International Journal of Business and Social Science Vol. 5, No.

13; December 2014

Nigeria Airways: The Grace and Grass Experience (A Case Study)

Oghojafor, Ben Emukufia Akpoyomare

Abstract
This paper reviewed the activities of the Nigeria Airways Limited from its glorious days to the time of its demise.
The study is both a library as well field study implying that desk researches and interviews were conducted. The
study is meant for the teaching and learning of cases for both under graduate and graduate students to elucidate
some of the likely challenges to government run businesses like an airline. It is suitable for general management
courses and management of public enterprises because it enables a discussion about administration and extent of
governments’ involvement. The setting is a developing nation – Nigeria. The industry background before and
after independence, and the transition within the Nigerian airways were examined. The study concluded by asking
the students to make suggestions on whether or not there is need for a national carrier and what needs to be done
to make it successful and competitive.
Keywords: Nigeria, Nigeria Airways, Air transportation, Airline, National Carrier, Aviation
1. Introduction
Air transportation in Nigeria like other African countries was a child of necessity during the British colonial rule
as the need to reach out to other colonies including Nigeria by the British government became imperative.
Nigeria just as other African countries created its government-owned national carrier to serve air transportation
need of the country as well as that of other continental and intercontinental countries.
Being statutorily the national carrier and sole domestic passenger carrier (Daramola, 2007), the airline had an
overwhelming competitive advantaged position conferred on it by statute and commercial monopoly (George,
1990), and had its fair share of the air transportation market both at the national and international level; and
flourished at some point as a reliable airline with the best of manpower support. However, that momentum could
not be sustained over a long period of time as it soon began to have challenges which led to its demise.
The Nigerian Government, after the demise of the national carrier in 2004, has been toiling with the idea of a new
national carrier. There seem to be incongruence as to the relevance or otherwise of another national carrier. More
so, as some think it is out of vogue, others feel that the issues which led to the demise of NAL if not properly
addressed may also lead to the failure of a new one.
1.1 Objectives of the Study
The intent of the study is to give students as much information as possible concerning the case study (Nigeria
Airways) and allow them fathom from it some of the challenges associated with the management of national
carriers; determine factors that inhibited the smooth operation of the airline; ascertain if a nation can actually
operate a national carrier and still provide high quality service; determine necessary organisational changes to be
considered by the Nigerian government for instance, so as to reposition itself and remain competitive if she
decides to operate another national carrier; and lastly to ascertain if really there is need for a national carrier.
2. The Company’s Background
The Nigerian national carrier popularly called “Nigeria Airways” is a defunct national carrier founded on the 23rd
August, 1958 with the name West African Airways Corporation Nigeria Limited (WAAC Nigeria).
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The nomenclature “WAAC” was upheld due to the prestige the company earned in the past as a joint effort
between four British West African colonies. The carrier being a tripartite company had Nigeria as the major
shareholder with 51%, while Elder Dempster Lines and BOAC owned the remaining 32 2/3 and 161/3 respectively
(Flight International, 1958a; 1960; 2003).
WAAC Nigeria inherited some aircrafts previously owned by WAAC and started operations on the 1st October,
1958 with a BOAC Stratocruiser VC 10 linking London with Lagos (Flight International, 1958b). A 15-year
agreement with BOAC to charter Stratocruisers and Britannias for serving long-haul flights between Nigeria and
the United Kingdom was signed the same day. The fleet of aircraft increased by April 1960 as it added one Dove,
eight Herons and eight DC-3s. On the 25th March, 1961, Nigeria became the only owner of the company as both
Elder Dempster and BOAC sold their shares to the Nigerian government (Guttery, 1998). The wholly owned
Nigerian airline was renamed “Nigeria Airways” and show-cased the Nigerian flag and “elephant” signifying “sky
power” as its emblem and served as the country’s flag carrier. This emblem was later changed on the 1st
December, 1988 to an “eagle” (Aero Control Ltd, 1988).
In conjunction with Nigeria Airways, a BOAC Comet 4 inaugurated the jet services between Nigeria and London
on 1st April, 1962. In order to replace the DC-3 aircrafts, five Fokker Friendship 200s were ordered toward the
end of 1962. The Fokker F-27s joined the airline fleet between January and May, 1963 and were deployed to
regional routes. A new agreement was signed with BOAC to operate Vickers VC-10 services on behalf of Nigeria
Airways from April 1964 till October 1969 when it was able to acquire the type of aircraft from British state
airline in October 1969 (Flight International, 1970). This aircraft crashed in November of the same year (Flight
International, 1971).
In early October 1964, Nigeria launched its first air link with the United States called “Operation Fantastic”. The
link from Lagos to New York was via Boeing 707s and DC-8s operated by PanAm following an agreement by
both countries that Nigeria Airways sell limited number of seats on these flights (Flight International, 1964). The
Boeing 707s was leased from Laker Airways and Ethiopian Airlines to fill the vacuum created by the crashed
aircraft on the Lagos – London route (Flight International, 1971; 1970b). By March 1970, the staff strength was
2,191 and the fleet comprised one Aztec, one DC-3 and six Fokker F27s which worked on a domestic network
and regional routes extending west up to Dakar and operated a pool agreement with Ghana Airways. The Nigerian
Airways also operated some European destinations all served by VC10s chartered from BOAC; these destinations
include Frankfurt, London, Madrid and Rome (Flight International, 1970a).
