The Ethipinan Airlines has emerged the preferred strategic equity partner to the Nigeria Air, following a successful bid process that lasted months.
The Minister of Aviation Sen. Hadi Sirika disclosed this in at a press briefing in Abuja on Friday.
He said Ethiopian won the bid with a consortium and they will have 95 controlling equity as the federal government still retains its 5 percent equity.
Ethiopian Airline will have 49 percent equity while the consortium of Nigerian businesses will have 46 percent and the Federal Government will owe 5 percent equity.
The Minister disclosed that Ethiopian Airline was the only airline that met the bidding close date and also met the evaluation criteria as well the technical and financial bids.
The airline is starting with an initial investment of about $350 million from all investors based on their equity participation.
Sirika said that: “The Request for Proposal (RFP) under the PPP act, governed by ICRC, is completed. After a careful, detailed and ICRC governed selection process, Ethiopian Airlines (ET) Consortium has been selected as preferred bidder, offering an owner consortium of 3 Nigerian investors MRS, SAHCO and the Nigerian Sovereign Fund (46%), FGN owning 5% and ET 49%.”
He said *the consortium has been subject to a due diligence process, after which the contract will be negotiated between the consortium and the FGN, leading to a Full Business Case, which will be expected to be approved Federal Executive Council (FEC). We expect this process to take 6-8 weeks.”
He said the airline will soon commence operations after it receives it’s Air Operator Certificate from the Nigerian Civil Aviation Authority (NCAA) any moment from now.
He said the airline will commence with between six to nine aircraft on a dry lease.
He said advertisement for employment has been sent out to employ qualified Nigerians into suitable positions.
Going down memory lane he said: On 10th June 2022 the Ministry received on time one closed bid by the Ethiopian Airline Consortium. Few others attempted to submit, but unfortunately could not meet the deadline. Since we did not collect the bids, we are not in a position to say who they are.
6. The evaluation Team, 11 Experts from ICRC, FMFB&NP, FMA and the TA met on the 20/21st July 2022 and again on 1st August 2022.
“The Ethiopian Airline Consortium bid was formally opened in the presence of a representation of Ethiopian Airlines, checking that all envelopes were closed and sealed at that point, 11am on 20th July, starting with the Technical Bid. The Financial Bid was opened, again under the observation of the Ethiopian representative, on 21st July 2022.”
“All 10 forms, as required by the RFP, were evaluated by the team. Unanimously, the assessment team cleared the Technical Bid, which had a total score of 89% out of 100.
9. In a further meeting on 1st August, 2022, the team assessed the Financial Bid further and graded it with a score of 15% out of 20.
10. The Ethiopian Airline Consortium got a combined score (Technical and Financial Bid) of 86.7%.”
“Ethiopian Airline Consortium was declared the Preferred Bidder and the evaluation Team will proceed with the a due diligence phase (completed for all consortium partners on 15 Sep. 2022)
b. Contract Negotiation between the Preferred Bidder and FGN” he stated.
He said full Business Case will be approved by FEC and the PPP process should be completed by mid November 2022.
Be said “The contract was negotiated with three final candidates, and a signature-ready contract has been finalized with Ethiopian Airlines for three Boeing 737-800 with a 16 Business Class and 150 Economy Class configuration. Should we update this para to the agreements reached in Addis that we will work directly with ET to provide three B737, initial crews and engineers, while NAL is recruiting 737 rated experienced Captains, First Officers and Cabin Crew, as well as aircraft engineers shortly to join Nigeria Air.”
The Minister of Aviation said just about N400 million has been on the build up to the national carrier on consultancy.
He also said an interim Executive Team of highly skilled Aviation Experts has been working since FEB 2022 to set up all the necessary regulatory and industry requirements to launch the National Carrier. All Executives have been approved by NCAA, the Air Transport License has been issued by NCAA, Nigeria Air (after having identified the first three aircraft) will now finalize all necessary Operation Manuals and then go through the inspection and approval process of NCAA.
He said the money spent for the launch of Nigeria Air, for all the requirements to establish an AOC and be admitted starting an airline operation, is well within the 5% capital investment of the Federal Government of Nigeria, that will be overall needed to establish the National Carrier initially for the AOC approval and everything else required by stringent national aviation regulations, as prescribed in the FEC approved Outline Business Case (OBC).
He said this OBC is the milestone for the preferred Bidder Consortium and has been met by the submitted business plan of the preferred bidder. It is the overall share capital of around 300 Mio USD, provided by the preferred bidder that will launch Nigeria Air to its full size of 30 aircraft and international operation within the next two years. No further FGN funding will be provided above the 5% share capital of the next national Carrier of Nigeria, which was provided to launch Nigeria Air.