kmariko:
Here's the complete quote from the Africanews link the op presented

" initial capital is likely to be in the range of $US 150 to 300 million, invested in tranches over time from start up through the first years of operation,” a government document stated.

It said the government will provide initial capital but did not state the sum or give further details.

The government will “facilitate the process for opening up the capital of the airline to private sector financial investors”, the document stated.

No where was it stated that the 5% was for the initial start up cost.

Secondly, it clearly stated that the government will provide the initial capital.

Third, the estimation left rooms for cost over runs as there was no clear time frame when the government will stop the funding..

Fact remains that the proposal is still murky and lacks transparency.

Chile obi might be right in his initial assessment until the government proves otherwise.

PassingShot:
Why didn't you use $55?
SMH for some of you guys.

Iamgrey5:

First of all, Nigeria has more air travelers than Kenya or Ethiopia. Yet, both of these countries have successful carriers, and frankly most of their carriers rely a lot on the customers they get from Nigeria

Secondly, if you have looked up air travel options on any booking agency of recent, particularly to African and middle eastern destinations, you will realize that majority of the flights leaving Nigeria are dominated by African carriers that also employ nearly 90% of the workforce from their own home countries. Thus, a national air carrier should create a lot of employment opportunities for Nigerians.


Thirdly, it will generate a lot of revenue for the government on the long run, directly (as share holders) or indirectly (through taxes)

Phagyrhe:


I totally understand your point bro, however, let's not forget that private airlines flourish even in countries where there is a national carrier too.

Thankfully, you admit that Ethiopian Airways is the only government owned airline making profit in Africa, and not just some profit, huge profits. And the fact that Kenya Airways made six months profit says it all. The fact that Ethiopian Airline can do it should also motivate and drive us towards having a successful national carrier too.

new2012:
With a complicated project plan, dead airports, messed up custom officers, I think the Airline just died.


An average lifespan for airlines in Nigeria is 10years, this one need grace to do 5!


A project plan that requires beer parlour explanations by party asslickers and sycophants..


How can you have 5% stake and control the business? Negotiate for airplanes and set up? OK, what do I know?

AZeD1:

There's Arik and Aero which is currently owned by the government.
Before you run, you need to learn to crawl, there are lots of issues wrong with the Nigerian aviation sector and a national carrier isn't one of them. Apart from Ethiopian Airways, the majority of other airlines are loss making machines.

What will the new airline provide that Arik, Aero and Air Peace can't provide?

kmariko:


Here's the complete quote from the Africanews link the op presented

" initial capital is likely to be in the range of $US 150 to 300 million, invested in tranches over time from start up through the first years of operation,” a government document stated.

It said the government will provide initial capital but did not state the sum or give further details.


The government will “facilitate the process for opening up the capital of the airline to private sector financial investors”, the document stated.

No where was it stated that the 5% was for the initial start up cost.

Secondly, it clearly stated that the government will provide the initial capital.

Third, the estimation left rooms for cost over runs as there was no clear time frame when the government will stop the funding..

Fact remains that the proposal is still murky and lacks transparency.

Chile obi might be right in his initial assessment until the government proves otherwise.

Iamgrey5:
i don't think the government intends to use them for local routes.

So I believe they are focusing on international routes to compete with other African carries reaping off Nigerian customers.

I believe we have more travelers than those African carriers. I also believe management problems are one the main issues bothering those other national carriers, hence the Nigerian government will be transferring majority of the management of the new national carrier into private hands.

AZeD1:

Aero and Arik is currently owned by the government, if the government was serious about creating an airline, the simple thing to do is merge the two, rebrand and sell equity. That way, you already have a functioning airline from day one with planes and the likes, all the new investors need to do is improve.

Phagyrhe:


Permit me to disagree with you on this. Rwand, Kenya, Qatar, Emirates and Ethiopian Airways get huge chunk of their revenue through international routes. There are two major airports in United Arab Emirates, one in Kenya, Rwanda, Namibia, Qatar and Ethiopia.

Between, Lagos and Abuja routes are among the busiest in Africa

Iamgrey5:
What difference does it make sir? they still have to acquire new fleets for international destinations anyways!