The “Nigeria Airways” became a limited liability company in 1971(Aero Control Ltd, 1988). Despite its new
status, it was not spared of government interference and control (Interview with Mr. Enah Samuel, June 30,
2014). In 1972, two 737s and another 707s were ordered; and by October of the same year, under a lease
agreement with Fokker, the Fokker Fellowship F28 entered the fleet, and the type was ordered later that year. A
contract for management assistance was signed with Trans World Airlines (TWA), an American Carrier providing
specialists in different managerial, technical, commercial and financial fields in the same year for five years
(Flight International, 1972). The contract over, a similar agreement was signed in September, 1979 with KLM but
this time for a period of two years (Flight International, 1980).
Between 1975 and 1980, the fleet of aircraft had increased greatly to 26 with Boeing 707s, Boeing 737s, different
Fokkers (F27, F28), DC-10s, Aztec and the company became the 83 rd customer for the Boeing 727s as it ordered
two Boeing 727-200s (Flight International, 1976a; Wikipedia, 2014a). In 1981, Nigeria Airways became Airbus
40th customer when it placed an order for four Airbus A310-200s which joined the fleet late 1984 and early 1985
(Flight International, 1985a; 1981). A Boeing 747 was leased from Scanair in 1982, and the aircraft was deployed
on services to the United Kingdom, so that the DC-10s can be used on new routes to Frankfurt, Paris, and Zurich
(Flight International, 1982). In November 1983, there was an accident involving a Fokker F28 and the airline for
this reason withdrew all F27s and F28s. This reduced the fleet to a 22-strong by March 1985, with two DC-10s,
four Airbus A310s, three Boeing 707-320Cs, two Boeing 727-200s, ten Boeing 737-200s and one Boeing 737-
200C. Financed by a Japanese leasing company and the Equator Bank, another two Boeing 737-200s were on
order and delivered in 1989 (Flight International, 1985c; 1985b) . The carrier operated the last DC-10 ever built
(Flight International, 1989).
The national carrier for more than two and half decades, single handedly performed the functions of passenger
and freight movement on both domestic and international routes (Daramola, 2007).
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It had destinations in New York, London, Amsterdam, Libreville, Monrovia and many other African cities and
maintained offices in the world's most important destinations. It acquired terminals in Europe and in the United
States, and in fact was the first African airline to acquire a terminal in the United States particularly at the John F.
Kennedy International Airport (Ejuka, 1987).The airline was seemingly buoyant and enjoyed high passenger
patronage and was highly competitive even when compared with international carriers at the time (Sotunde,
1983).
Ogbeidi (2006) opined that the airline served as the human resource pool from where the new airlines drew their
staff when new airlines were permitted to operate within Nigeria's domestic airspace and had one of the best
international safety records among African airlines. It did not suffer lack of funds, markets, well trained
manpower, equipment or enabling environment (Olakunle, 2000). The airline had one of the best safety records in
African aviation and its pilots were some of the best in the field, such that some of the airlines' pilots were used by
the Nigerian Air Force during the Nigerian Civil War to fly through routes that were regarded as very precarious
(Decker, 2002 in Ogbeidi, 2006).
2.1 Location
NAL had its head office at Airways house in Abuja having been moved from Murtala Muhammed Airport
between 1999 and 2000. It has a major hub at the Murtala Muhammed International Airport, Lagos and secondary
hubs at the Mallam Aminu International Airport, Kano as well as Port Harcourt International Airport.
2.2 Mission
The Nigeria Airways had a mission “To be the safest leading airline in Africa”
2.3 Objectives of the Nigeria Airways
The Nigerian Airways had the following specific objectives:
1. To carry on business as an air transport undertaking and to do anything calculated to facilitate or is incidental
or conducive to the same.
2. Establish, operate, manage and arrange for the operation of air transport services for the carriage of passengers,
baggage, mail and freight to and from territories of West Africa or to and from or within any such territories to
any other parts of the world as the company may think expedient.
3. Provide and operate such service at cost plus commission on an agreed basis on revenue collected
4. To offer support services in case of national emergency for transportation of goods and persons
5. Do business in the same manner as other companies to enhance profitability.
6. An outlet for employment of the teeming youth population
2.4 Slogans
“West African Hopper” (1973)
“Western gateway to fabulous Africa” (1990)
“Skypower throughout Africa”
“Nigerian Airways: the friendly way to fly” (1994)
2.5 Management/Control Mechanisms
Being a public sector organ and dominated by the public sector, it had its planning, development and management
of the industry reflecting the characteristics of public enterprises management (Ehije & Nwosu, 1990). At the
beginning, the airline was managed by a number of foreign companies, including British Airways, KLM and later
code sharing with South African Airways (Adujie, 2004). It was assumed to have its peak in the early 1980s
during the KLM team two-year-management period (BBC News, 2002). Later on, the management responsibility
fell on the laps of periodic boards constituted by the Federal Government with a Chairman, Chief Executive
Officer/Managing Director and Executive members, all appointed by the Federal Government. These boards had
between 5 and 7 members. The Company Secretary served both the Executive board and the Management board.
