Amid longstanding systemic challenges, the question of how to elevate the Nigerian aviation industry remains hotly debated. At the 29th Annual LAAC Conference, three heavyweight voices clashed, converged, and challenged the vicious circle. ANTHONY OMOH explores their views.
Setting the ball rolling, Chris Aligbe, urged strong domestic airlines and a national carrier as the foundation for Nigeria to break free from the ‘vicious circle.’
Dr. Allen Onyema countered with sharp criticism of government-run airlines, focusing instead on infrastructure and regulatory reforms as the real linchpins. International airline body on airport infrastructure
Between them, Dr. Thomas Ogungbangbe, offered a pragmatic blend: a government equity stake in a private airline, complemented by urgent airport upgrades. Read on Nigeria Air
This three-way debate encapsulates the tension gripping Nigeria’s aviation sector with echoes for policy makers, investors, and travelers alike.
Airlines at the Core of the Vicious Circle
Managing Director, Belujane Konsult, Chris Aligbe
Addressing the audience, Aligbe painted a stark picture of interlinked struggles across the aviation ecosystem.
“Every sub-sector is closely linked with each other and so for us today, we are in a vicious circle,” he said, referring to airlines, airports, ground handling, and other players.
Aligbe stressed the airline industry’s primacy: “You cannot have airports. Thank God we are modernizing our airports, if flights are not going there, the airports will deteriorate and that is what is happening in our country.”
His key argument: without buoyant airlines, no airport can thrive, let alone become a hub. “No foreign airline can build a hub in your country,” he warned. “Those hubs are built by the airlines of their country.”
To him, Nigeria’s solution lies in merging domestic airlines into formidable entities, ideally three strong carriers, and supporting a national flag carrier.
“The breaking point is the airlines,” he insisted. Yet he was candid about the constraints, citing the economic downturn and passenger declines.
Highlighting a crucial government role, Aligbe called for a dedicated forex window to enable airlines to pay for leases, maintenance, and spares: “It should be an intentional thing. It must be deliberate.”
He dismissed the idea of an aviation bank due to the industry’s current fragility and stressed that “unless the airlines come to the point that they have to pull together,” the future remains bleak.
Aligbe urged introspection and alliance-building, citing global examples where economies of scale and partnerships dominate.
Additionally, Aligbe referenced AWA Airlines as an example of how Nigerian carriers could benefit from strategic alliances and partnerships.
He noted that many successful airlines globally grow by forming alliances with other airlines to expand their markets and achieve economies of scale.
“I look at AWA, AWA has about 12 formidable partners, alliance partners, world-class airlines. Look at TAAG Angola, just look at them. When they have these, they are expanding their markets, economies of scale,” Aligbe said.
He implied that Nigerian airlines should pursue such partnerships more aggressively to build stronger market presence and operational viability, rather than competing in isolation.
This alliance strategy, he argued, is crucial for breaking the vicious circle of underperformance in Nigeria’s aviation sector.
“We have talked about this over decades. We have been talking about airlines.Come, merge, form alliances, do this to expand the scale. They have not done it… If they continue the way they are, the future is bleak.”
This, he concluded, is the “vicious circle” that must be broken with the airlines taking the lead.
Infrastructure Bottlenecks Feed the Vicious Circle
Chairman, Air Peace, Dr. Allen Onyema
Onyema launched a robust rebuttal, sharply criticizing any overt or covert push for a government funded national carrier as a ‘moribund idea.’ “The government has no business doing business. It will fail like a pack of cards,” he stated bluntly.
Rejecting the national carrier model outright, Onyema instead championed private sector strength and called for appreciation of existing Nigerian carriers: “Air Peace is far bigger than some national carriers in Africa. Far bigger.”
Acknowledging the challenges Nigerian airlines face, Onyema called attention to crippling taxation, especially the 5% NCAA ticket surcharge, which he argued stifles the sector’s ability to price competitively.
He also talked about the new tax reforms saying, “If it is ever implemented from January next year, airlines would die within 48 hours.”
He also lamented the high cost of importing aircraft and parts, with customs duties and VAT squeezing margins. “The airline would die within 48 hours.”
These are some challenges he says led to the vicious circle path keeping the industry in an endless loop.
Turning to Aligbe’s earlier praise of AWA, Onyema emphasized that Nigerian airlines often don’t get enough credit for their achievements.
He highlighted Air Peace’s growing partnerships with Emirates and Air Arabia, and its expansion to nine African countries and beyond. “We are always seeing the good in others, we are not seeing the good in us.”
