West African Carriers Spend $1bn Annually On Aircraft Maintenance
Airlines in West Africa spend over $1 billion on offshore maintenance of their aircraft, Accountable Manager, 7 Star Global Hangar Limited, Isaac David Balami said at the weekend.
He said the cash taken out of the sub-region as capital flight could be retained if Aircraft Maintenance Repair and Overhaul (MRO) centres have the capacity to fix critical repairs on airplanes.
Balami said investment by government and private sector players in the aircraft repair value chain would grow the business and reduce capital flight.
He said the involvement of more indigenous players in the aircraft repair business would not only grow aviation technology, but ultimately lead to the manufacturing of not just spares, but a complete airplane.
He said it was regrettable that Nigeria accounted for the highest number of aircraft ferried overseas for maintenance constituting over 75 per cent of the expenditure.
Balami said: “Indeed, Nigeria is not alone in the critical infrastructure deficit. He further stated that none of the West African countries has a MRO, conceding the MRO hubs to Johannesburg, Nairobi and Addis Ababa, Ethiopia – all of which have national carriers that are dependent on Nigerian market for traffic.”
He said in the last few decades, the aviation sub-sector in the country had suffered because of its inability to establish proper Maintenance Repair and Overhaul facilities, a crucial infrastructure that ensures that the airline aspect of the business maintains a balance in its cost-intensity.
Balami said with the emergence of new MROs in the country it was logical to look at areas of synergy to grow the budding market.
He said: “Over $1 billion is spent annually on aircraft maintenance. Nigeria contributes about 75 per cent of this expenditure.
“That is a huge capital flight. Those of us that are in the sector and in MRO business, feel frustrated about it.
“This is obviously a serious blow to Nigeria’s economy because I think that if the Aviation Ministry has $1 billion, you can imagine what it will do with it.
“Yes, there is 100 per cent interrelationship between cost of airline failure and cost of maintenance overseas. Asides aviation fuel, maintenance is the second biggest cost for Nigerian airlines and it is affecting our airlines badly.
“The issue is when you put Boeing 737 on the ground and it is not flying, you will be losing over $100,000 every day. This is because your fixed cost and your variable cost are known.
You cannot change it because whether you fly or you don’t fly you will still do maintenance; whether it is after 500 hours, 1,000 hours or 18 months, whether it is D-check, whether it is C-check; that you are not flying does not mean that you won’t conduct checks on the aircraft,” he stated.
Balami identified high cost of maintenance overseas as the major reason why Nigerian airlines go under after a short period of operation.
“Aircraft maintenance is determined by the calendar and cycles. So when you are not flying, you may not be getting the cycles, but the calendar is affecting it; so at the end of 18 months, you must do it.
“When you do it overseas you spend extra cost, including fuel cost, visa for your crew, allowances you have to pay, hotel accommodation and time you are going to spend. You are also going to pay for navigational charges.
“If you are going to the US, you will be losing about three to four days. You will stop and fuel. What you will spend on your aircraft taking them overseas will be enough to pay your staff for a certain period,” he explained.
On the struggle for homegrown solution, he said both private and public efforts to revive the essential facility in Nigeria lately have not yielded the desired result.
He said the Akwa Ibom State government about three years ago completed its state-of-the-art MRO complex in the hope that both local and foreign investors will be attracted to complement it with more capital-intensive equipment and expertise, adding that none has been seen till date as the hangar lies fallow.
However, Aero Contractors, early 2018, made a breakthrough in aircraft routine maintenance programme for Boeing 737 classics types.
The facility, domiciled at the Lagos Airport reduced the cost of overseas repairs by half.
In an interview, Daniel Erin who is the Accountable Manager for DJSD Aviation Support Services urged the Federal Government to put proper policies in place that will allow local airlines to grow via homegrown MRO facilities.
Erin said no airlines could survive with fuel and sundry charges taking 60 per cent of revenue, while overseas maintenance and overhead compete for 40 per cent balance.