The tenures of management and top officials of Nigeria airways were about two or less years as it recorded five
(5) chief executives within thirteen years (Aero Control Ltd., 2000). The industry was regulated by the Ministry
of Transport and Aviation.

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2.6 Funding/Profit
The airline was largely funded by the Federal Government (FG) of Nigeria being the principal shareholder.
Instances however abound when government ministries and parastatals used the services of the airline without
paying for these services. These depleted the finances of the airline (Interview with Mr. Alabi, June 30, 2014;
Flight International, 1987). A report of inquiry during the period 1961 – 1965 showed that before 1961-62 the
airline was making profit, but afterwards it operated at a loss, which totaled more than £500,000 in 1963-64 and
the officers of the airline were accused of lack of financial control, mismanagement and laxity in the recovery of
debts (Flight International, 1969). Mr. Enah in an interview added: “…if there was any loss in the early years of
operation it was not strikingly visible because of the government subsidy. However, the loss became apparent in
the later years because of dwindling national economy and the FG’s indebtedness…”
2.7 Competition
Nigeria Airways Limited (NAL) operated amidst other contemporary African countries that established national
carriers about the same period with NAL. As enunciated by Guttery (1998) some of those airlines were the Tunis
Air (1948); Ghana Airways (1958); Sierra Leone Airways (1958–87); Royal Air Burundi (1960–63); Air Senegal
(1962); Botswana National Airlines (1966–69); Air Djibouti (1963–70); Air Congo–Brazzaville (1961–65); Air
Burkina (1984); Air Tchad (1966); Air Congo, later Air Zaire (1961–95); Líneas Aéreas de Guinea Ecuatorial
(1969); Gambia Airways (1964); Air Guinée (1960); Air Bissau (1960); Lesotho Airways (1967–70); Libyan
Arab Airlines (1964); Air Malawi (1964); Air Mali (1960); Air Mauritanie (1962); Air Mauritius (1967); Royal
Air Maroc (1957); Air Namibia (1991); Air Niger (1966–93); Air Rwanda (1975–96); Somali Airlines (1964);
Royal Swazi National Airways (1978); Uganda Airlines (1976–2001); Zambia Airways (1963–94); and Air
Zimbabwe (1980); South African Airways (1934 to date); Ethiopian Airlines (1946 to date) and Egypt Air (1933);
Kenya Airways (1977 to date).
Most of these airlines are extinct like NAL, while some still exist and doing greatly. For instance, the South
African Airways is still South African’s national flag carrier to date; rated a 4-star airline and the first African
airline to join the Star Alliance group in 2006. Also, the Ethiopian Airline rated as one of the most profitable and
reliable airlines in the third world in 2010, is still the Ethiopia’s flag carrier wholly owned by the country’s
government. While many African state owned airlines remain often poorly run with business decisions made on
political basis and employment serving nepotistic purposes, Ethiopian Airlines remained professionally run and
managed (Koch, 1988). The airline is a member of the International Air Transport Association since 1959 and a
Star Alliance member since 2011. Kenyan Airways Limited though founded in 1977, is the flag carrier of Kenya
wholly owned by the government of Kenya until 1996 when it was privatized (Buyck, 2010); and is considered
one of the leading Sub-Saharan operators; ranked the 4th among the top ten that operate in Africa behind South
Africa Airways, Ethiopian Airlines and Egypt Air. In like manner, there were foreign airlines flying the skies of
Nigeria too. Nonetheless, when air operation was liberalized and deregulated, private operators established
airlines and were licensed to operate as charter carriers and unscheduled flights. Some of the operators include
Kabo Air, Harka Air Services, Okada Air, Harco Air Services, Bristow Helicopters, and Maina Air. Interviews
with Mr. Alabi and Enah (both former Director and Deputy General Manager respectively with the defunct airline
on the June 30, 2014) have this to say: “the licensed charter operators indirectly metamorphosed into scheduled
carriers by manipulative operational modalities and were sharing the market with NAL. Government seemed
unconcerned and paid no attention to their activities as it was rumored that most of the owners were highly placed
people in government quarters. The activities of the foreign airlines also stifled the market for NAL especially
during the era of deregulation of foreign exchange. The Nigerian currency was unexchangeable in Europe, and
even in some African countries, and these made operations difficult outside the Nigerian shores. Again, the issue
of the number of slots allocated to NAL for landing in most of its international flight was a challenge. The airline
was restricted to land only in particular airports in those countries; while in Nigeria, the foreign airlines never had
any restriction of which airport to land in. Passengers from Nigeria on international flights going beyond the
approved airports found it difficult to fly Nigeria Airways and so preferred the foreign airlines which could take
them directly to their destinations. Again, NAL attached so much importance to safety checks and security issues,
as it was tagged at a time as the safest and most reliable airline in Africa. Due to this safety consciousness flights
are cancelled in situations where it discovered that there are safety issues, whereas other airlines damned the
consequence and continued with the flight. This earned NAL a tag of inefficiency since there was frequent flight
rescheduling and cancellation so as to maintain safety”.
