Allure of luxury jets dwindles among wealthy Nigerians

• Dwindling fortune, high cost of maintenance to blame 
• ‘Anti-corruption war scares owners

 

In 2014, Nigerians were said to have spent $6.5 billion on private jets, making the country the largest market in Africa for luxury aircraft and one of the fastest growing in the world at that time. Nigeria was only competing with South Africa on the continent.

But since 2015, when President Muhammadu Buhari came to office, the numbers have dwindled, with many owners unable to maintain or keep their aircraft. It was a time ‘emergency billionaires’ bestrode the skies in super luxury jets that ranged from $5 million to $60 million.

No where in Africa, except in South Africa was there the number of private jets than Nigerian at that time. It became the singular fetish object of the modern billionaires.

A private jet owner, who spoke to Aviation Metric under condition of anonymity, lamented that the economic crunch in the country has made many rich people to sell off their jets because of the high cost of maintaining such equipment.

 

To compound matters, the international community took an interest not only in the taste of Nigerians for these private jets but the source of the money for their purchase.

The searchlight beamed on them by the United States, the United Kingdom and other advanced nations quickened the speed at which many of them sold their aircraft. It eventually appeared to be a case of the tap no longer flowing for them again.

The situation led them to quickly dispose of the planes to recover money on them rather than allow them to be seized, especially for those who cannot account for how legitimately they got money to purchase them.

Overflying the Nigerian airspace at the time were some of the best and of course, most expensive private jets these companies had on offer. It was period money talked in Nigeria. It did not only talk, it shouted. While the economic crisis took its toll on Nigerians, the taste of Nigerian rich men for luxury was anything but waning.

But today, with the economy at its lowest ebb, the luxury taste of Nigerian moneybags for state-of-the art private jets had dwindled.

The rush for the selling off their aircraft was deemed necessary as many had to abandon many of the airplanes abroad just as the Economic and Financial Crimes Commission (EFCC) and Assets Management Corporation of Nigeria (AMCON) went after many of the rich men who got bank loans to purchase their expensive equipment, without repayment plans and some others, who allegedly got involved in alleged shady deals.

A Nigerian registered private takes-off from an airport

 

Among aircraft that privileged Nigerians acquired were Hawker 900 XP, a luxurious wonder in the air. Each, according to an official of the Hawker  Beechcraft Corporation, cost $14.9 million. Also popular was 800 XP at the cost of $13 million each. Hawker 4000, which Dan Keady of Hawker Corporation confirmed, is about $21 million.

Top bankers were also not left out of people who bought private jets. Bankers, oil industry chieftains, wheelers, dealers and even church leaders were and still in the jet set. Just recently, Senior Pastor and General Overseer of Omega Fire Ministries International, Apostle John Suleiman, regaled everyone recently of how he bought his third private jet even in COVID-19 era; an indication that despite the tough economic realities, wealthy Nigerians still acquired costly private jets as they chose to travel in class.

Aliko Dangote, who is the richest African, few years ago, purchased a Challenger Global Express. Business mogul, Mike Adenuga of Globacom purchased a Falcon aircraft. Indeed, the Express also with a Rolls Royce engine and manufactured in 2008 was listed for $58 million in December, 2014.

The Global 7500 is reputed to still be one of the rarest private jets flying in Nigerian airspace having debuted in December 2018.

A sales firm was tasked with selling a brand new model for $70 million from an owner, who had purchased but no longer wanted the aircraft because of a downturn in business and was said to be ‘broke’.

Owning jets might be the peak of luxury living but it is not for everyone, even among the elite like the likes of Dangote, Adenuga and some few other wealthy businessmen.

In fact, industry experts say the allure of private jet travel lies not in the opulence, prestige or even the experience but in the time saved.

The common theme is people put a significant value on their time and peace of mind. They need to traverse relatively short distances as quickly as possible and private planes are sometimes the only way of connecting to thousands of hard-to-reach local and private airports across the country.

 

 

A source, who is into a private jet charter operation but who preferred anonymity said: “Between 2011 and 2015, there was proliferation of private jets in Nigeria because at that time, many became overnight millionaires and the only way to show wealth was to buy private jets”

“The rich never had it so good as they flew in luxury. Every major airport you went to, were private jets. Funds were available. Manufacturers of aircraft looked into Nigeria. Every month, one aircraft came into Nigeria.  Most of the monies were stolen and they showed off with their glittering planes. Maintenance cost was not a problem to them. They engaged foreign pilots which to many, was a great security breach”.

