As airlines in Nigeria continue to suspend operations due to the various economic challenges confronting them, experts have identified the huge cost of foreign maintenance, repair and overhaul (MRO), which totals $3 billion annually, as a major drain on their profitability.
Aviation experts who disclosed this also called for a holistic approach to solving the lingering crises in the sector.
It was gathered that two domestic airlines, Aero Contractors and First Nation Airlines, suspended their operations recently.
Speaking with Newsmen Friday yesterday, the chief executive officer (CEO), Onedot Aviation, Captain Henry Oludotun Ogunyemi, disclosed that Nigerian airlines will be saving the $3bn annually spent on maintenance abroad if they patronize local MROs.
He averred that the era of overseas base maintenance on B727 and B737 classic aircraft will soon be over, with the springing up of indigenous MROs, which will afford the airlines opportunity to undergo major checks on their aircraft here in Nigeria.
“There will be reduced stress on the dollar currency and this cuts across all the airlines. It is cheaper for the airlines to carry out their maintenance in the country. First and foremost, the ferry cost is saved as it takes time to ferry an aircraft to and from wherever it is done overseas.
“Even the ground time is saved as, sometimes, some aircraft stay six months and others stay a year. So the airline will save in ground time. Saving money and ground time increases the profit of the airline. So all airlines are free to check our services out.”
Ogunyemi added that using local MROs can enable them to increase their capacity and employ more Nigerians as well.
“We have experienced base engineers in Nigeria already that can take over from the expatriates, who are already on ground with the initial know-how and technology. With the MRO, there will be jobs for the teeming engineers that we have now.
“There will be job opportunities and there will be training and retraining of engineers to keep a base of sound technical hands who hitherto flew overseas,” he said.
In an in an exclusive chat with Newsmen yesterday, the managing director/CEO, Skypower Express Nigeria Ltd, Captain Mohammed Joji said there was the need for the government to set up a stakeholders’ forum to be chaired by the minister of state, Aviation, Senator Hadi Sirika, so as to consider the plight of the ailing airlines,
Corroborating Captain Joji’s position, the national president of the National Association of Aircraft Pilots and Engineers (NAAPE), Mr Isaac Balami, said that stakeholders have been responding to aviation stakeholders’ forum with the Aviation minister in the recent times.
The aircraft engineer lamented that government had not supported the airlines in the last 20 to 30 years the way it should be, stressing that Nigeria should learn from US, Europe, Ethiopia and even Kenya.
“The issue is that the enabling environment is not there. You import spare parts every day in a country where there is no dollars. Even aviation fuel is purchased in dollars. Aero has been out of this country for four to five times for C-Checks which is done in dollars. How can you buy dollars for N400 plus just because you want to fix an aircraft? In that case you can’t even make profit. Even the ones you want to fix locally, you can’t even access the dollar to fix it locally.
“The challenges are that when you bring in spare parts, you pay customs duty. Automatically, your profit is gone. In US and UK, once you move your aircraft into the hanger, they will just go across the next door, buy spare parts and fix it. You can’t even compete with them and government is not making any effort. So there is need for a holistic, restructuring and approach to the whole thing”, Balami said.
In his reaction, a former pilot with the Nigerian Airways, Captain Dele Ore, noted that the scenario is different. Speaking on the challenges of Aero and FirstNation, Captain Ore said: “FirstNation did not go into extinction. They suspended operations because there is a Nigeria Civil Aviation Authority (NCAA) policy that you cannot use one aircraft for commercial operations. If you have only one aircraft, you must suspend commercial operations till the other aircraft is back. They will resume on 15th of September because the equipment is arriving this week and they are going to mount their engine to the other aircraft so that they have two aircraft.”
On downsizing of its workforce, the aviation professional, who is also a frontline member of the Aviation Round Table (ART), said: “At the time Aero suspended operations, they had more than two aircraft. Aero is being pressurised by Assets Management Company of Nigeria (AMCOM) to reduce staff because they don’t have enough machines to measure up with their number”.
On his own part, the president, Air Transport Services Senior Staff Association of Nigeria (ATSSSAN), Comrade Benjamin Okewu, identified inadequate supply of aviation fuel, popularly known as Jet A1, as one of the major challenges operators face.
He, therefore, advised the government to break the jinx and allow the operation of smaller refineries so make the product affordable.
Okewu warned that with the deregulation of Jet A1, which is now imported, operators would find it more difficult to access judging from the fact that the naira is weak against the US dollars.
“Government needs to create room for operators to access dollars so that they can meet their obligations such as purchase of spare parts, fuel and maintenance. It is good government also make foreign exchange accessible to them”, Okewu advised.
He further added “Government must try to implement the various recommendations given by the national carrier committee. For instance, they recommended that aircraft leasing companies should be in Nigeria which has lower insurance costs. Government has to also provide aircraft maintenance in Nigeria so as to check capital flights out of the country. Capacity building for pilots, airport workers and other professionals are equally imperative”.
To make loans easy for operators to access, Comrade Okewu said government should equally liaise with international financial institutions so that financial facilities would be easily accessible to them which, which is usually at less than 5 per cent interest rates. By so doing, the aviation labour leader said operators in the sector would no longer get loans at commercial rates of about 15 per cent, stressing that it is quite difficult to break through with such exorbitant rates.
It was gathered that Aero Contractors Airlines, one of the oldest domestic airlines in the country, suspended its scheduled services from September 1, 2016. Less than 48 hours after Aero’s suspension, another airline, First Nation, equally suspended its operations too.
On Aero Contractors, a statement from the chief executive officer, Capt. Fola Akinkuotu, said the development was part of a strategic business realignment to reposition the airline and return it to the path of profitability.
This business decision, which is a result of the current economic situation in the country, has forced some other airlines to suspend operations or outrightly pull out of Nigeria.
In the case of Aero, Akinkuotu said the airline had faced grave challenges in the past six months, which impacted its business, and by extension the scheduled services operations. These factors, according to him, are both internal and external environmental factors that have made it difficult for the foremost airline to continue its scheduled services.
On the other hand, the director-general of the NCAA, Capt. Muhtar Usman, explained that the decision, as in the case of FirstNation, was taken in order to ensure that the airline carried out the required maintenance of its aircraft. Usman, however, refuted claims that some of the domestic airlines were winding up their operations regardless of the fact that they had suspended flight services.