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2.8 Fleet
The airline operated the following equipment throughout its history (Aero Transport Data Bank, 2014). Airbus
A310-200, Aztec, BAC One-Eleven 400, Boeing 707-320, Boeing 707-320B, Boeing 707-320C, Boeing 727-100,
Boeing 727-200, Boeing 737-200, Boeing 737-200C, Boeing 747-100, Boeing 747-200, Boeing 747-200B,
Boeing 747-200 Combi, Boeing 747-200F, Boeing 747-300, Boeing 767-200ER, Boeing 767-300ER, Britannia
100, Comet, Douglas C-47A, Douglas DC-3, Douglas DC-8-30, Douglas DC-8-50, Douglas DC-8-60, Dove,
Fokker F27-200, Fokker F27-400, Fokker F27-600, Fokker F-28-100, Fokker F-28-200, Fokker F-28-400, Heron,
McDonnell Douglas DC-10-10, McDonnell Douglas DC-10-30, Vickers VC-10, Vickers Viscount 810.
2.9 Crashes
The airline recorded some crashes whilst some aircrafts belonging to the airline were often abandoned at the
hangars. Ore (2010) suggests that aircraft accidents could be traced to either the “airline” or “service providers”;
causes of accidents traceable to airlines reveal that Pilot error is 37%; Undetermined 33%; Mechanical 13%;
Weather 7%; Sabotage 5%; other human errors 4%, while other cause is 1%.
Aviation Safety Networks (Wikipedia, 2014a) recorded sixteen crashes against Nigeria Airways Limited and its
chartered flights; eight of which were fatal. The list includes events that reported fatalities as well as hull-loss of
the equipment concerned or both. The most fatal five are listed below. See appendix 2 for other incidents.
 November 20, 1969: Nigeria Airways BAC VC10 crashed on landing from foreign flight killing 87 onboard.
 January 22, 1973: Nigeria Airways Boeing 707-320C (a chartered flight from Alia Royal Jordanian Airlines for
Hajj) skidded off the runway and caught fire after one of the two main gears collapsed on landing at the Kano
Airport killing 176 out of the 202 on board.
 March 1, 1978: Nigeria Airways F28-100 crashed in Kano killing 16 due to airforce plane ramming into it.
 November 28, 1983: Nigeria Airways F28-100 crashed while approaching Enugu killing 53 on board.
 July 11, 1991: Nigeria Airways DC-8-61 (a chartered flight for Muslim pilgrimage) crashed in Jeddah, Saudi
Arabia from system failure killing 261 on board.

3. Industry Background
Schlumberger (2010) avers that Africa’s air transport industry has always been a relatively small player compared
with the global industry; and in most African countries before independence, their air services were primarily
based on European relationships and agreements. African countries negotiated and concluded their own air
services agreement when many colonies became independent, created government-owned national air carriers,
many of which failed; and pursued business models that entailed plying profitable international routes to and from
the territories of their colonial masters to subsidize the costly but extensive domestic route networks (Guttery,
1998).
Air transportation in the early days was recognized as “both far-reaching and essential for the development of
inter-African trade, improvement of the economic, social and cultural conditions of the African peoples” (OAU,
1973 in Schlumberger, 2010). This is basically because the existing roads and highways before independence
tended to serve only their own territories and were not interconnected.
Before Independence
Air transport in Nigeria was a spin-off of the British Colonial rule and a late form of transportation introduced by
the colonial masters (Ogbeidi, 2006). The British government at that time was maintaining an active Royal Air
Force (RAF) base in Khartoum, Sudan (Coleman, 1985; Wikipedia 2010). The practice in Nigeria was marked by
the wonderful but safe landing of the Royal Air Force aircraft in the 1920s on the horse race-course in Kano
(Wikipedia, 2010; Coleman, 1985). Without air routes, maps or radio communications the flight was regarded as
"a particularly hazardous operation".
The earliest known civil air transport activity in Nigeria was credited to one gentle man, "Bud" Carpenter (Ore,
2010; Wikipedia, 2010), in 1930, who owned the earliest type of the Light aircraft, de Havilland Moth (Coleman,
1985). Records showed that he frequently undertook high-risk flights between Kano and Lagos, using the rail
tracks as his guide and in the process piled up extra distance (Wikipedia, 2010).

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In 1935, commercial international operations in Nigeria were pioneered by the Imperial Airways which flew
regular airmail and passengers from London to Nigeria (Coleman, 1985). The Imperial Airways, forerunner of the
British Overseas Airways Corporation (BOAC), operated large four-engined aeroplanes known as the Hannibal
class or the Handley on the Nile route from Cairo to Kisumu, Uganda, towards the end of 1936, introduced
another route, Khartoum-Kano-Lagos flight on a once-weekly basis. This flight was operated with a relatively
small four-engined aircraft De Havilland 86 and one of its well known passengers was Sir Bernard Bourdillon,
who flew on the first ever commercial flight from Lagos (Wikipedia, 2010). Air services were operated from
Lagos to Port Harcourt, Enugu, Jos, Kaduna and Kano until May 1946 (Ogbeidi, 2006).
