Ethiopian Airlines (ET, Addis Ababa) requested a 15-year tax moratorium for Nigeria Air (NWB, Lagos) during its strategic equity negotiations with the Nigerian federal government, according to draft documents leaked to the Daily Independent.

It is unknown if the government agreed to the proposal, but it has angered the Airline Operators of Nigeria (AON) and other stakeholders who slammed it as anti-competitive. It has reportedly been one of the significant reasons that spurred an urgent injunction application on November 11 filed by AOB trustees Azman Air, Air Peace, MaxAir (Nigeria), TopBrass Aviation and United Nigeria Airlines to have the start-up's Air Transport License (ATL) revoked. On November 16, the Nigerian Federal High Court in Lagos granted an interim injunction preventing the establishment of Nigeria Air pending another court hearing. The plan was to launch Nigeria Air in the fourth quarter of 2022 with three B737-800s dry-leased from Ethiopian Airlines.

According to the documents leaked by sources close to the Aviation Ministry, the tax holiday proposal was part of the draft commercial and strategic plan presented by Ethiopian Airlines to the Nigerian government for a 49% strategic stake in the new joint venture airline. "It is assumed that since this is an investment of strategic nature, (the) government of Nigeria will provide utmost support for the realisation of this project, including tax holidays for the airline during the formation period and initial years of operation, estimated to cover at least 15 years period," the document reads. "Tax-related matters will be dealt with in detail during the final negotiations and conclusion of the shareholders' agreement and the management contracts."

In an analysis of the Nigerian market, Ethiopian Airlines observed hurdles in the sector, warning that the project may not be successful without the tax holiday. The Ethiopian flag carrier expected to recoup its investment within 15 years.

Ethiopian Airlines was not immediately available to comment, but insiders told ch-aviation that the airline was pushing for government support on fees and taxes, but that nothing had been accepted or contracted yet.

According to the Daily Independent, in the draft agreement, the federal government agreed to assist Nigeria Air in accessing funding and incentive programmes before and after the commencement of operations. This was despite the government's public statements that Nigeria Air would be a private entity and not be given any special treatment.

Aviation Minister Hadi Sirika has stated that Ethiopian Airlines would invest USD300 million in the new national carrier.