Falling Planes

But it was not Obasanjo’s first attempt at solving the problem. Shortly after his inauguration on 29 May 1999, Obasanjo received a report from the Jonah Jang Panel. The report indicted all 12 past chief executives of the airline for ‘gross mismanagement and stealing’. Unsatisfied with the Jang report, Obasanjo instructed Justice Nwazota to carry out another investigation and ‘look into the financial position and financial management of Nigeria Airways and to examine all books of account and records to ascertain their compliance with appropriate regulations.’ Furthermore, the panel was asked to investigate the application of funds, including budgetary allocations, special grants, loans for specific projects and proceeds from the airline’s services as well as to verify, evaluate and ascertain just how much debt the airline authentically had between 1983 and 1999.

When Obasanjo met the Nwazota Panel in December 2001, it was to assure them of his support as their investigation had already begun to ruffle a few political feathers. A court order had already been issued, restraining the panel from discharging its duty but Obasanjo vowed to get the court order removed to allow for the smooth running of the panel’s investigation.

A year later, when the Nwazota panel of inquiry submitted its report alongside a white paper, the content was damning. The report indicted 20 former Nigeria Airways staff for their role in destroying the airline and recommended they be banned for life from public office. The panel revealed that over N6 billion ($50 million) had been stolen from the airline’s account and that another N25 billion remained unaccounted for. At an aviation industry event in 2012, Obasanjo said that it was clear that Nigeria Airways had sunk into failure; that mismanagement and corruption had made the airline lose its status as one of the fastest growing airline companies in Africa. ‘When I was leaving office in 1979 as the military Head of State,’ Obasanjo said, ‘I left behind 32 aircraft but 20 years later in 1999 when I assumed office as the elected president, there was one aircraft flying.’

In September 2004, Nigeria Airways officially liquidated leaving behind a web of debts, airplanes confiscated across the world and unpaid salaries amounting to over N70 billion. Despite the recommendation of the Jonah Jang Panel’s four-volume report that those indicted be prosecuted and the embezzled funds recovered, nothing was ever done. Instead, 19 years after the death of Nigeria Airways, Nigeria seemed to be actively pursuing the revival of a national carrier through the equally controversial, Nigeria Air.

On 26 May 2023, three days before the end of the Buhari administration, Hadi Sirika, the then minister of aviation unveiled a supposed national carrier, promising that 35 more planes would be acquired in five years.  It was, however, later revealed that the plane which was branded Nigeria Air during the unveiling was an Ethiopian Boeing 737-800 aircraft. Checks later revealed that the plane which was owned by Ethiopian Airlines was loaned to Nigeria for two days before it returned to its Addis Ababa-Mogadishu route.

In 1946, the then-British-owned British Overseas Airways Corporation established the West African Airways Corporation (WAAC) to provide aviation services to four colonies in West Africa: Nigeria, Ghana (then called Gold Coast), Sierra Leone and the Gambia.  Nigeria was the major shareholder, holding 68 per cent of the company, followed by Ghana which controlled 29.5 per cent. Sierra Leone held two per cent while the Gambia held the rest.

By the mid-1950s, the independence of these colonies was on the horizon, and on 01 October 1958, the WAAC was formally dissolved. Nigeria inherited the company and operated it as WAAC Nigeria, establishing Nigeria’s national carrier while the other shareholders went on to set up their own airlines.

In the 1970s, Nigeria experienced an oil boom: in 1971, the country joined the Organization of Petroleum Exporting Countries and, that same year, WAAC Nigeria was rebranded as Nigeria Airways. Oil production rose from 5,000 barrels per day as of 1958, to 2.3 million barrels per day in 1974, and government revenue increased from N200,000 to N3.7 billion within the same period. In two years, state profit increased by almost 50 per cent to an all-time high of N5.3 billion in 1976. According to the World Bank, ‘public expenditure increased greatly, as did the country’s access to international capital markets.’

During the oil boom, Nigeria Airways enjoyed a kind of golden age. Nigeria acquired more planes with the country becoming the 83rd customer to acquire two Boeing 727-200s. By 1975, Nigeria Airways employed over 2,000 workers. In 1979, Nigeria signed an agreement with the Dutch airline, KLM, to trainNigeria Airways workforce and make Nigeria Airways profitable. At the time, Nigeria Airways had a fleet of 28 airlines and more than 4,000 workers. The airline, however, had last declared a profit in 1963 and was now only being sustained by government funding.