The economic recession in Europe at the end of the Second World War, forced a wide entry of Europeans to West
Africa being then the main source of raw materials for European industries, resulting into a wide market and an
ensuing economic boom in the area (Ogbeidi, 2006). Then the British West African colonies (Nigeria, Gold Coast
- Ghana, Gambia and Sierra Leone) had intensified agitations for independence and met May 15, 1946 to discuss
the means of effectively combating the perennial problem of transport and communication between the British
Isles and the colonies; and to form a joint company and an air transport authority to take over the services
previously operated by the Royal Air Force. The meeting produced the West African Airways Corporation
(WAAC) (Ore, 2010) which was charged to "Develop efficient air transport services in and around West African
territories. WAAC was set up by an Order-in-Council of the Colonial Office in 1946 just like its counterpart in
East Africa. The Colonies, British Overseas Airways Corporation (BOAC) and Elder Dempster Lines reached an
agreement that BOAC is to provide the technical and commercial staff, while its operation was supervised by the
West Africa Air Transport Authority (WAATA). The WAATA was bestowed with the powers to legislate and
execute policies and also keep under review all important air matters likely to affect aviation in the territories of
member states (Mahonwu, 1987; Ejuka, 1987). The supreme body of WAATA consists of the Governors of the
colonies with the Governor of Nigeria as the presiding officer. WAAC took over the major air routes established
by the Royal Air Force till 1956 when Kwame Nkrumah pulled Ghana out of WAAC to establish Ghana Airways
in 1957 having gained independence. Chief Samuel Ladoke Akintola, Nigeria’s Minister of Communication and
Aviation inspired by Nkrumah's decision, addressed the parliament on the need for a Nigerian Airways. The effect
of the meeting was the renaming of the West African Airways Corporation (WAAC) to WAAC (Nigeria) Limited
on 1st October, 1958 with the Nigerian government jointly owning the shares with the British Overseas Airways
Corporation and Elder Dempster.
After Independence
Nigeria Airways Limited (NAL) was set up as the first major policy of the Nigerian Government to serve the
needs of few air passengers; this in essence marked the history of civil aviation in Nigeria (Ogbeidi, 2006). As an
indigenous airline and the nation’s carrier, it was regulated as a new and fast growing industry. Government in its
second policy through Chief S.L Akintola pronounced that it was not going to interfere in the daily operations of
the airline though it will nominate the board of directors; government however retains the power to direct the
airline’s policy and to insist, if necessary, on government point of view (Daily Times, August 11, 1958). This was
the beginning of close monitoring, control and regulation of the aviation industry such that government could not
distinguish between interference and regulation. The aviation industry was considered too fragile to allow
industry technocrats unchecked freedom (Ogbeidi, 2006); more so, due to what it described as the financial
inabilities of private investors. The Civil Aviation Act of 1964 did not give recognition to private sector
participation both in the domestic and international airline business. There is the view that the profit margin of
airline business was too small for any private investor to go into (Daily Times, Aug. 11, 1958).
The period 1983 to 1995 in the history of NAL was remarkable as there was uninterrupted military rule and three
out of the seven chief executives were high-handed military officers whose tenures eclipsed the civilian character
of the airline management. Four out of the seven chief executives served a year each due to political instability
and therefore had little or no time to address the economic problems of the airline (Ogbeidi, 2006). There was
need also for government policy to fall in line with global trends in deregulation. These factors coupled with the
pressures from influential Nigerians who were ready to venture into the air transport business paved the way for
the deregulation of the industry (Dieprieye & Onyiuke, 1997). Government had no choice but to open its doors to
private sector participation in the airline business. The industry was deregulated at that period and the national
carrier emerged as one of the most corrupt government establishments with the highest level of financial
indebtedness (Ejuka, 1987).
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The industry deregulation was a landmark policy that changed the conservative policy of government to exclude
private sector participation in the aviation industry. With the deregulation policy, there was unrestricted
competition among intending operators leading to the proliferation of small airlines. About Twenty-five private
airline operators were licensed in the industry. They were authorised to operate non-scheduled passenger and
cargo air services within and outside Nigeria but Mr. Enah said, in practice the norm was circumvented as they
operated indirectly as scheduled carriers.
Later, three domestic operators, Okada Airlines, Kabo Air Travels and Gas Air were upgraded to scheduled
operators. Kabo and Okada were also granted permission to operate international routes. By 1994, the number of
licensed private airlines rose to twenty-eight out of which fourteen catered for passengers while seven operated
cargo services and the remaining seven operated chartered flights (Obitayo, 1998).
