Nigeria: Govt, Operators Move to End U.S.$2 Billion Aircraft Maintenance Capital Flight

21 June 2021

As part of efforts to end the huge capital flight spent on maintenance of aircraft overseas put at $2 billion annually, some operators in the aviation industry and the Akwa Ibom State government have taken steps towards developing maintenance facilities in Nigeria.

In the last four years, the Nigerian Civil Aviation Authority (NCAA) has given Aircraft Maintenance Organisation (AMO) certificates to Aero Contractors, 7-Star Global Hangers Limited, and Overland Airways for the maintenance of ATR aircraft in addition to the certification given to Execujet, a global maintenance organisation for executive jets.

Also, by early next year, the Maintenance, Repair and Overhaul (MRO) facility being built in Uyo by Akwa Ibom State government will come on stream, while the Chairman and CEO of Air Peace, Mr. Allen Onyema, has announced that the airline has completed plans to set up an MRO facility in Nigeria for the maintenance of its fleet and others.

Owing to these, industry experts said the move would end the huge resources spent overseas in the maintenance of aircraft, which is the highest operations cost to airlines after aviation fuel by Nigerian carriers and others.

The maintenance facilities would, in turn, be a source of forex earner for the country as airlines and aircraft owners in Africa and beyond could maintain their equipment in Nigeria.

The Head of Engineering and Maintenance of Ibom Air, Mr. Lookman Animaseun, told THISDAY in a telephone interview yesterday that it was good that the NCAA was licensing MRO organisations in Nigeria to save the country about $2 billion spent on aircraft maintenance overseas every year.

Animaseun said besides the Nigerian market, airline operators in West and Central Africa would also bring their aircraft to be maintained in Nigeria, which would attract forex to the country.

He said: "It is good that NCAA is licensing MROs. This is good for Nigeria. We also expect the MRO organisations to reciprocate and properly equip their facilities. I do not have any doubt that we can accomplish that.

"There is huge market for the facilities in West, Central and other parts of the continent and beyond. It makes me happy that the owners of these maintenance facilities have a good purpose. It is people we know their background and we have interacted with.

"These facilities will be saving Nigeria $2 billion annually if properly harnessed. We shall have more of the facilities by the time Akwa Ibom completes its own early next year.

"What makes me happy is that there is a huge market for these maintenance facilities. Aero Contractors, which has maintenance facility, cannot cope with the demand anymore. It should look for a place to expand its hangar. The company needs to up its game to match to what the industry is looking up to now."

Industry expert, Captain Ado Sanusi, told THISDAY that the MRO business is a good one. "But before investors go into it, they should do their commercial evaluation, looking at the manpower, the clientele and the skills so that their operations would be profitable," he advised.

On the market for the MRO facilities in Nigeria, the Managing Director of Aero Contractors, Captain Mahmood Abdullahi, said Aero Contractors had been having third party aircraft (from other airlines) for maintenance and they were not coming from Nigeria alone.

"You can see a lot of third party aircraft are here in the hangar. It is not only Nigerian airlines. There is the Democratic Republic of Congo, they have their Boeing 737 here and we have already signed with the Ghana Civil Aviation and they have given us the approval to maintain aircraft registered in Ghana.

"And so, we have an agreement with Passion Air in Ghana. So is Tunisia, they are working on it to get their approval and then Malta also, we are working on it to get their approval. Yes, we are working on all those approvals; once we have those approvals we will maintain aircraft registered in those countries in our facility here," Mahmood said.

He also spoke about the cost of taking aircraft overseas for maintenance, saying: "I think there are so many disadvantages to taking your aircraft out of the country for maintenance. If you talk about how much it is going to cost an airline to fly its aircraft from Nigeria, to probably Europe, or wherever it is going to, if you talk about the fuel that they would burn to go, navigational charges paid, the aircraft goes there, and then fly it back again.

"All these costs are saved by having an MRO here. We have saved the airlines such huge costs. Then, if you come to the maintenance aspect, you are talking about the labour. If they go there, they pay for man-hour in dollars, but here we charge them the man-hour in naira. So it is easy for them if they cannot access the forex, at least we are giving them an opportunity to pay naira here."

Onyema decried the huge costs the airline incurs maintaining its aircraft overseas, saying that the company has completed plans to establish a maintenance hangar in Nigeria.

He explained: "The establishment of a veritable MRO is long overdue. You don't want to know the amount of capital flight, monies that could have been used for other things in our nation is going abroad. Let me give you an example, at the last count, as at two weeks ago, Air Peace has 21 planes out of this country. You don't want to know the amount we are spending on those planes.

"We are at the mercy of these MRO owners overseas and you and I know the way they stigmatise us and everything in Nigeria. So you expend a lot of money taking these planes abroad. We need to have our MROs here. The good thing about having MRO is that you are not only going to be maintaining your own fleet, other Nigerians will come there, the whole of Africa will come here. Aviation is the same worldwide.

"Once you have EASA (European Union Aviation Safety Agency) approval for your MRO, you have FAA (US Federal Aviation Administration) approval for your MRO, NCAA approval and you have other civil aviation authorities' approval, the whole world will be coming here. And that will be capital influx, not the ones (forex) flying out of Nigeria. So it will help. Yes, Air Peace is ready, we have acquired the land, we are ready to give this country a maintenance repair and overhaul facility that Africa will be proud of."

Recently NCAA granted 7Star Global Hangar Ltd, AMO certificate to operate an all-inclusive Maintenance Repair and Overhaul facility.

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