Pukkah:


Some solutions have been proffered.

The ‘Presidential sub-committee on solutions to challenges facing the airline industry in Nigeria' examined 10 critical areas of the sector - high operating cost, aviation fuel, infrastructure at the airports and air space, multiple tariffs and charges, training and Central Bank of Nigeria Forex policy - and warned of consequences should the government ignore its report.

The report included advice that the government should provide "scheduled domestic airlines special airline financing assistance in form of long term soft loans from under the Nigeria Airline Industry Review Action-Fund recommended to be established by the Federal Government with Nigerian banks." The imperative of this is clear. A viable airline industry will boost economic activities in Nigeria but when the ‘Giant of Africa' is unable to provide effective and safe airline services, and continues to have severe structural challenge within its financial service industry this is not likely to happen.

Let's stop deceiving ourselves. The nation cannot afford another series of air crashes. 2005 was only five years ago.

manny4life:


IMO, given the situation of things, the airline business is a risky one; one that has to be thoroughly planned out and executed; however given the bold portion into consideration, I am hoping the banks or whoever financing this package for them are prepared in the case of default. I wish them luck and success.

Pukkah:

This is what I have been trying to say.  The default risk of an airline in Nigeria is very high and this will affect the flow of funding for the business.  Even when the promoters own their own equity and are not in need of borrowing, the question they will ask themselves is: what's the expected rate of return on this business? If this question is not asked, or the negative answer ignored, that means the business is being undertaken for reasons other than strict business analysis, e.g. pure ego or money laundering.

This is why I earlier wrote that I'm surprised that people are still going into aviation business in Nigeria while other sectors with higher return rates are available.

mustspin:

@ the bolded, irrespective of the person involved, the CBN single obligor limit for banks does not allows for any bank to give out such huge amount to any single entity, dont ever think that any bank can give out such huge amount to any single entity cause of default risk, not even any government which is not expected to default. thats y government and even companies like GTB issue bonds

manny4life:

Exactly!

I stressed the same concern few months ago when this was rumored that he bought this airline, if I recall at the time, it was rumored for $300million. I asked, if risk was calculated? I just asked so much questions that some proponents bega calling me names.  Anyway, bottom line is that airline business IMO is so not a viable business. Even the ones here with high customer demand, low CASM with either average or low variables aren't performing so well.

I guess it all boils down to business financial responsibility. I guess it's easy to sit and  calculate 150 ppt x $100 per trip say Abuja, multiply total by 10 trips, oh wow it bring in revenue but cost (a very important factor) is solely underestimated.


Well, I really wish them LUCK and SUCCESS,  Let's hope and see how things work for them.

Talking about other business, I would rather him approach NRC, sign a consortium agreement with a SW govt; fund the company and start a decent rail transport initiative with that same $30million.

Pukkah:

Yes, that sounds like a good business that will produce a steady flow of revenue especially with the high rate of accidents on our dilapidated and expired roads.  

How about agriculture?  As things are in Nigeria today, you can't go wrong with food production.  It's so bad that we've starting importing vegetables - pineapples, beans, etc even from African countries let alone meeting the production of wheat or rice. How about real estate, construction of roads, health care delivery, assembly of vehicles, etc?

I don't wish the owner of First Nation ill luck but it'll be nice to review the business after say a period of 3 years.

Gbawe:


Adeola is the founder of GT Bank. One would think, through the bank, he has gained vast knowledge and clout in the money Market. Would it then be difficult to raise this amount ? Similar for Ajimobi, although not banking derived.

mustspin:

well, $30 million is huge money and i dont think any reasonable person is gonna be lending that out to a company or sector without fundamentals.

moreover, where is the proof that the airline belongs to tinubu?