In 1995, the Aviation Development Company (ADC) and Bellview Airlines were granted permission to operate
international routes and the number of licensed air operators increased to one hundred and forty-four (Dieprieye
and Onyiuke, 1997). The era before deregulation witnessed the regulation of a single carrier, but the entrance of
new airline operators brought with it new challenges and responsibilities. Thus, deregulation required the need to
ensure high safety standards (Ogbeidi, 2006). Many of the private airline operators due to the high capital
intensive nature were in partnership with foreigners for the leasing of aircraft flown into the country to operate
scheduled and non scheduled passenger services. The private operators did not enjoy the total confidence of the
local investment market as Nigeria Airways was a good reference point for the operators of the financial market to
exercise caution because they argued that if government could not run a national carrier, a private investor would
have more problems operating such a business (Ogbeidi, 2006).
Many of the private operators who dared enter the business barring the risk soon began to have problem of
maintenance of the very expensive aircraft as envisaged by the financial sector. This led to reduction in fleet
(Dieprieye and Onyiuke, 1997) and liquidation in some cases while others collapsed outright. Some professionals
within and outside the industry did advocate for mergers among the many airlines in operation. Mergers and
acquisitions pre-suppose that the funding would come from the operators and that the partners would pool their
resources. (Ogbeidi, 2006).
3.1 Infrastructural Development Institutions and Aviation Administration
The economic boom of the 1970s snowballed into greater demand for both international and domestic air travel. It
became evident to policy makers that the available infrastructure was grossly inadequate. Thus, the federal
government included the Aerodrome Development Programme in the Third National Development Plan (1975-
1980). To ensure proper implementation of the project government removed the airport development and
management from the direct control of the defunct Ministry of Civil Aviation. In 1976, a new body, the Nigerian
Airports Authority (NAA) was created by Decree 45 to implement the Aerodrome Development Programme and
to, thereafter manage all the airports in the country. Between 1978 and 1984, a number of new airports with
modern facilities were constructed in Enugu, Yola, Port Harcourt, Sokoto, Kaduna, Jos, Calabar and Ibadan,
bringing the number of airports in the country to fifteen. By 1988, about seventy-eight landing fields existed in
the country, out of which 38 were privately owned and operated mainly by oil companies (NAA, 1988). By 2000
there were 19 airports staffed and operated by the Federal Airports Authority of Nigeria. The participation of
private airlines in the air transport industry in the late 1980s and decade of the 1990s remained a decisive factor in
the present operations of the aviation industry in Nigeria (Ogbeidi, 2006).
Presently, the Nigerian Federal Ministry of Aviation through the Nigerian Airspace Management Agency
(NAMA) established by Decree No. 48 of 1999; Nigerian Civil Aviation Authority (NCAA) established by
Decree 49 of 1999; and the Federal Airports Authority of Nigeria (FAAN) regulates air travel and aviation
services in Nigeria. NAMA formulates and implement policies; NCAA provides aviation safety and economic
regulatory services consistent with international standards, while FAAN takes care of the physical structures
within all the airports. The ministry in essence is responsible for formulation and management of government’s
aviation policies in Nigeria. It is directly responsible for overseeing air transportation, airport development,
maintenance, provision of aviation infrastructural services and other needs. The Ministry’s vision is “to be the
best Aviation Industry in Africa and one of the best in the world; while its mission is “to build a safe, secured and
efficient aviation industry focused on making Nigeria a hub that meets International Standards and Best Practices
for the African Continent.

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The country has 25 airports, operated by FAAN, with one owned by Akwa Ibom State. The major international
airports are Murtala Muhammed International Airport, Lagos, Nnamdi Azikiwe International Airport, Abuja,
Mallam Aminu Kano International Airport, Kano, Akanu Ibiam International Airport, Enugu, and Port Harcourt
International Airport, Port Harcourt in the Niger Delta (Wikipedia, 2014a). Some of the existing Nigerian airlines
are Aero Contractors, Arik Air, Chanchangi Airlines, IRS Airlines, Dana Air, Overland Airways, Med-view
Airline, First Nation and Associated Aviation. Nigeria’s international airports are served by many international
airlines, including Air France, British Airways, Lufthansa, KLM and Qatar Airways, etc.
4. Nigerian Airways and the Challenges that Led to Extinction
The services of NAL began to fall short of users’ expectations as the disadvantages of stagnation and diminished
initiatives for customer satisfaction often associated with monopolies became apparent (Akpoghomeh, 1989).
There were incessant increases of flight fares, flight cancellations, delays, poor-onboard services, poor customer
relations, missing luggages, huge staff outlay (serving the purpose of its inception) and poor equipment
maintenance and breakdowns (Ehije and Nwosu, 1990; Daramola, 2007). These shortcomings, Ehije and Nwosu
(1990) averred were universal air transport problems; only that Nigeria’s own was endemic.
Wikipedia (2014a) reported that the carrier had accumulated significant debts that outstripped its revenues
virtually from the mid-1980s; and an over-bloated workforce, plied some routes thought to be unprofitable
because it wanted its presence felt there. The lack of concern over the type of air craft and the quality of the
leasing company constituted some challenges to the free operation of Nigeria Airways in some locations. The
airline was accused of being plagued by mismanagement, corruption, and overstaffing (Brooke, 1987).
The airline was indebted to the tune of about $250 million and some cost cutting measures were introduced in
order to generate more funds to service the debts (Flight International1987; 1988). These measures included
raising of the local airfare by about 100 per cent and international airfare by 20 per cent. This did not yield the
required result as patronage dropped. The Airline earned $5 million monthly but spends about $5.175 million.