On the much-touted “hub” status, Onyema underscored infrastructure bottlenecks: “You need the airport infrastructure to be able to have a hub… The Lagos airport has no transit facility.”
He described the absurdity of transit passengers forced to pay visa fees and clear multiple immigration points, “Tell me if that person will fly your airline again to anywhere in the world?”
Onyema praised the current federal government and Minister of Aviation for finally pushing upgrades to Lagos airport and recognized the strategic importance of Nigeria’s location in Africa.
“This present regime is doing a lot they want to help the airlines.”
He noted Nigeria’s challenging insurance premiums due to “country risk,” comparing it unfavorably with other countries, and warned that without removing these systemic burdens, Nigerian airlines cannot thrive.
A Middle Ground Approach for the Vicious Circle
Group Managing Director, CITA Energies, Dr. Thomas Ogungbangbe
Dr. Ogungbangbe struck a measured tone, agreeing with some points from both sides while adding his own solutions.
Opening with a macroeconomic perspective, he said: “If you want to check the economic indices of any country, you can know it from the performance of the airline in that country because there is a nexus between air traffic and economic performance.”
He stressed the capital-intensive nature of aviation and the difficulties of operating in Nigeria’s harsh financial environment.
“Apart from the airline business, there is no business that can survive with the kind of interest rate in Nigeria… hovering maybe at 30 per cent.”
Ogungbangbe praised Air Peace for surpassing the average airline lifespan in Nigeria, noting “I was one of the happiest persons when Air Peace turned 10… that is not an easy job.”
He further cautioned about the harsh operating environment: “Competition, ambiguity coming from everywhere, mobile regulation, suspicion for what you didn’t do… it is extremely very strenuous.”
Like Aligbe, Ogungbangbe urged collaboration among airlines to attract foreign financing collectively. “Take the local airlines together to see how they can collectively attract financing from foreign countries like in the first and second world.”
Recognizing the limits of current Nigerian aviation capacity, he urged the government to “stand in for additional collateral for them to be able to assess those fundings at some very minimal interest rate.”
Ogungbangbe also touched on the concept of government equity in a private airline, proposing that “If the government of Nigeria can take 20% of Air Peace and make it a national carrier, that will be fantastic.”
He was optimistic about the current administration’s commitment to revamping Lagos’ MMIA, calling it “a major thing that can make Nigeria a hub.”
He urged Nigerian carriers to be ready to leverage improved infrastructure to drive profitability and reduce dependence on government handouts.
The Heart of the Debate: Airlines or Infrastructure?
The passionate debate between Aligbe and Onyema revolves around a critical question: what is the true bottleneck to Nigerian aviation’s growth — weak airlines or poor infrastructure?
Aligbe’s argument is that without strong homegrown airlines, Nigeria cannot build hubs or develop airports sustainably.
His call for mergers, alliances, and a national carrier echoes the strategies he perceives that have made aviation giants worldwide.
Onyema sharply disagrees. He asserts that airlines are only as strong as the infrastructure and operating environment around them.
Without transit lounges, streamlined immigration, favorable tax regimes, and affordable insurance, Nigerian carriers face an uphill battle.
His critique of government-run airlines is rooted in decades of global evidence showing that privatized, commercially viable airlines outperform state-run entities.
Ogungbangbe’s middle ground government equity participation in a private airline, combines Aligbe’s desire for a national champion with Onyema’s emphasis on the private sector’s agility.
His backing of the federal government’s ongoing airport upgrades highlights the complementary role infrastructure plays alongside airline strength.
What the Future Holds
The aviation ecosystem is interconnected, and breaking the vicious circle requires multi-pronged solutions.
Government Role: Aligbe, Onyema and Ogungbangbe emphasize deliberate government support through forex windows and equity participation, while Onyema warns against direct government management.
This way there would be capital to invest in the indstry and halt said vicious circle.
Airline Collaboration: Aligbe and Ogungbangbe call for mergers and alliances to achieve economies of scale.
Onyema highlights existing informal alliances like the spring alliance as a foundation to build upon. That he says takes care of the capacity part of the vicious circle.
Infrastructure Investment: Onyema and Ogungbangbe applaud the Tinubu administration’s commitment to airport modernization, particularly MMIA, as critical to realizing hubs.
Once complete, the vicious circle of inability to bring passengers to Nigeria and distubute to oter countries will be solved.
Regulatory and Tax Reform: Onyema’s spotlight on punitive taxation and opaque regulations is a clarion call for policy reform to create a fair playing field.
