Local wings gaining new heights
Nigerian airlines have been termed failure in the past because of their short lifespan. However, the recent pact between forward-looking entrant, Air Peace, and Boeing, with order for 10 new aircraft, may be re-writing the history book. WOLE SHADARE reports
New dimension
No doubt, Nigeria appears to be on the right path as far as economic recovery is concerned.
With recent confidence reposed in the country by foreign investors, it is expected that within a short span, the economy will come alive.
The last one year has witnessed various sectors of the economy experiencing some level of rebound just as new investment frontiers are opening up.
In the aviation sector, flying in and out of the country has also taken a new shape as the local facilities have been improved upon and training of personnel strengthened.
Following in this optimism, local airline operators are also consolidating their investment to give their passengers the best deal.
To ensure seriousness in this regard, Nigeria’s now biggest airline, Air Peace, is etching its name in history book by making order for 10 brand new B737 MAX airplanes, which will help it expand its operations within and outside the shores of the country.
These aircraft, which delivery date is unknown could help to change the country’s travel dynamics and bring prosperity not only to the sector, but one that could give employment to over 3, 000 people, mostly Nigerians.
The deal
There are indications that the signing of the multi-billion naira deal between Boeing and Air Peace could have happened as a result of new confidence the international community have in the sector and by extension the economy.
Nigeria’s aviation is seemingly on the rebound occasioned by stability and huge growth witnessed in the last two years.
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 10 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.
Boeing 737 MAX
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.
Speaking on the deal, the US Consul General to Nigeria, John Bray, said another deal such as this would further strengthen the bond between the United States and Nigeria, just as Boeing boss, Larry 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 over 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.
The deal is one that should gladden the hearts of Air Peace on one hand because of using the airplanes as a strong marketing strategy in the burgeoning aviation industry and on the other hand, Boeing because of the renewed confidence in one of its products by an African airline.
Avoiding past mistakes
The carrier, according to sources, should thread with caution because of the delicate nature of the sector and learning from Arik Air, which found itself in similar situation a few years ago before the bubble burst, leading to the precarious situation of the airline.
Arik is a shadow of its former self with sharp depletion of its over 30 brand new airplanes christened, “tear rubber” to less than five. It was, however, enmeshed in N500 billion financial mess that led to its acquisition by the Assets Management Corporation of Nigeria (AMCON).
Not a few people know the other plans or motive of Air Peace for the acquisition of the airplanes, one thing is certain. It would be a serious drain pipe on the carrier if the highly efficient aircraft are not put into maximum use or a situation where they remain on the ground more than they are flown.
The financier of the airline, Onyema, appears to be a shrewd business man, but efficient airline management goes beyond just acquisition of new airplanes.
The airline business is a very thin margin business. The most outstanding players make five per cent margins. The industry average is often 1.8 per cent – 2.3 per cent.
They make a whole lot of money, then go right ahead and spend almost all of it. The profitability of any one flight is dependent on so many factors: fuel cost, aircraft repayments, staff costs, navigation fees, landing and take-off charges as well as aircraft.
Bursting unto international scene
Air Peace may be repositioning for international flights before the end of this year. The airline had recently acquired two B777-200. The Federal Government had designated Air Peace to operate flights to London, Houston, Dubai, Sharjah, Guangzhou-China, Mumbai and Johanesburg.
This could be daunting for the carrier, especially Dubai, which is almost like a monopoly for Emirates Airlines and China, which traffic in Nigeria are enjoyed by Emirates and Ethiopian Airline. The London routes may most likely be a very good one for the airline because of huge capacity on the route.
A former Director in Medview Airline, who was in charge of its international operations, Mr. Lukeman Animaseun, said recently that any airline that is not a national carrier would find it difficult to successfully operate international routes from Nigeria.
His words: “It will be difficult for a privately-owned airline to operate international routes unless government is willing to fight for the airline, but if it a national carrier they know they cannot do all that because government will definitely fight back.
Another major factor why a Nigerian airline may find it difficult to operate international routes is capability in terms of finance.
This is because the charges are very high and it is paid in foreign currency. Nigerian airlines sell their ticket in naira and they sell at relatively low prices in order to attract passengers but the services for the aicraft are paid in foreign currency.
Last line
Notwithstanding these scary challenges, Air Peace looks set to break all the barriers and show the world that Nigerian airline can truly stand out and rewrite the terrible book that a Nigerian airline can truly succeed where others have failed.