Salaries account for about $1.1 million; Servicing debts to the International Merchant Bank $500,000; Nigerian
Airport Authority Fees $375,000; International Air Transport Association (IATA) $1.1million, while $2.1million
goes for fuel.
IATA suspended NAL for non-payment of debts in January 1987 and the federal government was accused of
allowing the airline operate under the Second tier Foreign Exchange Market (SFEM) instead of under Central
Bank of Nigeria (CBN) as is practiced successfully by some other African countries (Flight, 1987).
As part of the cost cutting measures, government instructed a further reduction in the number of staff which stood
at 8,500 (a staff-aircraft ratio of 500:1) at that time, though 1000 jobs were cut late 1986 (Flight International,
1986). Unprofitable routes were also either to be reduced or discontinued (Flight International, 1987). In 1988
flights to Cotonou, Dakar, Douala, Kinshasa, Monrovia and Nairobi were discontinued as part of the measures
though flights were resumed a year later to some of the destinations.
In1997 the UK Civil Aviation Authority had banned the airline from operating within its territory citing safety
concerns; the Nigerian government replied by banning British Airways operations (Flight International, 1998).
By April 2000 the staff strength was 4,516, accompanied by a depletion of fleet which served a route network that
included Abuja, Calabar, Douala, Dubai, Jeddah, Jos, Kaduna, /Kano, Kinshasa, Libreville, London, Maiduguri,
Malabo, Port Harcourt, Sokoto and Yola (Wikipedia, 2014a). The airline witnessed mass exodus of its experts –
pilots, professional crewmen and engineers (Aero Control Ltd., 2000); and was accounting for as little as three per
cent of total air travel across Nigeria in 2000 (CBN, 2001).
The same year, the International Finance Corporation (IFC) was commissioned by the Nigerian Government to
assist in the process of restructuring and privatization of the airline (Tumba, 2000). They were left with the
option of either making the airline partner with a large European airline – Air France, Lufthansa and Swissair or
liquidate the carrier given that a fleet comprising about 26 aircraft in 1984 were gradually depleted to a three-
strong at that time.
In 2001 the UK cited safety concerns again when it refused to allow Nigeria Airways to operate the Lagos-
London route due to the Boeing 747 that was leased from Air Djibouti to fly the route (People’s Daily, August
11). The IFC withdrew from its advisory position in 2001 stating the unwillingness of both the company and the
government to carry out the necessary measures that would make the airline attractive to potential investors.
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There were also various allegations that the airline’s failure was accelerated by former Nigerian rulers who looted
and mismanaged the company (BBC News, 2002).
In 2002, President Olusegun Obasanjo irritated by the performance of the national carrier now left with only two
functional airplanes from a fleet of about 26 airworthy aircrafts in the early 1980s, ordered an investigation into
the management of the organization. An excerpt of the Justice Nwazota led commission of inquiry as reported in
the investigation of Ibekwe (2013a & 2013b) stated that the four-volume report submitted by the commission
revealed mind-boggling fraud, misappropriations and wanton recklessness running into billions of naira involving
several officials of the airline, administrators, travel agencies, financial institutions local and foreign companies,
as well as a prominent development organization (See Exhibit 1).
The Federal Executive Council (FEC), the country’s highest decision making body, met and approved a draft
White Paper on the commission’s report and directed the Ministry of Justice and the police to prosecute and
recover the stolen funds. It also directed the office of Secretary to the government to gazette the recommendations
of the White Paper (Ibekwe, 2013a). Those indicted by the commission of enquiry could not be compelled to
account for the loot. Government forced the airline to voluntarily liquidate (Interview with Mr. Enah). The carrier
ceased operations in 2004.
5. Reactions to the Failure
The President of the Aviation Round Table (ART) Captain Dele Ore in Mikairu and Eteghe (2012) raised issues
of the aviation industry policies not being enduring; and that government did not allow the managers in the
industry to do their job effectively. Government was accused of exhibiting an overbearing influence on the
management of the Nigerian Airways. The former Pilot with the defunct Nigerian Airways argued thus;
“In the last 52 years, we have had 34 ministers in the aviation industry and if we want to do a little bit of
mathematics, it is merely one minister for every 18 months. What kind of policy can you put in place that could
be enduring, it cannot endure and that is the bane of the industry. The industry would have been doing much
better, but we don’t allow managers to do their job’’.
Interview with Mr. Alabi Clement had him say this:
“…government interfered so much in the running of the airline and the Chief Executives could not work without
reference to the government. Government allowed very short time for Chief Executives and that made it difficult
for them to consolidate talk more of embarking on meaningful projects. In addition, government enjoyed free air
services and this was detrimental to the airline”.
Mr. Enah Samuel added that
“the check and balance systems were missing and so officers could not be held accountable for their spending.
There was no continuity between the out-going and incoming CEO in projects that are beneficial to the company.
Staff was deployed even though they do not reflect their specialties in the career structure. There was no prudence
in overseas postings and tours. The case of indiscipline and lack of commitment to duty by some sections of the
company was a challenge. They were accused of disloyalty in their operations”.
