named Ethiopian Airlines Consortium as preferred bidder for Nigeria Air. The Minister of Aviation

Following this strong opposition that led to the action of the local airlines’ operators, the court noted that the summons was for the determination of several questions. It outlined the questions to include, “1. Whether on proper construction of the Companies and Allied Matters Act 2020, SEC [Securities and Exchange Commission] Nigeria Consolidated Rules & Regulations 2013 [as amended in 2022], Nigerian Investment Promotion Commission Act, International Civil Aviation Organisation Convention, Civil Aviation Act, Public Procurement Act, Concession Regulatory Commission [Est.] Act, 2005, Federal Competition and Consumer Protection Act, Procurement Processes for Public Private Partnership in the Federal Government under the National Policy on Public Private Partnership [N4P] and Nigeria Civil Aviation Regulations, 2015 and other regulatory statutes on aviation, companies and investment laws in Nigeria; the action, conduct and or decisions in the sale of the shares and operations of the 1st defendant is not invalid, null & void.

“2. Whether on construction of International Civil Aviation Organisation Convention, among others, the entire administrative actions and decisions of the third and fourth defendants in the sale of the shares of the 1st defendant to the 2nd defendant and its consortium is not invalid, void and of no effect having regard to the process embarked upon and the extant local and international laws and regulations on aviation including the terms and condition stated in the request for proposal.

“3. Whether, on a construction of Section 78 [1] & [2] of the Companies and Allied Matters Act 2020, Rule 406 [2] of SEC Nigeria Consolidated Rules & Regulations 2013 [as amended in 2022], section 20 of the Nigerian Investment Promotion Commission Act, Article 7 of the International Civil Aviation Organization Convention, section 33 of the Civil Aviation Act Cap C13 LFN 2004 [as amended in 2006]; the 2nd Defendant and its consortium were competent and qualified to bid for shares in the 1st Defendant and commence business accordingly.

“4. Whether, on a construction of Sections 4 & 5, among others, of the Infrastructure Concession Regulatory Commission [Est.] Act, 2005; Sections 24 & 27, among others, of the Public Procurement Act; and Clauses 2, 3 and 4 of the Procurement Processes for Public Private Partnership in the Federal Government under the National Policy on Public Private Partnership, sections 76-81 of the Federal  Competition and Consumer Protection Act; the selection of the 2nd Defendant and its consortium as the sole bidder in the bidding exercise for the Nigeria Air Project conducted by the 1st, 3rd& 4th Defendants is proper, lawful and valid?

“5. Whether the entire process for the sale and transfer of shares of the in the 1st Defendant to the 2nd defendant and its consortium by the 3rd and 4th Defendants is in line with the provisions of the Infrastructure Concession Regulatory Commission [Est.] Act, 2005, Federal  Competition and Consumer Protection Act, International Civil Aviation Organisation Convention, the National Policy on Public Private Partnership, sections 76-81 of the Federal  Competition and Consumer Protection Act and does not affect the entire process including the selection, approval or grant to the 2nd Defendant and its consortium by the 3rd and 4th Defendants is not invalid and thereby entitling the entire process to fresh bidding  exercise?”

The domestic airlines demanded, in the court document, an order directing the immediate revocation and cancellation of the Air Transport License issued by the Nigerian Civil Aviation Authority to the 1st Defendant.

They also demanded an order of N2bn only as damages “for the injury suffered by the Plaintiffs and still suffering as a result of the wrongful exclusion of the Plaintiffs, wrongful action; unlawful bidding and selection processes and their wrongful projection of the plaintiffs as not having properly, rightly and timely bid for the Nigeria Air project.”

The Federal Government’s choice of Ethiopian Airlines as the core investor and technical partner in the Nigeria Air project, had been described as a win for the East African carrier and a huge loss for Nigeria.

Meanwhile, one of the most embarrassing aspects of a draft document circulating since November 2022 that was recently made open by the main media was the request by Ethiopian Airlines from the Nigerian Government that it be granted 15 years Tax Moratorium as part of its commercial and strategic plan.

However up to this moment, it not known if the government assented to this request, which angered the Airline Operators of Nigeria [AON] and other stakeholders in the country who said it negated the level playing field for all players as craved for because of the desperation of the Minister of Aviation to pull this through before the general elections.

Also, the government agreed to facilitate the expansion of funding or incentive programmes within Nigeria to accommodate the national carrier where the airline would not be ordinarily qualified for access to such funding or incentive programmes.

The government in the draft agreement with the airline, also said it would provide its support to the national carrier in accessing funding and incentive programmes as may be available to support the business objectives existing prior to and after the commencement of operations to encourage the undertaking and performance of the national carrier business objectives.

Speaking recently at a book launch by two of Nigeria’s foremost Aviation Journalists Olusegun Koiki and Chinedu Eze in Lagos, the Chairman of Air Peace, Allen Onyema restated the position of the local airline operators and their reasons for dragging the federal government to court.

Since crisis started, many experts who are familiar with the workings of the aviation industry described the deal as an insult to Nigeria for Ethiopian Airlines, another government-owned airline with the East African government financial support to possess 49 percent equity stake in Nigeria Air, while also enlisting the airline as one of its subsidiaries is pure madness.

By aviation understanding, if not challenged, henceforth, Ethiopian Airlines would be responsible for the negotiation of Nigeria’s Bilateral Air Service Agreement [BASA] arrangement Nigeria would have with other countries.

Apart from the business interests of local airlines operators articulated above, the ordinary Nigeria traveller interest was not considered in the entire agreement which is why every Nigerian must be concerned.

A national carrier is all about Nigerians’ security, convenience of not flying several kilometres to another country before beginning their journey, unnecessary sharing of their personal details with another country, shielded from extortion by more foreign airlines and denied the pride of flying their own.

By Lucky George [Lagos-Nigeria]