Picture: ISTOCK
Picture: ISTOCK

Lagos — Nigeria’s new national airline will require initial capital of $150m-$300m and the government is seeking a strategic partner to operate the carrier, the government stated in a document seen by Reuters.

The country’s previous national carrier, Nigeria Airways, was wholly owned by the government. It ceased to operate in 2003.

Minister of State for Aviation Hadi Sirika, said on Wednesday the government would not own more than 5% of the new carrier, called Nigeria Air. He made the comments while providing details of the airline at the Farnborough Airshow in England.

The government plans to launch the airline in December, making good on President Muhammadu Buhari’s election campaign promise.

Neglect and lack of investment have left Nigeria with low-quality infrastructure seen as a hurdle to prosperity.

The government has said upgrading it will require private investment.

"The initial capital is likely to be in the range of $150[m] to $300m, invested in tranches over time from startup through the first years of operation," a government document reads.

The government will provide initial capital, it reads, but does not state the sum. The government will "facilitate the process for opening up the capital of the airline to private sector financial investors", the document reads.

A private operator, sought through a public-private partnership process, will manage the airline without interference, it reads.

Nigeria Air would serve domestic and international markets and expect to have a fleet of 30 aircraft in five years with hubs in Lagos and Abuja, Nigeria’s two main cities.

Richard Branson

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 35bn naira ($97.4m) in debt that left it unable to pay staff, a former finance director of the company said at the time.

Nigeria is overhauling its aviation infrastructure and handing over its airports to private managers to improve the business environment for the industry sector to attract investment, the document reads.

Current air traffic in Nigeria is about 15-million passengers, which is expected to grow at 5% a year through to 2036, it reads.

Reuters