On the last day of 1983, General Muhammadu Buhari took over Nigeria in a military coup. This coup changed the trajectory of Nigeria Airways. Over time, many of the KLM-trained staff were sacked while Air Commodore Bernard Banfa was appointed managing director of Nigeria Airways.

In the mid-1980s, global oil prices began to dwindle and by 1986, oil prices had collapsed. With Nigeria highly dependent on oil revenue (oil accounted for less than one per cent of Nigeria’s GDP in 1962 but rose to 36 per cent in 1985), Nigeria’s economy was badly affected and that was when the rot within Nigeria Airways began to unravel. In 1987 the New York Times described the airline as ‘Nigeria Airwaste’ claiming that:

In 1987, the International Monetary Fund urged the Nigerian government to privatize Nigeria Airways as it was increasingly becoming evident that it was being mismanaged and only being kept afloat with government spending. In 1987, Nigeria’s minister of transport and aviation, Brigadier Jerry Useni, described Nigeria Airways as a disgrace and accused employees of, ‘lateness, delays, outright cancellation of flights and a nonchalant attitude of the staff toward customers are now part of your operational guide.’ Despite 3,000 workers being sacked in 1987, the nosedive the airline was experiencing continued, with the company being accused by the BBC of mismanagement, corruption and overstaffing. Despite earning $5 million monthly as of 1987, the airline was spending about $5.175 million monthly, with salaries accounting for about $1.1 million; debts repayments to the International Merchant Bank taking $500,000; Nigerian Airport Authority Fees collecting $375,000; International Air Transport Association (IATA) receiving $1.1 million, while $2.1 million went to fuel expenses.

With Nigeria Airways owing as much as $250 million, the IATA suspended the airline from the clearing house for non-payment of debt in 1987. In early 1988, two planes were seized in Europe for non-payment of refuelling, maintenance and landing fees. The airline lost $350,000 for not completing payment for an order for six ATR-42s. Nigeria Airways continued to operate at a loss, with a key loss driver being that government ministries and parastatals used the services of the airline without paying. By 1992, three Boeing 707s were impounded in Europe for both safety reasons and unpaid debt.

In 1997, the UK Civil Aviation Authority banned Nigeria Airways from operating within the UK, citing safety concerns. In response, the Nigerian government banned the Nigeria operations of British Airways, a move that did little to save the image of Nigeria Airways. Subsequently, experienced pilots, engineers and flight crew left Nigeria in droves, further weakening the operations of Nigeria Airways. This left the airline accounting for as little as three per cent of total air travels across Nigeria by 2000 according to the Central Bank of Nigeria.

To rescue Nigeria Airways, in 1997, the government commissioned the International Finance Corporation (IFC) to assist with restructuring and privatizing the airline. Little was however achieved as four years later, the UK once again barred the airline from operating the Lagos-London route. The IFC withdrew from its advisory position in 2001, stating the unwillingness of both the company and the Nigerian government to carry out the necessary measures that would make the airline attractive to potential investors.

By May 2003, Nigeria Airways had only one airline and the number of its passengers had fallen from 2.1 million annually in 1985 to just 10,000 in the first quarter of the year according to the Nigerian government. The airline was also burdened with debt of over $528 million. In the same year, Nigeria Airways unceremoniously shut down.

And still, there was an epilogue to Nigeria Airways’ sad story: in 2004, Nigeria and the British airline, Virgin Atlantic, went into a partnership to revive an airline from the ruins of Nigeria Airways. Nigeria owned 51 per cent of Virgin Nigeria while Virgin Atlantic held the rest, and the new airline went into operation in 2005. Virgin Nigeria operated for three years before Virgin Atlantic announced that it was going to sell its 49 per cent stake. A 2012 Reuters report claimed that Virgin Atlantic had pulled out in frustration due to ‘interference by corrupt politicians and regulators.’ A year later, Virgin Nigeria was rebranded as Nigerian Eagle Airlines.

In 2010, Nigerian lawyer and businessman, Jimoh Ibrahim, acquired the majority share of the Nigerian Eagle Airlines and renamed it Air Nigeria. Two years later, however, its operation was grounded after the company fired all its staff ‘for being disloyal’ according to Business Day. On 10 September 2012, Air Nigeria ceased operations.