By Chinelo Obogo, [email protected]
Airport infrastructure has been a sore level of discourse within the Nigerian aviation business.
That is so as a result of apart some worldwide airports, most of the nation’s airports usually are not viable as a result of lack of adequate infrastructure whilst home airways have lengthy urged the federal government to make sure that the airports have obligatory infrastructure to make sure worthwhile operations.
Moreover infrastructure, Nigeria’s aviation business has been grappling with a number of challenges together with the astronomical rise in price of jetA1 gasoline, shortage of foreign exchange and double digit inflation amongst others. To discover the best way ahead for the business, the Federal Airport Authority of Nigeria (FAAN) lately held a Nationwide Aviation Convention (FNAC) with the theme: ‘Advancing the Frontiers of Prospects for Secure, Safe and Worthwhile Air Transport’, in Abuja from Wednesday, June 15 to Thursday, June 16.
The convention which was funded by FAAN was an avenue to debate, consider, analyse and synergise for the development of the aviation business in Nigeria. On the convention, the Minister of Aviation, Hadi Sirika, stated there was no going again on the implementation of the aviation roadmap tasks which embrace: Upkeep Restore and Overhaul (MRO) Centre; Aviation Leasing Firm (ALC); Agro-Allied Cargo Terminals; Aerotropolis or Airport Metropolis; Nationwide Provider; Africa Aerospace and Aviation College (AAAU); second Runway of the Nnamdi Azikiwe Worldwide Airport, Abuja, amongst others.
Airways battle for survival
Throughout the convention, Airline Operators of Nigeria (AON) alerted that no much less three home airways might shut down operation within the coming months because of the growing price of aviation gasoline, with worth of the product at about N714 per litre in some airports.
The AON Vice Chairman, Allen Onyema, who refused to call the airways stated that the aviation gasoline problem was not restricted to Nigeria alone, declaring that the nation’s case was fairly worsened by the hunch of naira in opposition to main currencies, particularly the {dollars}.
Each day Solar had earlier reported how Asset Administration Company of Nigeria (AMCON) has been within the eye of the storm over its administration of Arik Air and the 69-year-old Aero Contractors. 5 years after each airways have been taken over by the Federal Authorities over their enormous debt, they’ve continued to wrestle financially elevating fears of stakeholders over their survival.
Final month, the Nationwide Union of Air Transport Worker (NUATE) and the Air Transport Senior Employees Providers Affiliation of Nigeria (ATSSSAN), alleged that there have been plans to liquidate Aero Contractors and dispose off its property. It additionally accused the administration of the airline of planning to chop down its employees power by 40 % with out first negotiating phrases of redundancy packages with staffb regardless of its incapacity to finish redundancy cost of these despatched parking since 2016. On Arik Air for example , the unions accused the administration underneath AMCON of signing a lease settlement with the Home of 5A, a lessor that they declare was chased out of Aero Contractors. They alleged that there have been proof of collusion between the administration of Aero and Arik Air and that it will possibly say authoritatively that, like in Aero, the Home of 5A’s have been gifted Arik’s profitable routes of Lagos/Abuja/Lagos, Abuja/Port Harcourt/Abuja, and Abuja/Kano/Abuja primarily based on the launched schedule. They warned that Arik will quickly run into ‘monetary dangerous climate’ as to be unable to pay salaries.
One of many main selections Arik Air took which prompted its funds to nosedive was the acquisition of two A340-500 plane costing thousands and thousands of {dollars}, which grew to become commercially unviable by the point the airline took supply of the planes. At the moment, the worth of the naira had crashed and the airline was unable to repay the lease because the plane couldn’t generate sufficient income to offset its operational price.
The airline stored struggling and its funds was within the pink. In February 2017, AMCON took over and Mr. Kamilu Omokhide was appointed as its Receiver Supervisor with the accountability to show its fortunes round. At its peak, the airline had over 30 serviceable plane in its fleet with about 3,000 workforce. However by December 2017 when AMCON took over, it was already down. Arik Air itself which had about 10 plane on the time AMCON took over is now down to 5, and its workforce has been downsized as properly. On the time AMCON took over, the airline didn’t have operational funds, its insurance coverage premium had expired and it was neck deep in international and native money owed with a backlog of unpaid salaries and fees.
Foreign exchange shortage
Shortage of Foreign exchange has been a serious problem for the aviation business as all airways, floor handlers and repair suppliers have lamented how that is affecting their operations. The Vice Chairman, Aviation Floor Dealing with Affiliation of Nigeria (AGHAN), Mr. Bashir Ahmed, stated on the convention that the shortage of international trade has hindered the operations and growth of floor dealing with companies in Nigeria. He appealed to the Federal Authorities to take a vital have a look at the challenges within the business and machine a imply to addressing them.
In an unique interview with the Managing Director and Chief Government Officer of Skyway Aviation Dealing with Firm (SAHCO), Mr. Basil Agboarumi, he advised Each day Solar final yr that the Federal Authorities should to understand that as a necessary a part of aviation enterprise, floor dealing with firms additionally want intervention funding having been hamstrung by the massive fees they’re paying to import gear and the difficulties they face in sourcing foreign exchange.