Despite the tough economic situation occasioned by COVID-19, the private jet business boomed again all over the world including Nigeria. The private aviation industry went from virtually no flights at the peak of the pandemic to thriving by year’s end.

The wealthy were turning to private jet operators to ask them to arrange flights, despite the huge costs.

Many owners of luxury jets converted their airplanes to charter operations for people who could afford the cost following grounding of scheduled commercial flight services as private operations thrived in 2020.

Most jet operations are cash based and that accounted for one of the reasons 50 per cent of the aircraft disappeared quickly from 2015 to date.

Those that were parked in remote places of the world as a precaution to test the resolve of President Buhari’s government on corruption never returned back to service.

The downsizing by oil companies, restrictions by governments across the world kept many wealthy individuals from travelling for holidays, shopping and conferences.

The situation allowed their airplanes to be grounded as they could not fly. Even trips to Holy places around the globe were cut as the rich could not fly to such destinations as the future remained bleak both for scheduled and private operators.

“It did not make sense for them to fly into Europe, America and other places in their private jets only for them to be isolated for 10 days as the aircraft remains on the tarmac. From day one, you start paying”.

“The rich men and women in Africa and Asia like to travel to Paris, Europe, America for shopping. Since COVID-19, the shops remained locked up. The attraction to use private jets to shop is no longer there as the big shops around the world are closed”, said a private owner”.

According to him, “The high cost of operating a private jet is humongous. You can buy a small Cessna for $1 million. You need 10 per cent of that to operate that airplane just like those in the region of $50 million, $60 million. You have to hire two pilots, get insurance and other essential things. You have to pay even when the aircraft is not flying. You have to maintain it whether you fly it or not. It cost so much money in dollars to operate an aircraft. You have to pay for over flier; that is, countries you are passing through before your get to your destination”.

An aircraft engineer with a private jet operator, who simply gave his name as Emuwa, said depending on numerous factors, the average price for a pre-owned BOMBARDIER/ CHALLENGER 604 is $6,291,300.00. A $3,145,650.00 loan over 120 months, including $13,106.88 per month in interest equates to a $157,734.58 per-period payment.

He further noted that based on 450 annual owner-operated hours and $4.25-per-gallon fuel cost, the BOMBARDIER/ CHALLENGER 604 has total variable costs of $1,390,950.00, total fixed costs of $427,198.08, and an annual budget of $1,818,148.08.

These budgets do not include the cost to purchase the jet, depreciation or the cost of capital (interest payments.) The Hawker 900XP prices range between $2,995,000 and $4,500,000. Direct operating costs are broken-down.

Fuel cost $4.40 per gallon, between $85, 645 and $171, 289 maintenance cost, engine overhaul is between $123, $782 and $247, $564, miscellaneous/ crew, landing/ handling goes for between $40, 000 and $80, 000, miscellaneous variable $5,000 and $10, 000.

Total direct operating cost is put at $480, 587 and $961, 173. Fixed costs like crew salaries according to the engineer is in the region of $243, 000, crew training costs over $43, 000, hangar where the aircraft is parked costs around $32, 000, insurance $23, 000.

 

How the private jet became the singular fetish object of the wealthy

Others, he said, are jet management which costs between $48, 000 and $50, 000, total fixed costs amounting to $404, 000 while total annual budget for operating the jet is over $800, 000.

The Gulfstream G550 is a heavy, long range business jet that received its FAA type certificate in 2003. It is sometimes also known as the GV-SP. The list price of a new G550 is currently about $61.5 million depending on the configuration.

Over 550 have been produced, including the Gulfstream G500, which has a lower fuel capacity and reduced range. The G550 replaced the Gulfstream V, and has improved aerodynamics leading to an increased range and fuel efficiency. It is the most successful model in Gulfstream history.

This aircraft is most common with super rich individuals like Adenuga, Dangot and highly influential clergy men like Bishop David Oyedepo among others.

These costs must be borne by a flight department irrespective of the level of aircraft utilization. Included in here are salaries for flight crew, annual training, hull insurance cost computed by multiplying a liability factor per $100 of hull insurance; and liability insurance based on $25million in coverage.

The general consensus about when jet ownership makes sense is when you fly more than 200- 250 hours a year, and the conservative cost of operating a jet is about 10 per cent of the cost of the jet.

Some of the costs of flying in this category include: crew salaries, chart and weather services, catering, satellite phone/ WIFI services, hangaring, and insurance.

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