Domestic airlines abandon planes abroad over rising cost of maintenance – Businessday

Domestic airlines are increasingly finding it difficult to bring back their airplanes sent abroad for maintenance due to rising costs.

BusinessDay’s checks show that some aircraft have been stuck in different maintenance facilities in Europe, South Africa, the Middle East and the US. Four major domestic airlines have seven of their aircraft abroad for maintenance currently, though they claim they are not stuck.

Sources in the aviation industry however told BusinessDay that some of the aircraft have spent more than one year in these facilities with most of the airlines finding it difficult to bring them back into the country due to lack of access to dollars and also the weaker naira which has resulted in a spike in the cost of maintenance.

Sources at the Nigerian Civil Aviation Authority (NCAA) confirmed this development, adding that about 25 percent of existing aircraft owned by commercial airlines are on maintenance or AOG (aircraft on ground) either because they are no more airworthy or are due for maintenance.

Gbenga Olowo, President of Aviation Round Table (ART), explained that recently, there has been continuous depletion of the fleet of Nigeria’s domestic airlines.

Olowo recalled that in 2010, Nigerian airlines had 54 commercial operating aircraft but by 2014 the fleet had reduced to 39, noting that with declining fleet size, route expansion would be limited and robust schedule very difficult and down time for maintenance would impact negatively on schedule.

He attributed the failure of airlines to replacing or add more aircraft to their fleet to the harsh operating environment and high charges paid by the airlines to aviation agencies.

“Some of the airlines have sent their aircraft for maintenance and could not pay for the maintenance fee itself, so what they end up doing is that they leave the aircraft there,” Dung Pam, chairman, Governing Board of the Nigerian Aviation Safety Initiative (NASI) told BusinessDay.

Tayo Ojuri, an industry expert and Chief Executive Officer, Aglo Limited, an aviation support service, told BusinessDay that there has been a drastic drop in the number of functional aircraft in the country because most airlines can no longer pay for maintenance as a result of scarcity of foreign exchange.

“Airlines also pay for insurance using foreign exchange and when foreign exchange is not available to pay insurance companies, they will be left with no choice but to ground the aircraft,” Ojuri added.

BusinessDay checks show that Aero Contractors, which used to have ten aircraft in its fleet, currently has only two operational aircraft, three on maintenance and others have been returned to the leasing company. Dana currently has three operational aircraft, while two are abroad for maintenance. First Nation has two operational aircraft but one abroad for maintenance, while Medview has four operational aircraft and one abroad for maintenance.

Nogie Meggison, President, Airline Operators of Nigeria, (AON) said that a major challenge airlines continue to face is that they generate revenues in naira, whereas they carry out maintenance and purchase major aircraft parts in foreign currency.

Meggison said that with the current challenge of aviation fuel scarcity, it is now very difficult for airlines to comfortably carry out their mandatory checks and repairs on their aircraft, adding that with the weaker naira, the airlines are paying more than twice the maintenance cost.

BusinessDay’s checks also show that Aero Contractors currently operates triangular flights from Lagos to Abuja and Port Harcourt. It has three of its aircraft in maintenance facilities in Jordan and France.

On Aero’s operations, Isaac Balami, president of the Nigeria Aircraft and Pilot Engineers, told BusinessDay that the Asset Management Corporation of Nigeria (AMCON) is trying its best to revive the airline and make it as robust as it was before.

“I can tell you that a lot of investors have shown interest in investing in the airline and it is at AMCON’s discretion to decide how to go about it. Shareholders are also trying to see how they can look for money and bring in. If we are given ten aircraft now, we can start robust operations,” Balami said.

He explained that all domestic airlines are struggling and the government needs to intervene because the last intervention that was done was not for the airlines, as the banks took the money to settle outstanding debts.

“If Aero had the kind of money given to the banks, they would have gotten more than ten aircraft and paid back all their debt. At some point, Aero paid its workers (expatriates and nationals) about N700million monthly and still spent about N800million on aviation fuel every month.

“The airline also paid in dollars, almost every six months for maintenance abroad. The overhead cost was so much and there was no way we could break even,” Balami disclosed.

He suggested that government should encourage domestic airlines by building hangars here in the country for airlines to carry out maintenance and repairs on their aircraft.

He also suggested that the refineries in Warri, Port Harcourt and Kaduna be revived to provide aviation fuel for airlines, adding that government can partner with national leasing companies to provide aircraft for domestic airlines.