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FX scarcity: 40% of domestic aircraft on ground

By on February 28, 2017

The volume of aircraft on ground (AOCs) has increased in recent times due to difficulty being faced by airlines in accessing foreign exchange, Daily Trust checks have shown.

Findings show that more than 40 per cent of aircraft belonging to domestic carriers are currently on ground.

The dollar shortage in the economy has adversely affected maintenance programmes of the airlines with many airlines having to either ground or abandon their aircraft that are due for maintenance.

An aircraft is usually due for maintenance after about 18 months of nonstop operation but unavailability of foreign exchange has stymied the capacity of their owners to send them for routine maintenance.

Checks at the Murtala Mohammed International Airport (MMIA) tarmac showed many aircraft on ground.

Though the number of AOCs could not be ascertained by this reporter, Arik Air has the largest number followed by Aero Contractors.

Arik which was recently taken over by the Federal Government through the Assets Management Corporation of Nigeria (AMCON) penultimate week used to have 30 aircraft in its fleet but the number had shrunk to nine, according to its new owners.

This explains why the airline had to suspend its London and Johannesburg operations.

Our correspondent also recently counted more than 10 aircraft belonging to Aero that are currently on ground at the old MMA terminal.

It was confirmed that the aircraft were grounded because of inability to carry out due maintenance.

A source said another airline (name withheld) currently operates with one aircraft only contrary to the stipulation of the Nigeria Civil Aviation Authority (NCAA) which mandates local carrier to have minimum of three aircraft to operate scheduled commercial flight.

Spokesman of NCAA, Mr. Sam Adurogboye in response to Daily Trust enquiry was silent on the actual number of aircraft on ground.

However major international airports in Nigeria are still littered with many aircraft currently grounded.

Our findings showed that Nigeria, with over 400 aircraft operating scheduled local and international flights does not have a single Maintenance, Repair and Overhaul (MRO) facility despite assurances by previous governments.

Experts say insincerity on the part of successive governments had stalled the setting up of an MRO facility in the country as many investors had shown interest in establishing one in the past but were frustrated by bureaucratic bottleneck.

It is estimated that a viable MRO facility in Nigeria would save the country over N10bn annually and reduce the hassles associated with sourcing for forex.

Daily Trust reports that the cost of maintaining a Boeing 737 Aircraft series goes for between USD$1m to USD$1.5m. An airline operator who confirmed this to Daily Trust said aircraft that have been on ground for a long time would cost as much as 2m to $2.5m to maintain.

An expert, Capt. Ibrahim Yunusa Kazaure said, “Yes there is dollar scarcity. To maintain aircraft costs a lot of money. The spares both rotables and consumables are mostly bought in dollars, aircraft leases are paid in dollars too, plus other maintenance reserves for engines, landing gear, APU, etc.”

Group Capt. John Ojikutu said the development portended danger for domestic carriers. He lamented that the Federal Government has no policy in place to sustain domestic airlines which explains why a big nation like Nigeria does not have an MRO.

Managing Director of Med-View Airline, Alhaji Muneer Bankole sometime last year lamented how he sourced for dollars at 470/$1 to maintain one of its aircraft.

Meanwhile, the Nigerian Civil Aviation Authority (NCAA) has blamed the high mortality rate of airlines in the country on lack of sound corporate governance by the operators.

Airline operators of Nigeria (AON) had enumerated about 15 different charges imposed on them which eat into their profit margin and strangulate them, saying unless the charges are reviewed, more airlines may go under.

However the regulatory authority insists charges and levies are normal worldwide, stressing that those airlines which failed along the line were not floated on a sound corporate governance.

General Manager, Public Affairs, Mr. Sam Adurogboye who spoke with newsmen at the weekend revealed that over 140 airlines exited the NCAA register from 2000 till date.

Adurogboye also clarified that the five per cent ticket sales charge was not a levy on airlines but passengers while the airlines only collect the five per cent on behalf of the aviation parastatals.

“There is no country where there are no charges, whether landing, parking, overflying, amongst others. There are some charges that we are not charging in Nigeria, such as hotel, task, tourism development”, he said.

Adurogboye said airlines were folding up because the regulatory authority was up and doing in discharging its duties.

 

 

[DailyTrust]