Boeing, Air Peace sign N406.8 billion aircraft deal

• Pact will strengthen Nigeria-US bond American Envoy

In a move that could reshape the country’s airline industry, Nigeria’s flag carrier airline, Air Peace has into strategic partnership with world’s biggest aircraft maker, Boeing for ten new Boeing 737 MAX valued at $1.19 billion (N406.8 billion). Each of the planes costs $113 million.

The airline announced the deal during a signing ceremony. Present at the events were United States Consul-General, Mr. John Bray and Boeing’s Sales Director for West and Central Africa, Larry Tolliver at the residence of Bray.

Chairman of Air Peace, Mr. Allen Onyema stated that the aircraft manufacturer offered him the aircraft at more than three times below the actual cost of the airplanes. It comes with incentive in terms of training, spares and other technical support for the new planes.

“We are not paying anything near the cost price of the aircraft. We have 27 aircraft. With the addition of these ten, it will bring it to 37. We are the first airline in Nigeria to acquire this type of highly efficient aircraft for expansion of our operations”.

With the acquisition of ten brand new airplanes, the carrier’s entire fleet is expected to rise to 37; just as the carrier plans to deploy the equipment on many of the international routes granted it like US, China among others. No delivery schedule for the new order was announced.

Described as the best-selling aircraft in recent years, the Boeing 737 MAX is an American narrow-body aircraft series designed and produced by Boeing Commercial Airplanes as the fourth generation of the Boeing 737, succeeding the Boeing 737 Next Generation.

Boeing 737 MAX is an American narrow-body aircraft series designed and produced by Boeing Commercial Airplanes as the fourth generation of the Boeing 737, succeeding the Boeing 737 Next Generation.

The American Consul General said another deal such as that would further strengthen the bond between the United States and Nigeria, just as Boeing boss, Tolliver stated that the firm partnered with Air Peace because of the track record of the airline and commitment to improving aviation not only in Nigeria but in Africa.

Tolliver further stated that the acquisition of the airplanes and by extension expansion of the carrier’s operations would enhance job creation of more than 3, 000 Nigerians, disclosing that the aircraft is, “the fastest selling aircraft Boeing has ever had”.

Speaking on decision to buy the planes, Onyema described the airplanes as very fuel efficient by over 40 per cent, stressing that aviation fuel otherwise known as Jet A1 is more expensive in Nigeria than elsewhere.

He pleaded with the Federal Government to speed up resuscitation of many of the refineries which would reduce importation of jet fuel.

His words, “Fuel takes 60 per cent of your operating cost in Nigeria but elsewhere it takes about 40 per cent. Fuel prices are very inconsistent in Nigeria. You can fly now and the price goes for example N200 per litres. By the time you land, it has again risen to N250 per litre.

With the skyrocketing cost of aviation fuel, airlines are said to be spending more money on operation cost and may not save money to pay for high maintenance checks like C-checks, which would cost as much as $600, 000.

Lack of constant supply of aviation fuel, otherwise known as Jet A1, has been identified as the major cause of cost of the commodity in Nigeria, where Jet A1 Nigeria is ranked amongst countries with the highest price cost.

In Nigeria, despite the stability in the lifting of aviation fuel across the country and the deregulation of the commodity, JET A1 has hit an all-time high of N220 per litre and up to N250 per litre in places such as Maiduguri and Sokoto.

The skyrocketing price of JET A1 in Nigeria has added to the pains of airlines, which use 30 per cent of their revenues for fuelling.

Just recently, the Managing Director of Medview Airlines, Alhaji Muneer Bankole, lamented the situation, disclosing that his carrier had spent N22 billion on aviation fuel in five years with cumulative cost by airlines said to be in the region of N80 billion within same period.

Prices of the product increase anytime it becomes scarce and due to the hiccups in the supply of aviation fuel to different parts of the country. There is no uniformity, adding that fuel marketers sell at arbitrary prices as the product is deregulated.

Perennial shortage of aviation fuel, coupled with the gridlock faced in moving the product have become a clog in the wheel of domestic airlines as they find it difficult to operate smoothly like their counterparts in other parts of the world.

Managing Director of Fidelity Bank, one of Air Peace’s financiers, Nnamdi Okonkwo said the strides the carrier has made in the last four years, saying they believed in Onyema’s dream and for setting up a debt service account to settle its debts.

Wole Shadare