Local Airlines Spend N44bn Annually On Overseas Maintenance
Overseas maintenance of aircraft costs scheduled local airlines excess of N44 billion yearly.
The capital flight, from a conservative estimate of about 70 operating airplanes, lately soared given the black market exchange rate of close to N500/$1.
Stakeholders said the loss, to airlines in particular and the economy in general was avoidable had the Federal Government kept to its promise of setting up local maintenance Repair and Overhaul (MRO) facilities in the last six years.
The Economic Confidential estimated about 70 aircraft currently on the fleet of nine local carriers. By the Nigeria Civil Aviation Authority’s (NCAA) rules, each airplane is due for a C-check maintenance every 18-month.
Except for Aero Contractors’ Aircraft Maintenance Organisation (AMO) that has limited capacity for a few B737 classic, most of the aircraft go overseas for C-checks at an average cost of $2 million (N940 million) per aircraft.
The Minister of Aviation, Hadi Sirika, was alarmed by the capital requirement of overseas maintenance back in 2016 when he launched the Aviation development master plan. Among the key priority components of the roadmap are a new national carrier, airport concession, aircraft leasing company and MRO to end or reduce the capital flight. None of the components has seen the light of the day.
Former President of the National Association of Aircraft Pilots and Engineers (NAAPE), Isaac Balami, said he was not surprised by the annual loss to foreign facilities and economies “because we are yet to give priority and support to homegrown MROs”.
Balami, who is also the Chief Executive Officer (CEO) of 7-Star Global Hangar, a private aircraft maintenance facility in Lagos, said: “In the wake of the COVID-19 lockdown and reopening, a palliative was given to the industry and different operators, including Car Hire service, got over N100 million as palliative. But none of Aero MRO, 7-Star Hangar, Evergreen Apple Hangar, and ExecutJet Hangar got palliative.
“Now, if Air Peace, Arik, Ibom Air or any airline comes to us that they want to fix their aircraft, do we even have the spares or money to do it? If you tell them to take the aircraft overseas because the local MROs have not been empowered, can they get CBN’s dollar rate? It is very difficult. So, can you sell tickets for N20, 000 or N30, 000, and then change at N480/$1 to do maintenance overseas? So, most times, they will just park the aircraft as you see them around.
“It is not because I run a MRO. But look at the issue too. Aside from aviation fuel, aircraft maintenance is the number two most critical aspects in aviation and its cost. It is a problem for the airlines in terms of cost. So, when you separate an industry like the MRO and you don’t support it, then it is a joke. You are killing the aviation industry indirectly,” Balami said.
Aviation stakeholder and aircraft engineer, Lookman Animashaun, reckoned that the local industry was not ready for the development it craves.
Animashaun said if truly the country was serious, the Federal Government should have floated a major MRO and not still be mouthing it in 2021.
“We should have built on what we had in Nigeria Airways then, rather than liquidating it. But, I must tell you that without sustainable MRO in the country, the industry will continue to experience capital flight. And when foreign exchange to carry out the maintenance is not available, as it is the case now, the aircraft will remain on the ground and we would keep having low capacity in the industry,” Animashaun said.
Secretary-General of the Aviation Safety Round Table Initiative (ASRTI), a think-tank group of the industry, Group Capt. John Ojikutu (rtd), observed that building aircraft maintenance depots had been on the Federal Government’s programmes as far back as the 80s.
But for political instabilities and policy inconsistency, Ojikutu said, the project remains in the tunnel and “never to see the daylights as long as it remains with the government administrators.”
“The cost of aircraft offshore maintenance is and has always been exorbitant. It ranged between $500,000 and $2 million depending on the required level of maintenance. If you imagine about 50 aircraft in a year for whatever level and at an average of $500,000 to $1 million for an aircraft, you might be looking at a total average of $25 million to $50 million.
“The question to ask is: do these airlines and aircraft operators make such earnings annually in returns to the CBN or we still must find money for them from the public reserve? That is the dilemma of our country in distress and now bleeding,” Ojikutu said.
