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Cablegate: Nigeria: Meeting with Minister of Aviation-

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

UNCLAS ABUJA 002509

SIPDIS


E.O. 12958: N/A
TAGS: ECON EAIR PREL PGOV NI
SUBJECT: NIGERIA: MEETING WITH MINISTER OF AVIATION-
NORTHWEST CODESHARING APPROVED; NIGERIAN AIRWAYS SET TO
TAKE OFF

1. (U) This is an action cable. See paragraph 9.


2. (U) On August 15 Ambassador Jeter met Minister of
Aviation, Kema Chikwe to discuss the status of code sharing
requests by Northwest, Delta and American Airlines with
their European partners. The Minister assured the
Ambassador that Northwest would be approved as a code-
sharer with KLM, which began flights out of Abuja on August
15.


3. (U) However, she said that American and Delta could not
be certified because they have not submitted paperwork
through the proper channels. Minister Chikwe stated that
she had not been informed that Delta and American were
designated under the U.S.-Nigerian Air Transport Agreement,
though they were listed in the same Diplomatic Note as
Northwest. In addition to the Diplomatic Note sent by the
Embassy, she stressed that American and Delta must write
directly to her requesting code-sharing approval. (See
paragraph 9 for action request)


4. (U) Minister Chikwe said while code-sharing is fine, she
preferred that U.S. carriers fly directly to Nigeria and
not under the code-sharing wing of European partners. The
Ambassador mentioned that previously he had encouraged a
delegation from the Ministry to visit the U.S. to discuss
with American carriers of the profitability of flying
direct to Nigeria. Before they invest, American carriers
must also be convinced of airport security and safety, he
emphasized.


5. (U) The Minister countered by revealing Nigerian
Airways' plans to dominate the Nigeria- U.S. route. To be
more competitive, Nigerian Airways is vastly upgrading its
fleet, acquiring nine new aircraft- two Boeing 747s and
seven 767s. In addition, the Minister said Nigerian Airways
is undergoing major organizational restructuring. Nigeria
Airways is doing better but not as well as she would like,
crediting its slower than hoped progress and continued
mismanagement. She cited the lack of cultural diversity and
importation of new ideas as the primary impediment to the
airline's development. The Minister revealed her plans to
hire an experienced international staff to manage the
airlines. Anticipating opposition to this effort to hire
managers of other nationalities, she said some Nigerians
might resent this effort because they fear competition.


4. (U) While Minister Chikwe wants to diversify staff, she
opposed privatizing Nigeria Airways. She said, Nigeria's
efforts to privatize have been a dismal failure.
Privatization should be sequential, Ministry by Ministry
and not all at once. Rapid privatization is a recipe for
disaster and leads to inevitable conflicts with the
Ministers, she continued. The Minister said all of BPE's
privatization efforts have failed, citing Nitel and
NigerDock as prime examples. The Bureau of Privatization
contemplated privatizing Nigeria Airways, despite the
Minister's opposition but desisted when the Vice President
intervened.


5. (SBU) Comment: Although perhaps overly bureaucratic in
her position that U.S. carriers must write a letter
addressed directly to her, she did not seem to oppose code
sharing for our air carriers. The Minister also clearly
acknowledged the need for major improvements to the
operations of Nigerian Airways, which requires capital and
industry knowledge. At the same time, she adamantly opposed
its privatization. Subsequent to the meeting, newspapers
began reporting that the Aviation Ministry intended to sell
49 percent equity share of Nigerian Air to a United Kingdom
based leasing company, Airwing. This plan would seem to
fit Chikwe's desire for the GON to maintain the controlling
interest in the Airline yet still inject needed capital and
know-how into its operation. However, according to some
reports, Airwing has no experience in airline operations,
except in aircraft sales and leasing. If so, the approach
might not repair the airliner's management problem.
Additionally, questions have been raised about the legality
of this plan as it is not under the auspices of BPE's
formal privatization procedure.


9. (U) Action Requested: The Department is requested to
inform Delta and American Airlines that they must submit a
letter addressed to the Minister of Aviation requesting
code-sharing approval.


JETER

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