From The Nation
Nigeria Airways was a fully owned parastatal by the government and so the government virtually handled everything; management and board appointments were all by the government. When we talk about owner-manager syndrome, government also is part of that syndrome because the minister will determine who becomes the MD. Sometimes he determines which route you have to fly.
The Minister will determine whether you are going to increase fares or not. One minister, Graham Douglas, sacked the entire board and management of the airline for increasing fares without his permission. There was a minister who cancelled contract agreements we have overseas on ticket sales that eventually cost the airline close to five million pounds. He just cancelled it and along with the management who advised him on that, appointed a new sales agent in UK, without looking at the agreement with the earlier travel agent, CES Travel. Under three months, the minister was out of the office but the problem he created cost the airline five million pounds in out-of- court settlement even with the assistance of the then Minister of Justice Mr. Akpamgbo.
Also, one of the greatest killers of the Nigeria Airways was the devaluation of the naira during the Babangida administration. Once the naira was devalued, Nigeria Airways debts in dollars skyrocketed in terms the naira needed to pay. That devaluation set the spiral on and at the same time same government said Nigerian Airways will no longer receive subvention but should rather fund itself. The debt of the Nigerian Airways in dollars remained stable but in terms of naira, it was so much that the airline could not handle it. We could not pay our debts through the International Air Travel Association (IATA) Clearing House where everything was being processed. We could no longer pay and there was some level of irresponsibility also from Nigerian Airways’ station managers overseas. Anything they did, up to buying furniture, they put it through the Clearing House, which is meant for airline operation. They used it for other expenditures thus increasing our indebtedness. When we could not pay, IATA by 1997/1998 expelled Nigerian Airways from the Clearing House. Nigeria Airways was still a member of IATA but was expelled from the Clearing House.
Now, that became a big problem because what it means is that you could no longer fly any passenger beyond your destination. Immediately they expelled us, no airline would have a relationship with us we came to a point to point operator which was very devastating as it shrank our market share and dwindled revenue further. Any airline that is a point – to – point operator cannot really have the good market share that will sustain its operation. That’s what happened to us. We now started having some aircraft on the ground. Sometimes, we had to cannibalise one aircraft to keep another flying because we no longer had the money to do maintenance. But the only good thing was that we had checks and balances in terms of technical standards. If the engineer didn’t maintain the aircraft well, a pilot would walk into the aircraft, check it and come down and say sorry I’m not taking this flight. So, we had those standards then which were not in other airlines.
Babagida now put in place a policy to commercialise and privatise the airline. That was when he set up the Technical Committee on Privatisation and Commercialisation (TCPC) led by the late Hanza Zayyad, who was the chairman. It was part of the structural adjustment programme that Babagida came up with which was good, but the fact of the matter is, at the time this was happening, privatisation of airlines was a new concept. It was only one airline, British Airways that was successfully doing it, but hadn’t completed it. British Airways services were poor and the British Prime Minister, Margaret Thatcher, was determined to make a change. She carried out the first privatisation of an airline successfully in the world. Nigerian Airways was to be the second one globally under the Babagida administration. It was at the threshold of taking off when Babagia himself killed the policy.
Captain Mohammed Joji had come in as Managing Director (MD) after the Presidential Task Force that was to prepare the airline for commercialisation left. He came in as MD and took the privatisation exercise with passion working with TCPC. We had gone a long way on that when, suddenly, everything went awry again. As at the time, we had evolved the strategy of privatisation. The strategy was to leave Nigeria Airways as domestic and regional operator while from Nigeria Airways a new international airline called Air Nigeria was to emerge. That was the first time ever that Air Nigeria came up. This was 1992/1993 and we had got two airlines, Swissair and Sabena that were prepared to be part of this privatisation as core partners and eventually core investors. Air Nigeria was to use four aircraft from Nigeria airways, the DC10s and A310s series that we had and they would pay Nigeria Airways $1million monthly as lease rental which it will now use to expand its domestic and regional operations and become a very formidable operator. This was the strategy. When a former Nigerian Airways Director of Engineering, Agom became the new MD, he decided that everything Captain Joji did, he would torpedo.
That was how the entire process of privatisation was torpedoed. He sent the technical team from Sabena and Swissair packing. Everything that had been done he aborted, ran back to the ministry and the ministry was happy that a first class parastatal had again come under its control. That was the end. Agom stayed two years and was removed. Another person came, Group Captain Peter Gana, a serving Airforce officer. There was no change as more of our aircraft, DC10 and B737 were seized. The last DC10 that we bought was seized overseas and we couldn’t retrieve it. We had no money to pay, so we were operating with whatever we had.
Our fortunes from then never rose again until when, in 1998, Jani Ibrahim was appointed MD. He was a business man, not an airline man. He was coming from the oil industry. He studied the situation and concluded that to survive, we would need a joint venture. So, he discussed with British Airways and went into a joint venture with them. British Airways generously deployed a 747, which painted it in the colour of Nigerian Airways. They were operating it on behalf of the JV and they gave us 100 seats on every flight free. We didn’t have to pay anything because it was our route but we could sell 100 seats, and use the revenue to build up Nigeria Airways and we found that every month, we were earning N100 million. We could pay salaries and pension while we were using revenue from all other operations to keep the airline going and pay some debts. Jani was proceeding to extend that joint venture to the US when Obasanjo became President of the country. The rest is now history today.
Read more at The Nation