He stated: “Essentially the most pathetic factor about our enterprise is that we don’t get customized responsibility waivers for gear importation like what the Federal Authorities did for the airways. It’s so pathetic that when folks speak about aviation, they solely speak about airways with out realizing that there are very vital points of aviation, which is why once you speak about flight delays and also you don’t have the appropriate gear on floor, it impacts operations. We consider that regardless of the airways are benefiting from the Federal Authorities needs to be prolonged to floor dealing with firms as a result of we supply our gear and machines from the identical market. The plane could be very pricey similar to our gear are additionally very pricey. With out insurance coverage the airways can’t function and with out insurance coverage, floor dealing with firms can’t function as we each submit our information to the NCAA to make sure that we’re totally insured.
“In 2020, we spent greater than N38 million to clear one gear and in 2021, we spent nearly N69 million to additionally clear one other gear and this doesn’t embrace the price of buy and delivery. It’s so costly as a result of when customs comes up with their rankings, you would need to pay except you wish to floor your enterprise and that’s the reason we’re interesting to the federal government to grant us import waivers similar to they granted the airways.”
Excessive price of aviation gasoline
In response to AON, so as to handle the problem of excessive price of aviation gasoline and shortage, the Federal Authorities accepted 10,000 metric tonnes of aviation gasoline to the airways, however stated the carriers have been but to entry it. Onyema defined that the airways hoped to start out lifting the ten,000 metric tonnes of aviation gasoline from Thursday.
“That’s the reason we ran to the federal government and the Federal Authorities has given us about 10,000 metric tonnes of gasoline at the price of N580 per litre in Lagos and about N607 per litre exterior Lagos. This isn’t the one concern. Because the COVID-19 disaster, most airways all around the world, together with Nigeria haven’t recovered besides these whose international locations have injected a lot funds to help them. That is no physique’s fault. It simply occurred. Authorities has tried its finest by giving us this aviation gasoline. This aviation gasoline can take airways out, not solely in Nigeria however in every single place on this planet. Some airways exterior Nigeria have closed down due to the results of rising aviation gasoline. If this stuff usually are not addressed in Nigeria, it will possibly have an effect on the underside line of all airways in Nigeria,” he stated.
A consultant of aviation gasoline entrepreneurs, John Abegunde, whereas talking, appealed to the federal government to not step into the business associated points in aviation gasoline provide, warning that this main jeopardise security within the system.
Abegunde defined that FAAN, NCAA and different authorities companies ought to fairly be extra involved in regards to the stringency of the aviation fueling requirement. “We needs to be cautious of portfolio buyers who are available in when there are alternatives within the sub-sector, however strikes out with their briefcases instantly there’s a challenges,’’ he stated.
Airport infrastructure
One of many parts of the Federal Authorities’s aviation highway map is the institution a Upkeep, Restore and Overhaul (MRO). On the convention, the FAAN MD, Capt. Rabiu Yadudu, stated Nigeria misplaced not less than $2.5 billion (about N1.25 trillion) within the upkeep of its plane to international Upkeep, Restore and Overhaul (MRO) services in 2021. He stated that such capital flight would have been saved if the nation had viable MRO services that would adequately cater for every type of plane. To hold out C-checks on Boeing 737 plane or its class which is completed each 18 months, airways spend not less than $1.8 million. It ought to nonetheless be famous that airways like Aero Contractors and 7Star personal MROs.
Yadudu stated: ‘’It was reported that Nigeria misplaced $2.5 billion (about N1.25 trillion) in MRO investments to neighbouring international locations. Having such investments right here would have created extra employment alternatives for Nigerians, income era and coaching of technical personnel for upkeep of plane.”
Each day Solar had earlier reported that the FG’s Public Non-public Partnership (PPP) deal that can see the institution of an aviation leasing firm and MRO facility has reached its closing stage because the Full Enterprise Case (FBC) has been offered to the Challenge Supply Group (PDT) for deliberation in Abuja.
The mandate of the PDT is to drive the PPP course of from inception to conclusions and to observe its implementation consistent with the Infrastructure Concession Regulatory Fee (ICRC) pointers. A dependable business supply confirmed to Each day Solar that each one the foremost steps required to finish the deal have been carried out by the PDT and that in two years, the business can have a world class MRO, which can be of big profit not simply to Nigeria however to different African international locations.
“Step one to hold out such a challenge is to promote for bidders, which was executed. When the bidders indicated curiosity, all of them made their submissions and the popular bidder was chosen. The federal government drafted the contract which was despatched to the popular bidder to undergo, make any corrections and submit again, then the federal government would put together the Full Enterprise Case which might be despatched to the ICRC for certification. After that, it could be submitted to FEC and whether it is accepted, the challenge would begin. The stage by which the PPP is now could be that the contract draft has been executed, it has been despatched to the popular bidder, they usually acknowledged, made their very own enter and returned it. It’ll be Construct, Function and Switch. They construct, function for some years and switch possession again to the federal government.
“The PDT did its due diligence by visiting the popular bidder’s headquarters within the UK the place they are saying they’ve their facility and the staff was very happy with what they noticed there. After the settlement is accepted, the bidder has two years to begin and full the challenge. So, we are able to say that the settlement has reached the ultimate phases,” the supply stated.
The Consortium of A J Walters Leasing Restricted and Glovesly Professional-Challenge Restricted was introduced final yr as the popular bidder to determine the leasing firm; whereas the Consortium of A J Walters Aviation Restricted, EgyptAir Upkeep & Engineering (EGME) and Glovesly Professional-Challenge Restricted as the popular bidder to determine the MRO.
