By Dickson Omobola
Global Chairman of Fairfax Africa Fund, a United States-based company, Mr Zemedeneh Negatu, Tuesday, faulted the ownership structure of Nigerian airlines, saying the industry’s dependence on sole proprietorship is unsustainable and inconsistent with the business models of successful aviation markets around the world.
Negatu warned that Federal Government subsidies would not resolve the challenges facing domestic carriers, saying Nigeria should instead adopt a model similar to those of successful airlines such as Emirates, Ethiopian Airlines, Singapore Airlines, Turkish Airlines and Qatar Airways, which are either fully or partly government-owned.
He shared his views on X, formerly Twitter, stating that most Nigerian airlines are thinly capitalised and owned by individual investors, making them financially vulnerable and ill-equipped for an industry that is capital intensive.
His words: “As I had warned publicly and repeatedly over the last four years, Nigeria’s airlines will not survive (except, maybe one) because of their structurally flawed business model: They are all thinly capitalised, heavily leveraged (resulting in perennial losses) and each owned by a single wealthy man as sole proprietor (except the regional state owned airlines and those taken over by Asset Management Corporation of Nigeria, AMCON). No major economy in the world has such an odd business model for its airline industry.
