Tuesday, July 17, 2012

Airlines gasp for life as cost of aircraft repairs hits N23 trillion written byWole Shadare (The Guardian)

Two airlines grounded, one halts operations
Passengers scramble for seats, outlook gloomy

IT is still not the best of times for Nigerian airlines as their fortune continues to nose-dive. Faced with a dearth of infrastructure and rising operational costs, some of the domestic carriers are scaling down their operations.

The worsening plight of most of the airlines, The Guardian learnt, is due to their huge expenditure on maintenance and repairs of their aircraft abroad.
At the last count, Nigeria reportedly lost N23.2 trillion ($150 billion) in capital flight through offshore aircraft repairs due to the non-availability of a functional national hangar in the country.

The absence of the vital equipment six years after the Presidential Task Force on Aviation Industry recommended to the Federal Government to initiate and hasten the completion of the National Hangar Project has been condemned by stakeholders.
The government, in spite of issuing a White Paper on the report and adopting the recommendation of the Presidential Task Force, is yet to lay the foundation-stone for the project.
The best the government has done since then is the release of a feasibility study on the project.
However, Nigerian air travellers are paying the price for the apparent non-committal of the government to the scheme as they now scramble for a fewer seats provided by the airlines still in operation.
At present, three airlines among the big carriers are down. The first is Air Nigeria, which was grounded by the Nigerian Civil Aviation Authority (NCAA)  a month ago. Chanchangi Airlines, once accounting for over 60 per cent air traffic in Nigeria, has stopped operations, albeit temporarily while Dana Air remains grounded following the June 3, 2012 crash involving one of its planes in Iju-Ishaga area of Lagos where 153 passengers aboard died and the suspension of its operation licence.
First Nation Airline, penultimate week took its three A320 aircraft to Europe for the mandatory checks thus leaving a few airlines on the country’s airspace.
The situation may get worse as The Guardian learnt that another carrier with its base in the North could be grounded soon over alleged insolvency.
Some aircraft maintenance engineers in separate interviews with The Guardian, claimed that lack of Maintenance Repair Overhaul (MRO) facilities had cost the operators and the government over $150 billion since the essence of the hangar project was highlighted over two decades ago.
It was learnt that a Comprehensive (C) Check on B737 classic and maintenance in Europe, the United States or in Cairo, Egypt, Addis Ababa, Ethiopia costs $1 million. For Next Gen aircraft such as the B737-700/800, the airlines pay $2 million for maintenance.
Before the current worrisome situation, there were about 16 airlines in Nigeria but now only Aero, Arik Air and IRS are the most visible in the sky.
Mr. Nick Fadugba, United Kingdom (UK)-based Chief Executive of African Aviation Services and former Secretary-General of African Airlines Association (AFRAA), lamented the government’s failure to actualise its plan to build the maintenance facility several years ago. He said if the project was executed Nigeria would have saved the country’s airlines from expending huge revenue on aircraft maintenance overseas.
He said half of the amount was used in ferrying the airplanes abroad, crew accommodation, allowances, over flier charges, landing and parking in the country of repair and other sundry charges.
The report of the Air Chief Marshal Paul Dike panel submitted to former President Olusegun Obasanjo in June 2006, recommended that the government should approve the use of the Nigerian Air Force hangars by interested private airlines, “pending the fruition of the national hangar project.” It proposed that the Nigerian Civil Aviation Authority (NCAA) should provide oversight functions. The government rejected this recommendation and directed the Ministry of Aviation to ensure the early completion of the project.
Obasanjo had on December 13, 2005 summoned an emergency stakeholders’ forum after three tragic aircraft accidents, which occurred within 40 days involving Bellview Airline in Lisa Village, Ogun State on October 22, 2005 where 117 people died; the Beechcraft mishap on November 28, 2005 in Kaduna, killing two persons and the Sosoliso Airline crash in Port Harcourt, Rivers State on December 10, 2005, which claimed 108 lives.
Members of the Dike team were Mr. Rowland Iyayi, Mr. Tunji Bolu, Mr. Tony Elumelu, Capt. Elendu Ukeje, Mr. Conrad Clifford, Alhaji Mohammed Sani Baba, Capt. Jonathan Ibrahim, Captain Augustin Okon, and Alhaji Rahman Shedu, who served as secretary.
Aircraft maintenance facilities in the country are limited, both in number and scope of services. The national hangar project is yet to be realized, while the few hangar facilities available belong to private airlines and offer only rudimentary services.
The Dike panel had linked the alleged cutting of corners by airlines to the prohibitive cost of aircraft maintenance overseas vis-à-vis the poor revenue base of the operators.
Dike also identified the non-availability of aircraft spares as another problem militating against aviation safety in Nigeria, noting that airlines complained of substantial revenue loses due to prolonged aircraft downtime.
The Airline Operators of Nigeria (AON) had also blamed the cumbersome custom clearance procedures as hindering the airlines from taking prompt delivery of spare parts for Aircraft on Ground (AOGs).
The body advocated a special aviation desk at the Customs to fast-track the clearance of spare parts.
Aviation expert, Olumide Ohunayo, said lack of coordination and opportunism by some operators and some state governors had made the hangar project unrealistic.
“What we have are small hangars that handle corporate jets and act as parking bays with the aim of generating un-taxable revenue. The other hangars owned by operators have limitation in maintenance, which may not go beyond a B- check.”
With the interim exit of three airlines, air traffic has been concentrated on Aero and Arik for the popular triangle route of Lagos, Abuja and Port Harcourt. Carriers like Overland and Associated Airlines and others with smaller aircraft service the Akure, Ibadan, Minna, Gombe routes.
Arik and Aero have been finding it difficult to cope with the huge passenger traffic.
Since Friday last week, passengers have facing problems getting seats on board aircraft owned by the two airlines.
Consequently, the fare for the economy class has risen to between N30,000 and N35,000 at peak period.
An airline operator confirmed that his outfit was finding it difficult to cope with capacity, particularly on the Abuja, Port Harcourt route.
Ohunayo said the regulatory and voluntary grounding of some airlines had “reduced seats drastically and enplanement after the Dana crash.”
“The regulatory and voluntary grounding of some airlines has led to the reduction of seats drastically following the crash of Dana. Sadly, the operators have capitalised on this with phenomenal fare increase on routes and annoyingly, loading 60 per cent of the fare on aviation fuel surcharge which naturally fleece passengers and government agencies”.
http://www.ngrguardiannews.com/index.php?option=com_content&view=article&id=92549:airlines-gasp-for-life-as-cost-of-aircraft-repairs-hits-n23-trillion-&catid=1:national&Itemid=559

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