Africa’s $3.2b MRO market at risk

African aviation is in a quandary; operators can’t afford to keep spending their maintenance budgets abroad, while establishing their own maintenance, repair and overhaul (MRO) facilities is prohibitively expensive, WOLE SHADARE writes

Lack of will

Africa’s aviation potential is enormous but the will to harness it is what has pinned the continent’s burgeoning aviation sector to the wall and made exploiting the potential a tall order. A growing number of international and domestic operators are moving to provide for the continent’s needs.

Positive news

There are good success stories especially with Nigeria’s Aero Contractor that is developing capacity to solve in-house aircraft repair needs and by extension providing third party assistance to airlines within and outside the country. Aero Contractors has provided the inspiration. The successes and ambitions of the likes of Kenya Airways and Ethiopian Airlines, and the drive of global companies such as parts supplier, AJW, Lufthansa Technik and ExecuJet, are commendable.WWith more than $1.5 billion annually in airlines’ heavy maintenance spend lost to the continent, there’s no lack of incentive to help keep MRO at home.

Experts’ views

Experts at the just concluded African Aviation MRO Africa co-located with African Aviation Training convened by Chairman, African Business Aviation Association (AfBAA) and Chief Executive Officer, African Aviation Services Limited, Nick Fadugba, in Addis Ababa, Ethiopia, expressed hope that the single African Air Transport Market (SAATM) would help Africa realise its potential by encouraging collaboration and cooperation and a pan-African outlook to MRO.

Fadugba spoke about the imperative of MRO for African carriers, adding that such facilities would help African carriers to grow and become profitable.

He stated that in the early days, focus on MRO Africa was primarily on ensuring that Africa’s fleet of mostly ageing aircraft was properly maintained to ensure air safety, stressing that the continent lagged behind the rest of the world in terms of fleet modernisation.

According to Fadugba, “today, the fleets of many African airlines have been completely transformed with the acquisition of sophisticated modern aircraft, both turboprops and jetliners. New technology aircraft present new MRO challenges for African carriers, It is thus opportune time that the world’s leading MRO service providers and suppliers, long-term supporters of MRO Africa.”

The experts, however, lamented that much of the continent’s MRO business estimated at $3.2 billion was leaving the region. The 2019 air transport MRO market is ~$87B; Africa represents~four per cent ($3.2B); Asia Pacific 33 per cent; North America 23 per cent; Europe 25 per cent ($22B); Middle East nine per cent; Latin America six per cent.

Managing Director NAVEO Consultancy, Richard Brown, said: “There is expansion at African MROs.  However, a lot of MRO continues to leave Africa for Europe, Middle East, Asia and North America.

“Over the next decade African operators will generate strong MRO demand on some key aircraft models.”

In his African MRO demand forecast 2018-2028 by key aircraft model, Brown disclosed that B737 MRO spend would be $1.4billion by 2028 while B787 (Dreamliner) MRO spend triples by 2028. The forecast equally states that A320 family MRO spend quadruples by 2028.

Losses

These losses could be as a result of EgyptAir’s Partnership with Boeing Global Services (first in region); announced Line Maintenance in Dubai and plans to perform Airframe Maintenance in UAE; Kenya Airways outsourced 787 and 737NG checks to Joramco and Aerotechnic’s 50:50 partnership with AFI KLM E&M and Royal Air Maroc now operates four bays for A320/737 airframe at Casablanca.

Aero Contractors on the other hand is growing their MRO capabilities to establish a competitive 737, Dash 8 and helicopter airframe facility in West Africa.

Nigeria recently took the step of advertising for private sector partners to help underwrite the cost of MRO facilities. The government is reportedly looking at a build-operate-transfer (BOT) arrangement at either Abuja or Lagos.

The proposed facility would incorporate narrow-body and wide-body capabilities beyond the scope of Nigeria’s Aero Contractors. It’s been suggested Aero could form the core of a new, more ambitious national MRO operation.

Nigeria’s perspective

In Nigeria, the idea isn’t a new one. The state of Akwa Ibom is reported to have abandoned the construction of a $50 million aircraft repair area in 2015.

Findings at the Nigerian Civil Aviation Authority (NCAA) revealed that there are over 30 registered Boeing aircraft on the fleet of Nigerian carriers, including Azman Air, Air Peace; Arik Air, Aero, Medview Airlines and other carriers. They include B737-300; 400; 500; 600; 700 and 800 series.

Nigerian carriers with Boeing 737- Classics ferry their aircraft to Morocco, South Africa, Ethiopia, Europe, Middle East, United States or South America for the mandatory 18-month C-check, which costs operators an average of $2 million per aircraft.

Boeing aircraft constitutes over 60 per cent of the planes in the fleet of indigenous carriers.

The repair of aircraft in Nigeria would save the country about $ 1billion annually. For Boeing 737-300 and 737-500, the C-check is conducted after 4,000 flight hours, while for Boeing 737-400 and Boeing 747-400 it is conducted after 4,500 and 6,400 flight hours respectively.

In the case of Airbus A-330-341 this check is done every 21 months. The most detailed inspection is the D-check; this inspection is generally an overhaul.

Challenge to govt.

Nigerian aviation stakeholders have repeatedly challenged government to find a solution to the problem leading to capital flight as airlines have had to ferry their aircraft out and pay in foreign exchange to those that have maintenance facilities. For Boeing 737-300, 737- 400 and 737-500, this inspection is conducted after 24,000 flight hours.

Boeing 747-400 requires a D-check after 28,000 flight hours while for Airbus A-330-341, after six years. Further investigations revealed that for instance, to carry out a Ccheck on a B737-300 aircraft outside the country costs between $220,000 and $250,000, while the changing of a landing gear of the same aircraft brand costs around $80,000. D-checks costs much more.

In all, Nigeria can boast of having about 42 aircraft owned by airlines in the country, servicing domestic, regional and international routes. Unfortunately, a country like Nigeria with its pedigree as ‘Giant of Africa’ did not have an aircraft MRO facility until Aero took the bull by the horn.

Last line

It is now clear to that this region deserves a strong local independent MRO business if the continent is to run a very vibrant aviation industry by keeping all the funds in the region.

Wole Shadare