And what makes you think they don't intend to merge both airlines together to create a local section of the national carrier ?

PassingShot:

For argument sake, if we even agree that the FG will provide the entire initial capital of $300m, does that translate to 5% of initial required capital? Would that not be 100% of the initial capital?

Is there any remote reason to suggest that the $300m needed at start up is 5% of required initial capital? So, where does the pained man get his $300m being 5% of initial capital from?


Gosh!

AZeD1:

They don't have to acquire new fleet, Arik used to fly to New York
By the way, they would have done this without spending a dime aside from what AMCON spent, and the airline would be already operational.

AZeD1:
Aero and Arik is currently owned by the government, if the government was serious about creating an airline, the simple thing to do is merge the two, rebrand and sell equity. That way, you already have a functioning airline from day one with planes and the likes, all the new investors need to do is improve.

kmariko:


That's why I asserted that the details are very murky.

Nobody knows what the overall start up cost will be...estimates are what they are.. estimates

The government only informed us about how much they will invest to get the deal rolling NOT how much the overall start up cost will be. it is difficult to estimate because of the ever changing business environment.

The deal would have in my opinion be made more transparent if the government has come out with a definitive list of investors and how much they are asking and willing to contribute..there's no need for the secrecy.

Once again the onus is on the government to prove Chike obi wrong.. his argument is based solely on the scant details provided by the government

LaudableXX:

Aero and Arik is NOT owned by govt. Government did not buy any of their shares, neither did it invalidate the existing ownership structure of those airlines. The govt agency AMCON is merely managing them, in order to turn their operations around and ensure their creditors get paid. How much shares does federal govt own in both airlines? Nothing! Once their debts are sorted, the owners will take over daily management of their airlines' operations again.

AZeD1:
https://www.google.ca/amp/s/www.thisdaylive.com/index.php/2018/06/07/amcon-plans-sale-of-arik-aero-pan-others-in-2018/amp/

AMCON Plans Sale of Arik, Aero, PAN, Others in 2018
For that reason, he said, AMCON was determined to pursue every obligor in its book with all the powers the laws avail AMCON to deal with each and every one of them especially the 350 debtors of AMCON who account for almost 80 per cent of the over N5 trillion huge debt burden, which must be recovered because AMCON borrowed to purchase the Eligible Bank Assets (EBAs) during the first and second phases when it bought over the bad loans from the banks.

He continued: “Like I said earlier, we will deal with some of those key assets very soon like the Peugeot Nigeria Limited in Kaduna, CDL, Aero Contractors, Arik Air and a host of others. But I must tell you, as we close in on these individuals and entities that owe us, I want you to know that they will call us names, they will blackmail us, they will threaten us, malign and harass us. https://www.thisdaylive.com/index.php/2018/06/07/amcon-plans-sale-of-arik-aero-pan-others-in-2018/

LaudableXX:


Oga did you actually read the article, before posting it? The assets that AMCON owns are the loans that those companies incurred. By virtue of its enabling laws, AMCON cannot just buy shares in a company - it buys up bad loans on behalf of banks and creditors, then tries to turn such companies around, to ensure the creditors get paid.

Please read the main crux of the article you quoted:

AZeD1:
It tries to turn companies around or sell the companies.

kmariko:
That's why I asserted that the details are very murky.

Nobody knows what the overall start up cost will be...estimates are what they are.. estimates

The government only informed us about how much they will invest to get the deal rolling NOT how much the overall start up cost will be. it is difficult to estimate because of the ever changing business environment.

The deal would have in my opinion be made more transparent if the government has come out with a definitive list of investors and how much they are asking and willing to contribute..there's no need for the secrecy.

Once again the onus is on the government to prove Chike obi wrong.. his argument is based solely on the scant details provided by the government

caprini1:
You've said it all...an industry where Richard Branson couldn't survive,we simply are not ready for this ,no need to waste the money.

LaudableXX:

They sell the companies' debt. How many companies has AMCON sold so far?

PrecisionFx:



U have to first fly local before international Oga, No de even call all those airlines,Do u know how many billion dollars they are worth? Do u know how many billion dollars they have invested? ?? U wan use 300 million dollars begin fly their routes



We dont have electricity, our borders are 100% porous, We don't have access to clean water, we have multiple terrorist groups within Nigeria killing people everyday, we have terrible road network, I don't even want to talk about our education sector and u and APC are here trying to build an airline without plane or website or recruiting staff members n no investment in aviation technology. Abeg ...

