Tuesday, December 6, 2022

Ethiopian Airlines Preferred Bidder For Nigeria Air – Sirika 

Nigeria Air

The Minister of Aviation, Sen. Hadi Sirika has revealed that the consortium behind Ethiopian Airlines (ET) emerged as the preferred bidder among other 60 airline companies that applied to manage Nigeria’s national carrier, Nigeria Air.

Speaking to journalists over the weekend, Sirika said over 60 parties requested access to the data room but, unfortunately, could not meet the deadline. He added that ET had a total score of 89 per cent out of 100 and the assessment team cleared the technical bid.

“The request for proposal (RFP) under the public-private partnership (PPP) act, governed by Infrastructure Concession Regulatory Commission (ICRC), is completed. After a careful, detailed and ICRC-governed selection process, Ethiopian Airlines (ET) consortium has been selected as the preferred bidder, offering an owner consortium of 3 Nigerian investors MRS, SAHCO and the Nigerian Sovereign Fund (46 per cent), with the FGN owning 5 per cent and ET 49 per cent. 

“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 by the Federal Executive Council (FEC). We expect this process to take six to eight weeks.

“The national carrier, Nigeria Air, is well on its way to being launched with three Boeing 737-800 in a configuration suitable for the Nigerian market. Nigeria Air will launch a shuttle service between Abuja and Lagos to establish new comfortable, reliable and affordable travel between these two major Nigerian airports. Other domestic destinations will follow thereafter.

“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 five per cent capital investment of the Federal Government of Nigeria, that will be overall needed to establish the national carrier initially for the AOC approval, as well as every other thing required by stringent national aviation regulations, as prescribed in the FEC-approved outline business case (OBC). 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 USD300m, 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 five per cent share capital of the next national carrier of Nigeria, which was provided to launch Nigeria Air,” he said.

According to Sirika, on June 10, 2022, the ministry received on time one closed bid by the Ethiopian Airline consortium. Few others attempted to submit but could not meet the deadline. “Since we did not collect the bids, we are not in a position to say who they are,” he said. “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, 11a.m on July 20, [2022], starting with the technical bid. The financial bid was opened, again, under the observation of the Ethiopian representatives, on July 21, 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 per cent out of 100,” he added.

Sirika added that in a further meeting on August 1, 2022, the team assessed the financial bid further and graded it with a score of 15 per cent out of 20.

The Ethiopian Airline consortium got a combined score (technical and financial bid) of 86.7 per cent. 

The consortium Sirika said, was declared the preferred bidder and the evaluation team will proceed with the due diligence phase (completed for all consortium partners on September 15, 2022), followed by the contract negotiation between the preferred bidder and the Federal Government’s development of the full business case (FBC) issuance of compliance certificate for the FBC by ICRC and, then, the approval of FBC by FEC.

“We aim to finish this PPP process by mid-November 2022,” he disclosed.

He further added that three aircraft were sought out by the interim executive experts and several offers from highly experienced and competent operators were evaluated. The contract was negotiated with three final candidates and a signature-ready contract has been finalised with Ethiopian Airlines for three Boeing 737-800, with a 16-business class and 150 economy class configuration.

“In addition 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 first aircraft will arrive in Abuja for further work and NCAA inspection, demo flights and audit as part of the AOC requirements. In time, two others will arrive to complete the required three aircraft for a new AOC holder.

With the support of FAAN, the interim executive team has prepared ‘Terminal C’ at the Nnamdi Azikiwe International Airport Abuja and finalised a contract with the MMA 2 terminal in Lagos, for the operation of an initial shuttle between Lagos and Abuja.

Also, with the support of the FAAN, the national carrier has restructured and prepared the operations control center (OCC) at the Abuja Airport to run operations and act as headquarters of the airline.

Oluchi Okorafor
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