FG inches towards new national airline, picks ‘preferred’ partner

• Proposed maintenance facility may save Nigerian airlines over $117Mn yearly

The Federal Government is moving very fast with the establishment of the much awaited national carrier as the government has selected ‘a preferred partner just as it has begun talks with the partner as they are at the final stage of Full Business Scale (FBS). The Minister of Aviation, Hadi Sirika is keeping the preferred bidder close to his chest.

While Egypt Air is partnering Ghana to set up a low cost airline and by extension a national airline for Ghana, Qatar Air is investing heavily in RwandAir by investing in their airport and the East African airline.

Qatar Air is equally in talks with Air Côte d’Ivoire with plans to make the country a hub for the carrier in West Africa.

This is coming as the government’s multi-million dollar aircraft Maintenance Repair Overhaul (MRO) is also coming on stream.

 The proposed independent MRO facility in Nigeria will serve the maintenance demands of airlines in West and Central Africa and also provide maintenance for national carrier and African leasing companies.

Sirika who spoke on the facility said the MRO will be structured as a Build Operate and Transfer (BOT) model with government acting as both the grantor of the concession and facilitator of the project, while the private partner consortium will be responsible for designing, building, financing, operating and maintaining the proposed facility for an agreed concession period.

The establishment of aircraft maintenance facilities in Nigeria could help airlines repair their aircraft in Nigeria and save the country a whooping $117 million on aircraft offshore maintenance yearly.

On the average, Nigerian airlines pay at least $2.8m for C-Checks of aircraft while their competitors could carry out such maintenance for a mere $500, 000, adding that insurance premiums paid on aircraft is quadruple of what legacy airlines pay around the world.

The cost of aircraft maintenance would have reduced by at least 30 percent if Nigeria had a maintenance facility in the country, but the absence of the facility has upped the cost of maintenance.

C-Check is performed approximately every 20–24 months or a specific amount of actual flight hours (FH) or as defined by the manufacturer.

This maintenance check is much more extensive than a B check, requiring a large majority of the aircraft’s components to be inspected.

This check puts the aircraft out of service, and the aircraft must not leave the maintenance site until it is completed.

Sirika noted that the proposed independent MRO facility in Nigeria will serve the maintenance demands of airlines in West and Central Africa and also provide maintenance for national carrier and African leasing companies.

His words, “The MRO will be structured as a Build Operate and Transfer (BOT) model with government acting as both the grantor of the concession and facilitator of the project, while the private partner consortium will be responsible for designing, building, financing, operating and maintaining the proposed facility for an agreed concession period”.

“The Consortium is expected to comprise of an Independent MRO company, Real Estate development company, Construction company, Financial and institutional investor. The proposed facility will have the capacity to serve both narrow- and wide-bodied aircraft maintenance requirements and will be located in Abuja, Nigeria”, he added.

Speaking on the preferred partner for the soon to be established national airline, the Minister stated that the establishment of a national carrier would enable Nigeria gain optimal benefits from Bilateral Air Services Agreements (BASA) take full advantage if the Single African Air Transport Market (SAATM), introduce competition, leading to competitive fares and better services as well generate employments.

“The national carrier project will be private sector driven with the government not holding more than 5 percent shares. The private sector consortium may comprise reputable international airlines such as Quantas, Leasing companies, Aircraft manufacturers, OEMs, financial and institutional investors.

According to Sirika, “The government is providing the required support by enabling the environment in terms of sustainable policies, allocation of BASA routes, provision of financial guarantees and ensuring fiscal incentives to sustain the success of the airline”, he added.

 The Minister said the project development phase has been completed with the development of the Outline Business Case (OBC) and subsequent issuance compliance certificate by the Infrastructure Concession Regulatory Commission (ICRC).

Wole Shadare