Economics of narrow-body aircraft for Nigerian operators

Narrow-body aircraft like Embraer 195-E2, Embraer 147, ATR aircraft series, and Bombardier Q400 among other smaller aircraft sizes are set to spearhead Nigeria’s airline industry’s recovery over the next decade as airlines adjust their fleets and operating models for a squeezed travel market, writes, WOLE SHADARE

Paradigm shift

Many Nigerian airline operators are seeing the sense or gains of operating narrow-body aircraft. There is a paradigm shift in the way established Nigerian airlines are thinking just as new entrants are equally avoiding the mistakes of defunct carriers to operate smaller jets as opposed to the big B737, A320, and other regional jets that are too expensive to manage.

Nigerian airlines

Not that there is anything wrong with airlines that operate or dominate their operations with bigger regional airplanes but they are known to spend more on maintenance and fuel consumption with many describing their actions as applying the wrong model ab ni tio.

This is evident in the number of disused aircraft that have been abandoned on the tarmac of many of the country’s aerodromes. At the tarmac are BAC 1-11, MD.-83, B737, A320, and A340 belonging to Hak Air that never flew for one day, Air Peace, and Aero Contractors among many others that are either defunct or still operating.

An insider who spoke to Aviation Metric said many years ago when Jet A1 was relatively cheaper, investors scrambled for many of the aircraft types lying fallow with many aircraft lessors and some in the deserts where they were stored.

In fact, there were insinuations that many of the country’s operators were happy to receive one extra B737-200, B737-300, B737-400, and B737-500 when they purchase one in what was tagged, “Buy one, get one free”.

Reaction to astronomical jet fuel rise

The sellers were said to be happy to sell the aircraft types to willing buyers in third-world countries as they migrated to new brands of B737 aircraft like the more sophisticated B737-700/800/900 series which are said to be more fuel efficient.

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Aviation fuel is currently sold for between N790 and N800 per litre and for 1,300, airlines operating CRJ and Embraer spend between N970,000 and N1.04 million for one hour trip.

At N45,000 for each of the passengers for a 90-passenger aircraft, the airlines rake in N4.05 million and N3.14 million on a 70-seater aircraft. Most times the airlines carry less than that number on most of their flights which are normally one hour.

Airlines like Arik, Aero Contractors, Air Peace, Azman, Dana, and Max Air are some of the carriers still operating classic B737 airplanes. While all other airlines are yet to wean themselves off the big, fuel-consuming aircraft, Air Peace is gradually and partially making a switch to narrow-body aircraft like Embraer 195-E2 and a few other aircraft types.

Narrow-body planes dominate sky

Nigerian airlines

The airline considered the biggest airline in Nigeria by fleet size and route network operates three wide-body B777 to some of its international routes.

Narrow-body aircraft like Embraer 195-E2, Embraer 147, ATR aircraft series, and Bombardier Q400 among other smaller aircraft sizes are spearheading Nigeria’s airline industry’s recovery as airlines adjust their fleets and operating models for a squeezed travel market.

To underscore the new business idea, Air Peace not too long ago took delivery of new Brazilian Embraer 195-E2 aircraft thus making the Nigerian carrier the first in Africa to acquire the latest aircraft.

The carrier is the first African carrier to take delivery of the aircraft type out of the 13 firm orders with another 17 purchase right orders making a total of 30 Embraer planes being expected thus making the airline second to Lufthansa globally, which ordered 35 of the same aircraft type.

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United Nigeria Airlines which started operations two years ago had been operating narrow-body Embaer 147, fuel-efficient airplanes.

ValueJet Airlines was founded with a mission to make air travel affordable to everyone, and a vision to build a global airline, connecting people with places that operate 90-seater CRJ900 jets which are very right for its operations.

As airlines rationalise their fleets as part of their survival strategies, an aviation expert who pleaded anonymity, said that narrow-body aircraft may become more important to their immediate recoveries after the COVID-19 pandemic.

 Ibom Air has a great future with the type of aircraft they operate. A mix of narrow body, fuel-saving aircraft, and bigger aircraft it expects to take delivery this year for its regional and inter-continental routes.

While it uses the right size of airplanes, virtually all other carriers with B737 classics and few Next Generation (NG) aircraft could say Mayday to them with the astronomical rise in jet fuel price amid the shrinking travel market. It is just a matter of time before the country begins to see less of Boeing or Airbus aircraft except for the peak period in December when there is a surge in domestic passenger traffic.

Experts’ views

A source said, “The longest distance in Nigeria by air is one and a half hours. In places like Europe, one and half hours distances are operated by trains, which is more economical. But, when you want to fly to such a distance in Europe, you use a turboprop aircraft. A CRJ900 aircraft is the same minute as a B737 in terms of speed and the fuel consumption is about 30 to 40 percent less than bigger airplanes”.

“Leases on bigger and fuel-guzzling airplanes do not make sense any longer. The lease rental on these aircraft is expensive and the reason the lease is expensive is that many Nigerians have violated the Cape Town Convention agreement which Nigeria is a signatory by refusing to release airplanes to their owners through litigations that tend to paint Nigeria as a risky country to do business with”.

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Chief Executive Officer of Ropeways Limited and a former Managing Director of Virgin Nigeria, Capt. Dapo Olumide, said airlines’ problems are self-inflicted with the use of the wrong type of aircraft for domestic operations.

He predicted that by the end of this year, there is a likelihood that fewer airlines would still be in operation because of their overhead and other associated costs.

The Chief Operating Officer (COO) of United Nigeria Airlines, Chief Osita Okonkwo said, “ If you look at the cost structure of every operation, first of all, you have the aircraft come which is in most cases measured in hourly bases or circle bases for engine, mainframe, and any other things you have in the aircraft”.

Some Nigerian airlines

Aircraft cost is one big chunk of it which you have to manage. The second component is the operating cost which is basically fuel, consumables, spare parts handling charges, all related to particular operations. When we started, fuel was N200 plus to N300. As of December 2021, we were buying fuel at N350. Suddenly, it rose to N500, and that was when AON started shouting. Then, it is around N790 and N800 now. You know that 99 percent of input into an aircraft is forex. There is nothing we produce in this country as far aircraft is concerned”.

Last line

Nigerian operators are advised to take the right decision by choosing the aircraft that best suits their business plan

Wole Shadare