Aviation Industry Faces Uncertain Future as Fairfax Africa Fund Chairman Warns of Imminent Airline Failures
The Fairfax Africa Fund, investors behind the controversial Nigeria Air project, has issued a dire prediction about the fate of Nigeria’s domestic airlines, warning that all but one will likely collapse under the weight of the country’s worsening economic crisis. Zemedeneh Negatu, Global Chairman of Fairfax Africa Fund, revealed this grim forecast while responding to recent statements by Prof. Obiora Okonkwo, Chairman of United Nigeria Airlines, who described the aviation sector as being on “life support.”
“None of Nigeria’s airlines operating today, except one, will survive even if they were to be given tens of millions of dollars in government (taxpayer) bailouts in perpetuity.”
Negatu also accused Air Peace and United Nigeria Airlines of orchestrating the downfall of Nigeria Air through legal actions led by the Airline Operators of Nigeria (AON). According to him, the failure of Nigeria Air, a project that he believes could have brought substantial foreign direct investment (FDI) to Nigeria’s aviation sector, was the result of self-serving interests masquerading as patriotism.
“Promoting self-interest under the guise of ‘patriotism’ is not a viable long-term business strategy.”
He further criticized these airlines for blocking what he described as a crucial FDI opportunity, including significant American investments that could have stabilized the sector.
The legal battle culminated in a landmark judgment on August 5, 2024, when Justice Lewis Allagoa of the Federal High Court in Lagos ruled that the sale of shares in Nigeria Air to Ethiopian Airlines was illegal. The court invalidated the bidding process, revoked Nigeria Air’s Air Transport License, and permanently barred the former Minister of Aviation, Hadi Sirika, and Ethiopian Airlines from further involvement in the project.
Prof. Obiora Okonkwo, speaking on behalf of the AON, dismissed Negatu’s predictions and accusations, pointing out that the economic challenges facing the aviation sector are a broader issue, not the result of Fairfax’s failed investment in Nigeria Air.
“If anything happens to airline operators in Nigeria, it won’t be because of Negatu’s prediction but due to the broader economic environment,” Okonkwo stated, defending the actions of the AON as necessary to protect the Nigerian economy from what he termed as “dubious transactions.”
Okonkwo went on to explain that the AON’s legal victory was crucial in preventing a monopolistic arrangement that would have disproportionately benefited Ethiopian Airlines and its collaborators at the expense of Nigeria’s economy.
“We consider ourselves heroes because they couldn’t contradict any accusations that the AON made against them in court which are that the transaction is dubious and they just wanted a monopoly which would have drained our economy.”
As the aviation sector in Nigeria continues to grapple with economic challenges, the fallout from the Nigeria Air controversy casts a long shadow over its future. With industry leaders at odds and the threat of airline failures looming, the path forward for Nigeria’s aviation industry remains uncertain.
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