Preview: Investment In Aircraft, Concession, Others’ll Shape Aviation In 2022

 The year 2022 would be very exciting for aviation in Nigeria with expected massive investments in airlines, aerodromes, and other critical areas. It is a defining year for aviation in the country, writes, WOLE SHADARE

Turbulence

The year 2021 came with a lot of troubles for the airlines and they would likely encounter more turbulence in 2022 as international travel restrictions and the ongoing pandemic continue to impact demand.

For the aviation industry in Nigeria, domestic air travel would return back to what it was pre-Yuletide and one that grew significantly, no thanks to the insecurity that led to an increase in domestic travel.

Time for aircraft delivery

The carriers could begin to see their multi-billion naira aircraft acquisition projects begin to take shape in terms of delivery and new leases that would help them to bolster their operations.

Nigeria’s fastest-growing airline, Ibom Air had in November last year inked a deal with European aircraft maker Airbus to buy 10 A220 jets. 

It is also an indication of the plan by the carrier to be a dominant carrier in Nigeria, West, and Central Africa as Ibom

 

Neither Airbus nor Ibom Air had disclosed the cost of the ten aircraft order, there are indications that the Akwa Ibom State-backed airline could be spending over $915 million for the ten brand new A220.

Two of the A220-300 airplanes would be delivered to the airline first quarter of 2023, while all the ten aircraft would be delivered in 2024.

The two A220 wet-leased from Egypt Air would be returned to the North African country at the expiration of the lease agreement in June 2022.

Ibom Air would also dry-lease two aircraft to quickly replace the two that would be returned back to Egypt Air next year June and operate them till the first two out of the ten Airbus planes are delivered in 2023.

At the same Dubai Airshow, Overland Airways placed orders for three new E175 E-Jets, plus three purchase right aircraft worth $299.4 million at list price with all options exercised.

Deliveries are planned to begin in 2023. The new aircraft, the airline’s first jets, will be deployed to increase scheduled flights on domestic routes and to expand its regional network.

On the other hand, Nigerian start-up carrier Green Africa Airways is aiming to increase its fleet of ATR turboprops to as many as 15 aircraft in 2022.

Air Peace took delivery of its fifth Embraer 196-E2 aircraft. The fifth Embraer 196-E2 aircraft is among the 13 ordered from the Brazilian aerospace conglomerate, Embraer, in 2019. Eight planes remain to be delivered by 2022.

Unprecedented aircraft leases

It is yet unknown how many of the airlines’ airplanes would be returning from maintenance and repair facilities overseas as there are indications that many of the aircraft had been abandoned because of the high cost of bringing them back to service; a decision that saw to a high number of aircraft leases.

Some stakeholders have described it as unprecedented in recent times, arguing that the trend would continue into the New Year because of the serious dearth of aircraft by operators which is further made worse by the fact that virtually all the carriers put together have less than 70 airplanes.

Virtually all the carriers invested heavily in lease airplanes, especially towards the Yuletide. The trend would continue because of how small they are. The carriers would make further massive investments running into billions of Naira in that area this year

The Year 2022 would equally see to the coming to fruition of airport concession project that was started a few years ago but one that got to top gear in 2021.

Investors jostle to invest in Nigerian airports

The Federal Government had been working on the concession of the Murtala Muhammed Airport, Lagos, Nnamdi Azikiwe International Airport, Abuja, Port-Harcourt International Airport, Port-Harcourt, and the Mallam Aminu Kano International Airport, Kano. The concession of the four aerodromes had reached an advanced stage.

The country is expected to benefit massively from this as many would-be investors are already jostling to win as preferred bidders for four of the most lucrative aerodromes in the country.

 

Bids have been tabled while the processes are expected to be completed before the middle of this year. Bids were opened to all credible local and international investors who are expected to bring in a lot of money to invest in decrepit airport infrastructure like the embarrassing Murtala Muhammed International Airport terminal that has outlived its usefulness.

The terminal was said to have been built for less than 400, 000 passengers in 1976 but today processes more than seven million international passengers. Not only is the terminal too small, but it has also become obsolete and needs urgent replacement or infrastructure upgrade to meet the modern way of passenger facilitation.

The same thing is needed for the Abuja airport and particularly the Mallam Aminu Kano (MAKIA) Airport that is crying for an urgent upgrade. Airports are the first contact foreigners have with countries. Most times the beauty or otherwise of airports reflects how beautiful a country would be.

New airlines set to debut

In the next couple of days, Nigerians would be alert to the establishment of a national airline, Air Nigeria. It is a do-it-or-forget year as it concerns the much-talked-about national carrier because this is the year left for the Minister of Aviation, Hadi Sirika to serve the meal that has been on fire since 2018.

Sirika had in November 2021 while announcing that the airline would come to life in April 2022 disclosed that government would hold a 5% stake, Nigerian entrepreneurs holding 46% while the remaining 49% will be reserved for yet to be assigned strategic equity partners, including foreign investors.

Should the government stick to this, there could be massive injection funds into the proposed carrier that could in turn lead to massive job creation for the Nigerian people.

To show the seriousness of floating a national carrier, there are indications that Nigeria may have picked Egypt Air consortium and Ethiopian Airlines to set up an aviation leasing company as part of a government plan to overhaul the country’s aviation sector.

Sirika recently explained that any airline that will operate at that level must be such that would support the national economy with $450 million GDP for 200million people and must be equipped to compete favourably.

Also of importance is the desire by the Assets Management Corporation of Nigeria (AMCON) to set up Nigerian Eagle Airline to replace Arik Air which has been under its receivership since 2018. Aside from the AMCON backed Nigeria Eagle, the year would see the establishment of new airlines. Three are already on the verge of being awarded the all-important  Air Operators Certificates (AOC) as early as this month to commence services.

The new carriers are expected to widen passengers’ choices, give other established carriers a run for their money by being competitive and be customer-oriented.

Last line

The New Year looks interesting and very tricky for investors who are ready to take the risks to put their money where their mouth is. It is also a year that many people look up to the Federal Government and the Minister of Aviation to live up to their promise of delivering key projects that would leave indelible marks on the aviation sector. Overall, the sector looks promising bearing no travel restrictions occasioned by the outbreak of new COVID-19 variants

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