Even before taking off, Nigeria Air, the country’s proposed national carrier, has encountered significant turbulence. Last week, a Federal High Court in Ikoyi, Lagos, issued an interim injunction preventing the Federal Government and its partners from proceeding with further actions on the airline. This legal setback occurred alongside reports of opposition from officials within the Ministry of Aviation to the management structure proposed by Ethiopian Airlines, the technical partner and majority stakeholder in the project. As the court’s decision is awaited, this situation provides an opportunity to critically evaluate Nigeria’s aviation sector and its ongoing attempts at revitalization.

The issues surrounding Nigeria Air highlight the lack of coherence and unity within the country’s aviation industry. Unlike in other nations where governments and the aviation industry collaborate closely, Nigeria seems to suffer from internal discord, as evidenced by the disputes over this project.

Domestic airlines, under the umbrella of the Airline Operators of Nigeria (AON), have voiced strong objections to the involvement of Ethiopian Airlines, which holds a 49 percent stake in the national carrier. The AON approached the court, seeking to cancel the deal and revoke the Air Transport License (ATL) granted to Nigeria Air by the Nigerian Civil Aviation Authority. They argue that the company selected as the Transaction Adviser was only incorporated in March 2021 and is allegedly linked to the Minister of Aviation, Hadi Sirika. Moreover, the AON claims that the ATL issued to Nigeria Air bypassed standard security checks.

The aviation sector is plagued by conflicting interests. While some local operators fear that Ethiopian Airlines’ entry could drive Nigerian carriers out of business, others disagree. Sirika, on the other hand, contends that the airline is a vital component of the government’s aviation roadmap and would generate employment. He insists that stakeholders were consulted “at every step” and is confident that the court will rule in favor of the government. Nevertheless, the sector needs urgent reforms, driven by visionary government leadership in collaboration with private capital. After the collapse of the state-owned Nigeria Airways, several private airlines that once flourished have also failed, leaving only a few domestic carriers operational today.

Despite the International Air Transport Association (IATA) estimating that Nigeria’s aviation industry contributes approximately $600 million to the country’s GDP and supports around 55,000 jobs, the industry remains far from realizing its full potential. For example, in South Africa, the air transport industry contributes $5.2 billion to GDP and supports over 472,000 jobs, including tourism and hospitality-related employment.

As consistently argued, transforming Nigeria’s aviation sector requires policies that liberalize the operating environment to attract investment. The government’s Aviation Sector Roadmap, which aims to boost GDP by $14.16 billion, has seen little progress due to slow reform efforts by Sirika and President Muhammadu Buhari (retired), particularly in terms of infrastructure development. The much-talked-about plan to concession four major international airports—Lagos, Abuja, Port Harcourt, and Kano—remains in limbo, despite frequent mentions during budget cycles. Instead, Buhari and Sirika are focused on the state-sponsored national carrier project, incorporated into the aviation roadmap. Sirika’s argument that Nigeria needs a national carrier to capitalize on its 80 Bilateral Air Service Agreements (BASAs) is sound. However, a government-backed airline is not the best approach. Countries with the largest aviation industries, such as the United States and Western Europe, do not rely on government-owned carriers. Many European countries have long since privatized their once state-owned airlines.

While having a national carrier is an appealing goal, Nigeria’s poor history with state-backed enterprises raises concerns among stakeholders. Past attempts to establish a national carrier failed, with major international airlines like Virgin Atlantic and KLM avoiding partnerships with Nigerian entities due to issues with contract breaches, policy changes, corruption, and bureaucratic inefficiency.

As a growing economy with a large population and significant resources, Nigeria could better stimulate its aviation sector by liberalizing the industry and encouraging both domestic and foreign investment. The government should focus on creating an enabling environment for private airlines to flourish, rather than funneling public funds into a state-run airline. Experience worldwide shows that fostering competition among private carriers is more effective than relying on government-owned enterprises. The government’s role should be limited to establishing a competitive landscape for private sector growth.

While it is true that some world-class airlines, like Ethiopian Airlines, are state-owned, Nigeria’s poor track record in managing public enterprises is concerning. The absence of a national carrier is a symptom of the deeper issues in the aviation sector, rather than the root cause. Although the Federal Government holds only a five percent stake in Nigeria Air, the controversy that often accompanies government transactions is already clouding the project.

The government should focus on addressing the real problems facing the industry. A key issue is the chronic underinvestment in infrastructure. Privatization and liberalization would attract much-needed investment in airports and the broader hospitality sector. A priority should also be establishing large domestic hangars for aircraft maintenance, as Nigeria currently loses N1.04 trillion annually to the overseas servicing of Nigerian-registered aircraft, according to the Federal Airports Authority of Nigeria.

In addition to addressing underinvestment, effective regulation and the provision of advanced navigation equipment should be a top priority for Sirika. The government must also tackle the aviation fuel crisis that has contributed to the collapse of over 70 domestic airlines in recent years. Supporting the revival of existing airlines and the emergence of new ones through fiscal incentives and modern technology is a more sustainable path forward. For example, Ireland has become a major hub for international aviation, with over 50 percent of leased airplanes worldwide connected to the country, according to the consultancy Cogency Global. Similarly, Britain successfully privatized its state-owned airline, British Airways, which is now owned by an Anglo-Spanish consortium, and has also privatized its airports.

Once the legal battles over Nigeria Air are resolved, Buhari and Sirika should expedite the airport concession plans, liberalize the aviation industry to attract investments, and support the growth of resilient Nigerian airlines. Governments should avoid involvement in commercial enterprises and focus on creating a regulatory framework that supports economic growth.