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Nigeria eyes 2022 for national carrier start date
The Nigerian Government says its national carrier, Nigeria Air, will commence flight operations by April 2022. Stating that by that date, it expects the new official airline to have 51 per cent of its equity shares owned by the Nigerian government and people, with foreign partners having the remaining 49 per cent. How realistic is this target? Johnson Chukwu, CEO of Cowry Asset Management, joins CNBC Africa for more.
Thu, 25 Nov 2021 11:55:51 GMT
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AI Generated Summary
- The challenges of government involvement in the airline industry
- The importance of technically competent private sector investors for success
- Attractiveness of Nigeria's aviation market for foreign investors
The Nigerian government recently announced that its national carrier, Nigeria Air, will commence flight operations in April 2022. The government aims for the airline to have 51 percent of its equity shares owned by the Nigerian government and people, with foreign partners holding the remaining 49 percent. The CEO of Cowry Asset Management, Johnson Chukwu, shared his insights on the feasibility of this target during an interview with CNBC Africa. Chukwu expressed concerns about government involvement in the airline industry, citing challenges faced by other African countries with national carriers. He highlighted the importance of having technically competent private sector investors in the majority ownership to ensure success. Chukwu emphasized the need for commercial viability in addition to national pride, noting that previous experiences have shown government limitations in managing complex businesses like airlines effectively. Despite the on-again, off-again nature of the Nigeria Air deal since 2018, Chukwu believes that attracting foreign investors for the 49 percent stake should not be difficult. With Nigeria being a significant market for international airlines and showing growth potential in both domestic and international passenger traffic, the investment opportunity is appealing. Chukwu mentioned the high demand for air travel in Nigeria, especially amid economic recovery, making the aviation industry lucrative for foreign investors. He highlighted the benefits of having non-governmental dominant shareholders in the national carrier, ensuring a strong commercial focus and alignment of business interests. Overall, Chukwu remains cautiously optimistic about the prospects of Nigeria Air taking flight in 2022, stressing the importance of a sound business model and private sector leadership in its success.
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