Pukkah:

This is a good question which is yet to be addressed or proved. This is why I wrote 'the owner of First Nation' in my post before this on this thread. The ownership of First Nation airline at best remains a conjecture.

anonimi:

Fashola's Senior Special Adviser for Nairaland Social Network has so far confirmed that the godfather of his boss owns the airline from $30m bank loan.
Una think sey Eko Ile no sabi the thing wey im dey yarn concerning dem Area Father anymore

mustspin:

haba, can u just read wot u posted yourself,
no nigerian bank will lend out that huge amount of money to a single entity be it company or private. its not in line with the CBN rule

anonimi:

Fashola's Senior Special Adviser for Nairaland Social Network has so far confirmed that the godfather of his boss owns the airline from $30m bank loan.
Una think sey Eko Ile no sabi the thing wey im dey yarn concerning dem Area Father anymore

Da Doctor:

ILEKE IDI AND EKO ILE

HOPE NOW U AGREE THAT YOUR BOSS HAS USED HIS LOOT TO GET AN AIRLINE?

THIS SETTLES YOUR ARGUMENTS AGAINST SAME LONG TIME AGO

hollars:

If you govern Lagos state for 8years and you can't own an airline, your parents will disown you out-rightly. besides you need to to be informed, Tinubu was rich before he became the governor, so tell me if you had his kinda wealth before his position would you not grow someday and own an airline? Thank God he's investing it in the country not in Netherland's aviation business.

hollars:

If you govern Lagos state for 8years and you can't own an airline, your parents will disown you out-rightly. besides you need to to be informed, Tinubu was rich before he became the governor, so tell me if you had his kinda wealth before his position would you not grow someday and own an airline? Thank God he's investing it in the country not in Netherland's aviation business.

Pukkah:

This is what I have been trying to say. The default risk of an airline in Nigeria is very high and this will affect the flow of funding for the business. Even when the promoters own their own equity and are not in need of borrowing, the question they will ask themselves is: what's the expected rate of return on this business? If this question is not asked, or the negative answer ignored, that means the business is being undertaken for reasons other than strict business analysis, e.g. pure ego or money laundering.

This is why I earlier wrote that I'm surprised that people are still going into aviation business in Nigeria while other sectors with higher return rates are available.

Gbawe:


Adeola is the founder of GT Bank. One would think, through the bank, he has gained vast knowledge and clout in the money Market. Would it then be difficult to raise this amount ? Similar for Ajimobi, although not banking derived.

hollars:

I dont believe this about Tinubu's profile

The brilliance of this young Nigerian showed in his ability to make the honours’ list of Richard Daley College. He subsequently transferred to the Chicago State University, Illinois, graduating with honours in 1979 and earning a Bachelor’s Degree in Business Administration (Accounting and Management). [size=16pt]During his first year in Chicago State University, young Bola was given the[b] rare privilege to partly teach other students of his Faculty remedial tutorial classes[/b]. Most of his colleagues and contemporaries at the university attributed their improved grades to his tutorial lectures.[/size]

Throughout his undergraduate years, young Bola was on the Dean’s List and was honoured with the Outstanding Student’s Award, the University Scholar’s Award and the Certificate of Merit in Accounting and Finance. [size=16pt]He was also awarded the prestigious Sumna cumlaude for scoring[b] 3.54 out of possible 4.0 GP.[/size][/b]

With his successful academic profile, [b]young Bola [/b]contested and won his first political election as the President of the Accounting Society of the institution in his final year at the University.

Upon graduation with honours and several awards, Bola Tinubu cut his professional teeth at the American-based Arthur Anderson,


this guy was brilliant in school so if he becomes the president today, i think he's got the brain. im not supporting him tho'. i never knew he's this intelligent, i use to see him as a rascal but i think he's got brains + rascality, this gives him an advantage over most of our politicians, i doubt if most of them didnt performed well in school. i know its not a yardstick for political office performance but it's an added advantage

Tales by moonlight . . .This Zobo fit cause constipation

mbulela:

I find your views on this thread very considered, enlightening and sensible.
I have always been of the opinion that those who entered the airline and newspaper (dailies) publishing business in the last 10 years have done so for the either or both of the twin purposes you alluded to above.
Like you said, Time will tell and i wish this airline the best.

However, BAT is undoubtedly an intelligent man and i assume there is something he sees that you and i do not see if it is not for one of the two reasons above.