On Infrastructure Procurement and Maintenance Enah had this to say;
“there was the case of insufficient procurement of spare parts – inadequate spare parts and absence of short and
long term plans for the airline. The government seemed to overlook the fact that all transactions on procurement
of parts and aircraft were hard currency based; and with the devaluation of the Nigerian currency the airline could
not withstand the test of time since they were not granted exception by Central Bank of Nigeria (CBN) in the
course of ordering equipment and rendering of foreign services”. They were denied access to official exchange.
Aviation experts in Eze (2014), aver that government was responsible for the airlines failure as multiple
frequencies were granted international carriers with fluid policies that are arbitrarily changed to suit top officials
of government.
6. Transition within the Nigeria Airways
In order to address the issues raised concerning the Nigeria flagship carrier, the Nigerian government later came
to an agreement with Virgin Atlantic Airways to form Virgin Nigeria Airways, which was intended as a
replacement of the defunct airline.

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Virgin Nigeria Airways was founded in September 2004 as a joint venture between Nigerian investors and the
Virgin group. The Nigerian institutional investors owned 51% of the company and Virgin Atlantic Airways the
remaining 49% (Wikipedia, 2014a). This was intended as a replacement for Nigeria Airways while the ground
facilities of the defunct airline eventually taken over by Arik Air (Ezard, 2006). The airline’s inaugural flight was
on the 28th June 2005 from Lagos to London Heathrow, using an Airbus A340-300 aircraft. It became the national
flag carrier of Nigeria and had a fleet of more than 12 collections of Boeing 737-300 and Airbus A330-200.
The Nigerian government set a deadline of 30 April, 2007 for all airlines operating in the country to recapitalize
or be grounded in an effort to ensure better services and safety. The airline satisfied the Nigerian Civil Aviation
Authority (NCAA’s) criteria in terms of recapitalization and was re-registered for operation.
On the 19th August, 2008 Virgin Atlantic announced that it was “in talks to sell its 49% stake in Virgin Nigeria”
and reviewing “whether it is appropriate that the Virgin brand should remain linked to Virgin Nigeria”. This
followed a dispute which arose after Virgin Nigeria’s domestic operations were moved against its will by the
Ministry of Transportation to Terminal 2.
Virgin Nigeria had twice refused the directive to relocate its domestic operations from the international terminal,
citing the Memorandum of Mutual Understanding it had signed with the previous administration and pending the
appeal in a Lagos High Court as reasons for not complying. In 2009 January, Virgin Nigeria announced they
would suspend all long haul flights to London Gatwick Airport and Johannesburg, effective 27 January, 2009. On
the 17th September, 2009, Virgin Nigeria announced on their website they had rebranded as Nigerian Eagle
Airlines.
Nigerian Eagle Airlines also stated that they planned to focus on domestic and regional flights with further
expansion into Europe and eventually the USA. Virgin retained its 49% stake in the new Nigerian Eagle Airlines
with the remaining 51% held by Nigerian investors.
On 2nd June, 2010 following the acquisition of a majority share in the airline, Jimoh Ibrahim, the new Chairman,
announced that the airline had undergone a further name change to Air Nigeria Development Limited, branded as
“Air Nigeria”. On the 13th June, 2012, the carrier was grounded by regulators for safety checks (Wikipedia,
2014c). On the 6th September, 2012, Air Nigeria announced that the management had fired its staff “for being
disloyal” citing breach of trust as one of the main reasons. It also ceased all its local, regional and international
operations. Operations ceased on 10th September, 2012 (Brock, 2012). Enah opines that despite support fund
doled out to Air Nigeria; it could not still float due to misplacement of priority in the usage of the funds.
By October 2013, Nigerian government muted the idea of using the nation’s oldest commercial airline, Aero
Contractors as a national carrier (Eze, 2013). The airline is said to be heavily indebted and one of its aircraft
Boeing 737-500 classic parked at Murtala Muhammad International Airport was seen painted with Nigeria’s
national colours of green and white (Ateba, 2013).
7. Conclusion
Operating a national carrier is not peculiar to Nigeria, but rather common amongst countries. The government of
Nigeria transited from one form of national carrier to the other and is still transiting. The airlines one after the
other, all had one issue or another leading to their demise. Critics argue that it is no longer fashionable for
countries of the world to operate national carriers given the problems associated with such enterprises; others
posit that it is a nation’s pride and that so much has gone wrong without a national carrier (Eze, 2012). What
options are there for the Nigerian government and what organizational changes if any does the government need
to consider making? How can a National carrier be best positioned to serve its citizens as well as other passengers
of the world? Can Nigeria successfully operate a national carrier and position itself as a high quality service
provider when a number of players in the industry feel otherwise? What factors are inhibiting improved airline
services and how? Is there really any need for a national carrier?

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Interviews

Mr. Enah, Ejembi Samuel Former Deputy General Manager, Sales & Marketing, Nigeria Airways Ltd. 30/6/2014.
Mr. Alabi, Clement Sunday, Former Director and Head of General Administration Nigeria Airways Ltd. 30/6/14

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