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Buhari advised to merge airlines to form national carrier

01 July 2015, 21:37

Abuja - Nigeria should merge its debt-laden airlines and create a national carrier in partnership with a global airline to boost revenue and create jobs, a ruling party strategy report seen by Reuters on Wednesday shows.

Muhammadu Buhari, who was sworn in as president of Africa's top oil producer and biggest economy on May 29, is considering recommendations in the strategy document produced by a 19-member committee from his All Progressives Congress (APC) party.

The report may influence policy decisions by Buhari, who was elected on an anti-corruption ticket and has vowed to recover billions of dollars allegedly stolen by officials. He has, however, been criticised for not naming a cabinet yet and party officials say it may not happen until September.

Three years ago, Asset Management Corporation of Nigeria (AMCON), a state-backed "bad bank" established in 2009, took on more than 132 billion naira ($663 million) of debts from 12 Nigerian airlines including the biggest carrier, Arik, and Aero.

The APC strategy document says the aviation ministry should create a national airline "in partnership with a global airline", which would involve "merging all airlines currently with AMCON", to serve as a West and Central African hub.

Also read: Airline operators tasks Buhari on development of aviation sector

The report, submitted to Buhari about two weeks ago, says the proposals would lead to "increased revenue, reduce capital flight, expand the local aviation industry and create more employment opportunities due to the scale created".

British billionaire Richard Branson set up domestic and international carrier Virgin Nigeria in 2000, but pulled out in 2010 in frustration at what he said was interference by politicians and regulators.

The airline he created, which was later rebranded Air Nigeria, closed in 2012 after collapsing under about 35 billion naira of debt which left it unable to pay staff, a former finance director of the company told Reuters at the time.

The APC strategy report also proposes upgrading the airport in the capital Abuja by building a second runway, as a possible way to increase passenger numbers.

The report says airline operators should be required to have a minimum of five planes, rather than three now, and capital requirements should be increased to 2.5 billion naira for a domestic carrier and 5 billion for an international one.

- Reuters


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