New, fuel-efficient aircraft as game-changer for Nigerian airlines

Nigerian airlines are changing strategy with a shift from the operation of ‘old’ aircraft to more efficient, fuel-saving airplanes. WOLE SHADARE writes that this could be a game-changer

Proving naysayers wrong

The outbreak of the COVID-19 pandemic and its devastating effects on air travel and aviation were massive. All over the world, the future of airlines was bleak, fueling suspicion that it could take the sector more than four years to return to full recovery.

For the Nigerian aviation industry, it appeared as if the sector would never bounce back. More than one year after borders were re-opened and restrictions lifted, the aviation industry in Nigeria is showing signs of recovery even though the sector may not have fully recovered from the pandemic, airlines in the country are expanding, acquiring newer airplanes, and expanding their operations.

Never have Nigeria experienced the influx of new aircraft or the order of new airplanes than now; a period where one would have thought that it was impossible to do so going by how hard the sector was hit.

 

Air Peace’s Embraer 195-E2

The new narrative

Nigeria’s aviation industry’s face was changed for good when Arik Air brought in newer aircraft. That singular act was phenomenal as many airlines became envious of the carrier.

Liquidated Nigeria Airways was the last then to acquire brand new aircraft about 15 years ago but Air seems to have continued from where Arik stopped with the acquisition of brand new, fuel-efficient planes which have rekindled confidence in the country’s aviation sector.

After the devastating plane crashes involving Bellview’s Flight 210 on October 22, 2015, Sosoliso Airline’s DC-9 Flight 1145 on December 10, 2015, and subsequent crashes led to reforms in the country’s aviation sector.

These crashes spurred the Nigerian government to set a deadline of April 30th, 2007 for all airlines operating in the country to re-capitalize or be grounded, in an effort to ensure better services and safety.

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Policy formulation

The Nigerian government at the time formulated a policy that prohibited aircraft of over 22 years operating in the country’s airspace. Many other African nations took the same path.

The signing of the Cape Town Convention opened the floodgates of acquisition of newer airplanes by airlines as carriers are at liberty to lease aircraft.

The primary aim of the Convention and the Protocol is to resolve the problem of obtaining certain and opposable rights to high-value aviation assets, namely airframes, aircraft engines, and helicopters which, by their nature, have no fixed location.

This problem arises primarily from the fact that legal systems have different approaches to securities, title retention agreements, and lease agreements, which creates uncertainty for lending institutions regarding the efficacy of their rights.

This hampers the provision of financing for such aviation assets and increases the borrowing cost. This promotes the granting of credit for the acquisition of more modern and thus more fuel-efficient aircraft. Airlines also are more aware of right-sizing their fleet.

Ibom Air

Geriatric planes

Despite the fact that some aircraft are still operating aircraft that are over 24 years old, as exemplified by Dana Airlines that still operates the MD-83 aircraft and B737-300 among others, others still do.

Aero Contractors operates B737-400, 500, and the Q400.  Arik Air which faces liquidation for over N500b debts to AMCON in 2006 revolutionized the airline industry in Nigeria with several brand new A330, B737-700/800, A340 in what was a marketing gimmick, ‘Tear-Rubber’, a slang for new aircraft.

Others like United Nigeria Airlines Max Air and Azman are equally moving to newer airplanes because of ‘cheaper cost and efficiency of operating modern airplanes’ according to a spokesman of one of the carriers who spoke to Aviation Metric under a condition of anonymity.

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The source further noted that although there is nothing wrong with operating older aircraft, he explained that economic factors have made operators look into cutting costs by shifting to more expensive but efficient aircraft types.

Air Peace, described as the biggest airline in Nigeria started operations seven years ago with mainly B737-300/400/500.

The carrier quickly recognized the limits of these aircraft in terms of fuel efficiency migrated to brand new narrow-body Embraer aircraft.

 

Team Green Africa

Air Peace takes the leap

The airline in 2019 announced the acquisition of 30 Embraer 195-E2 aircraft, which included 13 firm orders and 17 purchase right orders from Embraer.

Three have been delivered to the carrier while Embraer promised to deliver others in the first quarter of 2022.

In 2019, the airline signed a firm agreement with Boeing to purchase 30 Boeing 737-MAX. The Chairman of the airline, Mr. Allen Onyema disclosed that the airline will maintain its orders.

The Dubai Air show was an eye-opener for many industry observers in West Africa as many other African airlines equally made significant aircraft order.

Ibom, Overland make firm orders

At the just concluded Dubai Air show, two Nigerian airlines, Ibom Air and Overland Airways made a huge statement with the giant steps they took to expand their operations. While Ibom Air, Nigeria’s fastest-growing airline inked a deal with European aircraft maker Airbus to buy 10 A220 jets, Overland made an order for six Embraer E175.

Overland announced a firm order for three new Embraer E175 regional jets, plus rights for the purchase of a further three.

Speaking at today’s Dubai Airshow, President and CEO of Overland Airways, Capt. Edward Boyo said,

 

Overland Airways

“We are confident that this is the right moment to invest, as regional aviation is on an optimistic post-pandemic recovery.

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Our customers will really enjoy all comfort in the E175, and we appreciate our partnership with Embraer.”

The aircraft will be delivered with a premium class cabin configuration and 88-seats from 2023.

Vice-president for Europe, the Middle East, and Africa at Embraer Commercial Aviation, Cesar Pereira, commented on the order,

“We are proud of this partnership with Overland and to support their regional expansion. We are seeing growing long-term demand for right-sized aircraft to deliver profitable domestic connections in Nigeria.”

The E175 is Embraer’s smallest of the E-jet family, and the only one not to have been reworked into the new technology E2 configuration. It’s proven to be a popular aircraft during the pandemic, offering incredible efficiency and the right sort of capacity for the depressed market size.

Expert’s view

An airline operator who preferred said by moving for a new fleet, the airlines in the sub-region are gearing up to maximise the gains of a growing intra-African market.

He added that by moving for a new fleet, the airlines in the sub-region are gearing up to maximise the gains of a growing intra-African market.

He also observed that it was a better move by Nigerian airlines to order and operate new aircraft and attain break-even payload, which makes economic sense than the current Boeing 737-300/500/800 series that they have been operating.

Arik Air

Last line                                               

According to the forecast, airlines in Africa will grow fleets by 3.6 percent per year to accommodate passenger traffic growth of 5.4 percent annually, the third-highest growth rate in the world.  In addition, African carriers are estimated to need 250 new wide-body aircraft, including passenger and cargo models, to support long-haul routes and air freight growth, Boeing said.

Wole Shadare

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