Cablegate: Future of Nigeria Airways

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 LAGOS 001870

SIPDIS

E.O. 12958: N/A
TAGS: EAIR ECON NI
SUBJECT: FUTURE OF NIGERIA AIRWAYS

1. (SBU) Summary: The wetlease agreement of Nigeria Airways
Limited (NAL) with
Air Atlanta Icelandic (AAI) was set to expire on September
19, but was extended
at the last minute. The Ministry of Aviation had hoped until
the last moment to
replace NAL with a new national carrier, Air Nigeria, through
a joint venture
agreement with the UK-based Airwing Aerospace Limited (AAL).
Because Nigeria
lacks ICAO's Category I safety status, however, NAL would not
have been able to
fly alone into the United States. In addition, Air Nigeria
could not have begun
operations on September 20 because the U.S. Federal Aviation
Administration has
not received documentation from the new airline. Moreover,
an inter-ministerial
committee formed to advise the GON on the legitimacy of the
proposed joint venture
has yet to begin deliberations. Had NAL failed to extend its
current wetlease by
September 20, operations on the popular Lagos-New York route
would have been suspended.
The Ministry of Aviation has dodged that bullet, but still
has a politically difficult
row to hoe before Air Nigeria can lift off. End Summary.

2. (U) On September 17, Abuja-based ECON FSN Specialist met
with Tony Anufor, Special
Assistant to the Minister of Aviation, who asserted knowing
nothing about plans
to extend NAL's wetlease. Anufor confirmed, however, that
preparations for the new
carrier have been put on hold pending the recommendation of
the inter-ministerial
committee that will review the proposed joint venture.
Initially, the Ministry had hoped
that Air Nigeria might have begun operating on September 20
under the joint venture
agreement. Under it, the GON's equity share would have been
51 percent, secured
through the liquidation of NAL assets. Officials from the
Nigerian Civil Aviation
Authority (NCAA) informed EconOff that Airwing had planned on
Singapore Airways' managing
the operations.

3. (U) Early September 18, Chris Aligbe, Public Affairs
Manager for NAL, informed
Lagos-based EconOff that NAL intended to continue its
Lagos-New York operations
through an extension of NAL's actual wetlease. NAL's
Managing Director hoped to
secure a deal with AAI within two days. Aligbe expected the
extension would be
in effect until Air Nigeria receives GON approval of the
joint venture and acquires
FAA-approved equipment and crew. Late September 18, Aligbe
informed EconOff that
Nigeria Airways had just extended its wetlease agreement with
Air Atlanta, presumably
until the issue about Air Nigeria is resolved.

4. (SBU) The future of the Air Nigeria deal remains
uncertain. After hearing of complaints by the Bureau of
Public Enterprises, President Obasanjo established
a twelve-person committee to review the agreement. Members
of the committee include
representatives from the Ministries of Justice, Finance,
Aviation, and the Bureau of
Public Enterprises (BPE). The BPE argues that the Ministry
is challenging the
BPE's privatization authority. Contacts report that the BPE
is engaged in discussions
to sell NAL to a South African group. This issue will most
likely be reviewed by the
committee, whose deliberations were to have begun on
September 16, but were delayed
until September 20 owing to the ongoing voter registration.
Denying press reports that
the committee is investigating the Ministry of Aviation's
actions in the deal, the
Minister's Special Assistant characterized the accusations as
"evil schemes of people
who do not like (Minister Chikwe)."

5. (SBU) Comment: Even if President Obasanjo has signed off
on the joint venture agreement, as
Minister Chikwe contends in the press, Air Nigeria's future
is uncertain. The inter-
ministerial committee must review the agreement to ensure
that it meets governmental
guidelines, and the BPE is likely to recommend against
approval. End Comment.
HINSON-JONES

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