The successful operation of an airline by the Akwa Ibom State Government since 2019 has spurred two other states – Cross River and Enugu – to jump into the business: But is this a sustainable business for the sub-national governments to pump in scarce resources into? Aviation is too risky, delicate and difficult business to operate profitably, but due to the vastness of our nation and inadequate rail networks, state governments are increasingly finding it necessary to establish airlines to connect their states with the rest of the country. Zamfara in the North West, and Lagos, are currently building their own airports to improve connections and travels.
Gusau, capital of Zamfara, is a six-hour drive from Abuja. It is the only state capital in that region without air connection.
The new Lagos airport, expected to be completed in December 2025, is located along the Lekki corridor and is designed to complement the two Federal Government’s airports in the state and serve the growing middle class in the Lekki area.
It is built on 3,500 hectares of land and will have the capacity to handle 5million passengers in a year.
Lagos is, therefore, looking to floating an airline to operate out of the new Lekki airport. That axis has many industrial concerns like the privately-owned Lekki sea port and the Dangote refinery as well as many residential estates.
Akwa Ibom is the first state to establish an airline. Before then, it was among the first set of 15 states to build and operate an airport in the country. The airport was completed in 2009 and the first plane landed there in September of that year. The airport is currently being managed and funded by Ibom Air. The state is also building an MRO (Maintain, Repairs and Overhaul) facility, the first of its kind in West Africa. Ibom Air commenced commercial flight in June 2019 and recorded its first profit in 2022.
But due to the huge depreciation of the Naira in 2023, the airline recorded a N3 billion loss in 2023, only to swing back to profitability in 2024. In 2024, it posted N96 billion gross revenue; PBT of N16.6 billion and net profit of N6.8 billion.
But the crux of the matter which would determine their sustainability is the business models of these state-owned airlines. Of the three, Ibom Air is the only one that has its own Air Operator’s Certificate (AOC) – the authorization that allows an organization to own and operate an airline. Cally Air and Enugu Air do not have AOC, and this can impede their profitability. An AOC gives an airline full control of its operations, allowing it to make decisions on flight scheduling, route planning, and safety procedures. Such an airline will also be responsible for ensuring compliance with regulatory requirements and safety standards, which can enhance its reputation and credibility.Having its own AOC allows an airline to establish a strong brand identity and differentiate itself from other airlines. An AOC provides an airline with the flexibility to operate independently, make changes to its operations, and respond to changing market conditions. In the long run, having its own AOC can be more cost-effective for an airline, as it eliminates the need to rely on a third-party operator and can negotiate better deals with suppliers.
An airline with its own AOC is better positioned to comply with regulatory requirements and avoid potential penalties or fines.
Having its own AOC can facilitate an airline’s growth and expansion plans, as it can operate more flights, routes, and services without relying on a third-party operator. An AOC is a prestigious certification that demonstrates an airline’s commitment to safety, reliability, and quality, which can enhance its reputation and credibility in the industry. Overall, having its own AOC is essential for an airline to establish itself as a reputable and reliable operator, and to achieve long-term success in the aviation industry.
Cally Air is owned by Cross River State government. It commenced operations in 2021, but its flights are operated by Aero Contractors because it does not have an AOC. The airline is in talks with Valuejet Airlines to also operate Cally Air flights out of Lagos. While Cally Air currently operates with two aircraft, and Enugu is starting with three planes, Ibom Air has nine planes. Enugu Air does not also have an AOC; its flights would be operated by XE Jet Airlines under a two-year technical partnership, during which Enugu Air will obtain its own AOC. The process for obtaining an AOC is quite tedious.The behavior of the state governments is an important factor, too. Aviation requires top-rate professional management, and any political or bureaucratic interference with the airline’s management will kill the business. That’s what killed Nigeria Airways.
Safety is a crucial ingredient of aviation, and any airline that messes with it will die an untimely death. Ask Dana Airlines. Our safety records have improved considerably in the last decade: since 2012, no Nigerian commercial airliner has been involved in a major accident that has led to passenger death – a record attributable to effective regulations and adherence to safety. As state governments are now rushing into the industry, I urge NACA and other regulators to keep their eye on the ball.
