Naira devaluation: Airlines may skip aircraft routine maintenance

There are fears that some Nigerian domestic carriers may skip aircraft maintenance schedule due to high cost of checks, which are usually carried out overseas and paid for in foreign exchange.
This is because airlines will have to pay more for those checks owing to the devaluation of the Naira. For example, C-check of a Boeing B737, which is one of the regular aircraft that operates schedule service in Nigeria, cost about $500,000 (N75 million as at June last year).

With the devaluation of the Naira, the amount for the C-check will increase to N100 million and that is when the airline gives long notice and queues for the checks. But the maintenance cost could rise to $700, 000 (N140 million) if the airline ferries the aircraft to what is referred to as under pressure, whereby the airline without long notice takes the aircraft to a maintenance facility for the checks.
Industry experts have expressed concerns about imminent safety breaches should airlines succumb to the temptation to cut corners due to high cost of maintenance of their aircraft. They have therefore urged the Nigerian Civil Aviation Authority (NCAA) to ensure effective monitoring of aircraft routine checks to forestall air accidents.
Although NCAA has become stricter and is said to be monitor the airlines more closely, the International Civil Aviation Organsiation (ICAO) and the International Air Transport Association (IATA) posit that airlines have the responsibility to ensure the airworthiness of their fleet.
The acting Managing Director of the Nigerian Aviation Handling Company Plc., Mr. Nobert Bielderman has warned that NCAA “must particularly increase its oversight functions at this time and a good place to start from is to begin audits of domestic carriers to ascertain their financial wellness”, remarking that domestic carriers current debts are alarming and the regulator must assist them to be responsible.

“In Aviation, the domestic airlines would be worst hit because of current ticket prices are not in sync or responsive to current realities. This is due to unhealthy price wars and pursuit of market dominance at the domestic side of airline business. Domestic air tickets are still significantly low despite increase in airport charges, taxes etc. These domestic carriers still maintain their aircraft in USD (foreign currency) and aviation fuel has not significantly been reduced if at all,” Bielderman noted.

NCAA sources however said the regulatory authority would continue to do its job, but expressed worries that airlines may cut corner over time if the value of the Naira continues on the downward trend despite strict oversight functions of the NCAA.
“Airlines do not have financial model in which they arrange the funding of the maintenance schedule of their aircraft. They pay for maintenance as they generate revenue, but before you know it the schedule date for the maintenance of their aircraft would come and the airlines may not be ready. So it will take some time before the airlines will cut corners and that will become disastrous for the industry, but NCAA will not allow it to happen,” a source said.