US embassy cable - 02ABUJA2509

UNCLAS ABUJA 002509 
 
SIPDIS 
 
 
E.O. 12958: N/A 
TAGS: ECON, EAIR, PREL, PGOV, NI 
SUBJECT: NIGERIA: MEETING WITH MINISTER OF AVIATION- 
NORTHWEST CODESHARING APPROVED; NIGERIAN AIRWAYS SET TO 
TAKE OFF 
 
1. (U) This is an action cable. See paragraph 9. 
 
 
2. (U) On August 15 Ambassador Jeter met Minister of 
Aviation, Kema Chikwe to discuss the status of code sharing 
requests by Northwest, Delta and American Airlines with 
their European partners. The Minister assured the 
Ambassador that Northwest would be approved as a code- 
sharer with KLM, which began flights out of Abuja on August 
15. 
 
 
3. (U) However, she said that American and Delta could not 
be certified because they have not submitted paperwork 
through the proper channels. Minister Chikwe stated that 
she had not been informed that Delta and American were 
designated under the U.S.-Nigerian Air Transport Agreement, 
though they were listed in the same Diplomatic Note as 
Northwest. In addition to the Diplomatic Note sent by the 
Embassy, she stressed that American and Delta must write 
directly to her requesting code-sharing approval. (See 
paragraph 9 for action request) 
 
 
4. (U) Minister Chikwe said while code-sharing is fine, she 
preferred that U.S. carriers fly directly to Nigeria and 
not under the code-sharing wing of European partners. The 
Ambassador mentioned that previously he had encouraged a 
delegation from the Ministry to visit the U.S. to discuss 
with American carriers of the profitability of flying 
direct to Nigeria. Before they invest, American carriers 
must also be convinced of airport security and safety, he 
emphasized. 
 
 
5. (U) The Minister countered by revealing Nigerian 
Airways' plans to dominate the Nigeria- U.S. route. To be 
more competitive, Nigerian Airways is vastly upgrading its 
fleet, acquiring nine new aircraft- two Boeing 747s and 
seven 767s. In addition, the Minister said Nigerian Airways 
is undergoing major organizational restructuring.  Nigeria 
Airways is doing better but not as well as she would like, 
crediting its slower than hoped progress and continued 
mismanagement. She cited the lack of cultural diversity and 
importation of new ideas as the primary impediment to the 
airline's development. The Minister revealed her plans to 
hire an experienced international staff to manage the 
airlines.  Anticipating opposition to this effort to hire 
managers of other nationalities, she said some Nigerians 
might resent this effort because they fear competition. 
 
 
4. (U) While Minister Chikwe wants to diversify staff, she 
opposed privatizing Nigeria Airways. She said, Nigeria's 
efforts to privatize have been a dismal failure. 
Privatization should be sequential, Ministry by Ministry 
and not all at once. Rapid privatization is a recipe for 
disaster and leads to inevitable conflicts with the 
Ministers, she continued. The Minister said all of BPE's 
privatization efforts have failed, citing Nitel and 
NigerDock as prime examples. The Bureau of Privatization 
contemplated privatizing Nigeria Airways, despite the 
Minister's opposition but desisted when the Vice President 
intervened. 
 
 
5. (SBU) Comment: Although perhaps overly bureaucratic in 
her position that U.S. carriers must write a letter 
addressed directly to her, she did not seem to oppose code 
sharing for our air carriers. The Minister also clearly 
acknowledged the need for major improvements to the 
operations of Nigerian Airways, which requires capital and 
industry knowledge. At the same time, she adamantly opposed 
its privatization. Subsequent to the meeting, newspapers 
began reporting that the Aviation Ministry intended to sell 
49 percent equity share of Nigerian Air to a United Kingdom 
based leasing company, Airwing.  This plan would seem to 
fit Chikwe's desire for the GON to maintain the controlling 
interest in the Airline yet still inject needed capital and 
know-how into its operation. However, according to some 
reports, Airwing has no experience in airline operations, 
except in aircraft sales and leasing. If so, the approach 
might not repair the airliner's management problem. 
Additionally, questions have been raised about the legality 
of this plan as it is not under the auspices of BPE's 
formal privatization procedure. 
 
 
9. (U) Action Requested: The Department is requested to 
inform Delta and American Airlines that they must submit a 
letter addressed to the Minister of Aviation requesting 
code-sharing approval. 
 
 
JETER