…as major airlines out-price Nigerian airlines in the lease market
Officials say delays in aircraft deliveries from major manufacturers Airbus and Boeing could further worsen Nigeria’s current aircraft shortage.
Boeing and Airbus are struggling to meet delivery targets amid supply chain challenges. An ongoing strike at Boeing Co. has raised concerns that the U.S. plane maker’s delays will worsen amid a broader crisis over its safety reputation.
In addition, wars in the Middle East and Ukraine pose a threat to aircraft supplies, as missiles launched must be replaced by companies that manufacture aircraft parts.
International Airlines Group CEO Willie Walsh called the delays in aircraft deliveries “extremely frustrating” and said the situation had not yet improved.
Several of Europe’s biggest airlines lamented the resulting capacity constraints at a conference in Brussels, with Ryanair saying it would have to revise down its passenger forecast for next year because of delays.
Sources told Business Day that the situation is exacerbated in Nigeria by high insurance premiums and a shortage of dollars, making it much more expensive for the country’s airlines to buy and maintain aircraft.
“For Nigerian airlines, there is no relief in sight and things will get worse,” an air charter business owner, who did not want to be named, told Business Day.
“Without deliveries from Boeing and overburdened Airbus, major European and American airlines would now pursue limited lease options and out-price Nigerian airlines, which typically trade on the lease market. ”, the company added.
Few planes have had to feed more than one passenger on domestic flights in recent months, as Nigerian airlines struggle to cut fleets due to high maintenance costs.
The airline that sent the aircraft for maintenance is unable to return it due to a lack of foreign currency.
Other companies have been forced to ground their aircraft by the Nigerian Civil Aviation Authority (NCAA) as they are unable to send their aircraft for maintenance, according to a Business Day check.
In addition, the grounding of Dana Air, a relatively low-cost carrier with six aircraft, also affected aircraft operating domestic routes.
Sources close to the NCAA told Business Day that more than half of the NCAA’s 91 aircraft, excluding the grounded Dana Airlines, are in maintenance, putting stress on the few operating aircraft. Currently, the number of aircraft operated by all scheduled airlines is less than 40.
Industry expert and CEO of Centurion Aviation Security and Safety Consult, John Ojikutu, says the global aircraft supply crisis will impact access to aircraft for Nigerian airlines. But he said local airlines need to stay in the country and integrate into local operations to cut costs and ease burdens. Impact of the current crisis.
He pointed out that the government should limit each foreign airline to either Lagos or Abuja, so that domestic airlines would suffer big losses even if they do not enter international routes to compete with legacy airlines. He emphasized that there is no.
He added: “Domestic airlines cannot currently compete with foreign airlines on the International Bilateral Air Services Agreement (BASA) routes without the full support of the government as the national flag carrier.” added.
A few days ago, the Minister of Aviation and Aerospace Development, Festus Keyamo, announced that Nigeria had been removed from the global watch list after the country’s global aviation rating increased to 75.5 percent.
Keyamo hinted that new developments would allow airlines to use dry lease aircraft.
The minister assured that more aircraft would soon be deployed to Nigeria.
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Ibom Air chief operating officer George Ulisi told Business Day that the minister had addressed the underlying issues that are making it difficult for Nigerian Airlines to access leased aircraft.
Mr. Uriesi said the minister is also working on speedy recovery of aircraft in the event of default and on insurance restrictions that affect the willingness of international lenders to lease aircraft to Nigerian players. He said he is working on it.
The minister said he was also defending the issue of access to foreign exchange.
“All three key elements need to be resolved to pave the way for easier access to aircraft dry leasing from the international lessor community,” he said.
However, Mr. Uriesi pointed out that these important measures alone are still not enough to provide dry lease aircraft to local airlines, rather they have only opened the door wide for discussion to take place.
“There are still several miles to go on the road to a successful aircraft dry leasing business, and once the Minister’s work is complete, the ball will now be set for actually lobbying and securing leases from lenders for local airlines. It will be placed in the company’s court.
“As the saying goes, this is where rubber meets tar,” Ibom Air’s chief operating officer told Business Day.
A former captain of a Nigerian airline, who declined to be named, said a supply chain crisis by aircraft manufacturers could mean that Nigerian airlines could only use older aircraft instead of brand new ones.
“The global supply crisis will have an impact here in Nigeria as well,” the former captain said.
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Olumide Ofunayo, industry analyst and research director at Zenith Travels, told Business Day that Nigerian airlines use fairly old aircraft due to lease costs.
“The main issue for us is not a lack of aircraft to lease, but whether we can earn enough foreign exchange to continue to lease and finance them. The exchange rate is not improving. It’s at an all-time high. 1,700 Nera per dollar, which is the highest amount ever.
“Airlines make their profits in naira, not dollars. Are their profits commensurate with the exchange rate? Are there many people flying? As exchange rates and fuel costs rise, so does inflation. . It’s affecting the flying population,” Ounayo said.