Phagyrhe:


Lol.... Take it easy bro.

I don't belong to APC but the Nigerian state. Every country has its own challenges and the fact that we face these problems does not mean we have to remain static as a country. We are expected to face our problems at all fronts.

While we tackle the problems you mentioned above, we also need to find a way to create new opportunities and I believe Nigerian Airways is not a bad idea, IMO.

The 300 millions dollars you mentioned is the start up capital which will include counterpart funds from would be investor and the government. It was stated clearly before the event in London that the launch was to lure investors. Why not give them the benefit of doubt on this? Multinationals don't just spring up to be, they start from somewhere. This airline is starting like a small enterprise, there is a clear cut path which is well laid out in its document which is publicly available for you to read and digest.

Take your time to read about the Ethiopian Airline and tell me its similarities with the newly conceived Nigerian Airways.

https://www.ethiopianairlines.com/corporate/company/about-us/history

Cheers!

Iamgrey5:

at emboldened


Yet majority of carriers in Africa continue to troop into the Nigerian market everyday e.g. Namibia airways of recent just entered the Nigerian market.


5% stake doesn't mean they shouldn't initiate the project, it simply means they eventually hope to sell majority sake to investors or own less than 5% of shares on a long run.

In addition, if you read through your own submissions on the topic, you will realize that maintaining a low percent in the venture will be the best option to take because of low maintenance culture of the Nigerian government as you have rightly pointed out in the 10years life span of most national air carriers.

So how is their business sense wacky?

BigIyanga:
Naija is not an aviation hub in Africa. Aviation infrastructure is lacking. Gulf and EU airlines have secured market share as a result of first user advantage, technical and operational competence.
In 2017, only 30 airlines carried 3.5m passengers on intl routes from Naija. That’s about 116k per airline in a year.

https://www.google.com/amp/s/www.dailytrust.com.ng/amplite/nigeria-air-passenger-traffic-drops-26-in-2017.html

Kenya Airways flew ..4.5m passengers in 2017 while the entire intl flying population in Naija in 2017 was 3.5m.

http://www.anna.aero/2018/01/12/kenya-airways-traffic-grows-71-10-years-4-46-million-passengers/

Intl travel is not like GSM or Heineken/Coca Cola where almost every Nigerian can afford it

BigIyanga:

Naija is not an aviation hub in Africa. Aviation infrastructure is lacking. Gulf and EU airlines have secured market share as a result of first user advantage, technical and operational competence
In 2017, only 30 airlines carried 3.5m passengers on intl routes from Naija. That’s about 116k per airline in a year.

https://www.google.com/amp/s/www.dailytrust.com.ng/amplite/nigeria-air-passenger-traffic-drops-26-in-2017.html

Kenya Airways flew ..4.5m passengers in 2017 while the entire intl flying population in Naija in 2017 was 3.5m.

http://www.anna.aero/2018/01/12/kenya-airways-traffic-grows-71-10-years-4-46-million-passengers/

Intl travel is not like GSM or Heineken/Coca Cola where almost every Nigerian can afford it

sholatech:
Still ambiguous. No where in your link did they specify amount of Government investment so we can't imply it's just 5 percent of the $300m..

One of your link even stated the $300m as the Start up cost....not the total equity required for the airline investment.

Iamgrey5:
@ red

I don't understand what you mean by aviation hub? and how the infrastructure available in the Nigerian aviation industry has anything to do with traffic(customers ) which what is mostly needed for the survival of any carrier in the world.

In the article below, Nigeria is ranked to have the fifth busiest airport in Africa. The countries with the four busiest before it all have National carriers, even countries way down on the list.


https://answersafrica.com/list-of-busiest-airports-in-africa.html


@ emboldened

You also forgot that Nigeria is a price sensitive market and the only reason other major African carriers are able to penetrate the Nigerian market is basically their affordability when compared to the European and Asian carriers.

PrecisionFx:



"" we have to remain static ""



We will remain static without electricity.