Critics Condemn N75 billion wasted on Nigerian Eagle Airline


Over N75 billion has been allegedly splashed on the proposed national carrier known as Nigerian Eagle. Information available to ENCOMIUM Weekly revealed Nigeria’s federal government is set to turn heavily indebted Aero Contractors Airlines into the country’s national carrier. Insiders squealed that Nigeria’s oldest commercial airline will now be called the Nigerian Eagle and will be launched soon by President Goodluck Jonathan.

Sources said the government has also bought ten new Embraer planes to flag off the new national carrier. The 10 Embraer aircraft will be added to the planes already in the fleet of Aero Contractors. Investigation by ENCOMIUM Weekly reveled that a 122 passenger Embraer plane used for commercial purpose cost $47million. That’s approximately N7.5 billion per unit. Thus, 10 of them total N75 billion.

ENCOMIUM Weekly‘s checks revealed that one of Aero Contractors‘ planes with registration number 5N BLC has already been painted into Nigeria’s national colours of green and white. The aircraft, a Boeing 737-500 classic, painted with new livery and the new name, landed in Lagos at about 8:45 pm on Tuesday, November, 26, 2013, and was secretly parked in a private Fixed Based Operation (FBO) facility at the Murtala Muhammed International Airport, Lagos.  The plane now resembles the aircraft once used by Nigeria Airways, the mismanaged government airline that crumbled years ago.

Stakeholders have criticized the move, saying that Aero Contractors was so badly indebted that the Assets Management Corporation of Nigeria (AMCON) took it over last year, when the airline couldn’t pay its debts.

They said with the takeover, billions of naira borrowed from Nigerian coffers have been erased and nobody has been held accountable for the big losses.

Besides, critics argue that national airlines are no longer viable in the world as they are often being mismanaged or abused. The new national carrier to be launched by President Goodluck Jonathan will be a privileged airline that will receive waivers for virtually everything, the source said.

“Arik Air will just die because it won’t be able to compete. The Nigerian Eagle will operate from the General Aviation Terminal in Lagos,” the source said.

Aero Contractors was formed in 1959 and officially registered in Nigeria in 1960. At that time, it was wholly owned by Schreiner Airways B.V. of the Netherlands.

It became a company with initially 40 percent Nigerian holding in 1973 and subsequently 60 percent in 1976, anticipating the requirements of the Nigerian Enterprises Promotion Decree of 1977, also known as the indigenization decree. In January 2004, Schreiner Airways was bought by CHC Helicopter (CHC), which acquired a 40 percent holding in Aero, while the 60 percent majority share remained within the Ibru family.

On July 1, 2010, CHC sold its interests in Aero for the consideration of N1, when Aero became wholly owned by the Ibru family.

In March 2013, industrial action grounded flights for 18 days, in a dispute over outsourcing and reduction in staff. The strike, from March 13-28, grounded Aero’s active fleet of nine aircraft, and was reported to have cost the airline at least N10bn in ticket sales.

After financial intervention, the Asset Management Corporation of Nigeria (AMCON), an arm of the Federal Government of Nigeria, held 60 percent of Aero, and in August 2013, it was reported that AMCON had taken over the management of the carrier. Hugh Fraser was named the new CEO.

In August, there was also press speculation that the Federal Government will use Aero Contractors as the nucleus of a new national carrier, to be known as Nigerian Eagle, several years after the liquidation of the defunct flag carrier Nigeria Airways. The government is said to be making efforts to inject about N200 billion through an initial public offering (IPO), with the new airline scheduled to commence full operations before the end of the year (2013). Its fleet size is 16 and operates 14 destinations.

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