Thursday, July 23, 2015

Heavy maintenance fees stifle domestic airlines

The dearth of aircraft repair facilities in Nigeria is biting harder as domestic airlines which typically spend about 40 percent of their operational funds on airplane maintenance abroad are hard pressed, with the naira’s sharp depreciation against the US dollar in recent months.
This follows the marked decline in the global price of crude oil, Nigeria’s main export, from over $100 to about $50 per barrel, on account of a glut in the market.
Following this development, domestic airlines expenditure on maintenance is shooting even higher.
Aviation experts and operators had called for the establishment of functional aircraft Maintenance, Repair and Overhaul (MRO) facilities, otherwise known as ‘hangars’ over the years, to cut down on the cost and time of airplane repairs.
Experts say other operational costs are stifling the country’s domestic airlines, such that they can ill-afford to acquire hangars on their own .
“Unfortunately, only Arik and Aero have maintenance hangars in their bases in Nigeria. That is not to say they are in anyway different from others, because Arik Air is in partnership with Lufthansa, where they pay heavily. Also, Aero can’t go beyond C checks.
“Other airlines can only carry out ‘line checks’ at the airsides. Even though airlines are no longer required to pay duty on parts imported into Nigeria, the manufacturers directives on aircraft maintenance have to be strictly adhered to.airline-maintenance
“This is because international safety standards have to be met, but Nigerian airlines find it very expensive”, an operator said.
Experts say that maintenance of airplanes here in the Nigeria would cost the airlines less than half of the present sums of ferrying them abroad for repairs in Europe, the United States, Asia, Ethiopia, Kenya, Egypt and South Africa, which are the usual repair destinations.
Some are also advocating for a Public Private Partnership on the project.
The Akwa Ibom State Government is on the verge of completing an aircraft maintenance facility at the Uyo Airport, but the Federal Government is yet to adopt or certify it.
Sheri Kyari, managing director of Finum Aviation, had at the Second Memorial Lecture in honour of Zakari Haruna, the pioneer director-general of the Nigerian Civil Aviation Authority (NCAA) disclosed that private investors would have undertaken to build aircraft maintenance hangars in the country, but for the fear of policy inconsistency, which had made them hold back.
Kyari urged government to provide guarantee and assurances to investors, either by getting involved or providing a conducive environment for them.
Apart from linking various deadly crashes in the country to lack of adequate maintenance, aircraft engineers say the country may have lost over $170 billion in the last ten years to capital flight, as they say about ten domestic airlines could be losing N50 billion annually.
The carriers are groaning under the weight of industry charges ranging from 5 percent ticket sales; landing and parking fees; navigational charges; port charges and fuel surcharge among others.
They also pay heavily to source for Aviation fuel which is sometimes not readily available because local refineries are not working.
“They have in the last few years been burdened by debt of over N130 billion with a bail-out of over N200 billion from government, a greater part of their funds are expended on maintenance, then fuel.
“One eventually finds the airlines moving around the same spot and then going comatose after sometime because major issues are left unresolved.
“A deliberate plan by government in this direction to save the sector by establishing a national hangar that will comprise compartments where various aircraft types can be checked will go a long way in stabilising the sector”, Dave Adedoja, a travel analyst said.
Maintenance checks on aircraft range from A, B, C and D Checks, which are done periodically.
An aircraft is subject to C check every 15 to 18 months. This type of aircraft maintenance is a comprehensive inspection that covers hidden parts so that any damage or cracks in the internal parts of the aircraft can be detected.
The most detailed inspection is the D Check. This inspection is generally an overhaul.
Experts say it could cost between $1 million to $2 million to carry out a C-check on an aircraft, depending on the type.
They say comprehensive (C) Check on B737 classic and maintenance in Europe, the United States or in Egypt or Ethiopia, costs $1m.
At present, Nigerian airlines carry out C and D Checks abroad in millions of dollars, periodically.
Source:businessdayonline.com

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