Aviation: FG Receives Certificate of Compliance for Leasing Company, Maintenance Repairs Overhaul

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Kasim Sumaina in Abuja
The federal government Monday received the Outline Business Case (OBC) Certificate 5 for the Aviation Leasing Company (ALC) and the Maintenance, Repairs and Overhaul (MRO).

The acting Director General, Infrastructure Concession Regulatory Commission (ICRC), Chidi Izua, while presenting the certificate to the Minister of State for Aviation, Hadi Sirika, on behalf of the government, noted that the aviation industry is a highly regulated industry and its international nature makes it mandatory to observe set-standards and adhere to regulations as required by global industry regulators: ICAO and IATA.

Izua hinted that, the MRO is the most important link in the aviation value chain as the major consideration in the industry was safety. “Considering the importance of the MRO, it is incomprehensible that none exist in the West African region, 98 years after the first aircraft landed in the country in (1920).”

According to him, “The lack of an MRO has had a negative impact on the survival of airlines in the country as airlines have struggled to maintain their fleet or stay in business for consistently long periods as seen in other climes, due to the exorbitant cost of maintenance that isn’t available locally and the time it takes to fly the aircraft for checks.”
He said: “Our review of the CBC presented a compelling case for the establishment of an MRO in Nigeria as the demand forecast study undertaken presented an assurance of a market that remains underserved locally, as more than half of the US3 billion annual expenditure by African airlines on maintenance is taken outside the continent.”

The ICRC DG explained that Aviation Leasing Company is estimated that about 70% of commercial aircraft in Nigeria are leased and 50% of the fleet globally.
“Despite the obvious market for aircraft leases, the West Africa region does not have a single Aviation Leasing Company and relies solely on leasing companies in Europe, North America and Asia for aircrafts.”

Speaking further, he stressed that, “Nigeria is grossly underserved in the provision of aircrafts, with only 48 functional aircrafts operated by 8 airlines serving a population of over 180 million people with over 30 airports. This low number of aircrafts is not unconnected with the challenges of securing favourable leases.
“The OBC has justified the establishment of the ALC through a Joint Venture arrangement as the preferred PPP option. The review further presents a bankable and viable project that is expected to make profit from the first year of operation and sustain a positive growth projection.”

We thank you for your commitment and single-minded drive in ensuring the provision of Aviation infrastructure and the establishment of Aviation service providers in the country. We appreciate your continual insistence on due process and adherence to the guidelines and processes of the ICRC.”

Continuing, he said: “We commend you for the great strides achieved during your brief tenure, that includes; Repair of the Abuja Airport Runway in record time, provision of Aerodrome Certification for Lagos and Abuja Airports and efforts to obtain same for Port Harcourt, Kano, Enugu and Kaduna and the efforts at attracting private sector finance and expertise into the Aviation sector through the 6 key projects identified for concession through PPPs, to ensure implementation and sustainability.”
Reassuring the Minister, Izua said: “It is our utmost desire to support and identify with the laudable initiatives you have initiated in the Aviation sector since your assumption of office less than 3 years ago.

“We have supported you through our active membership of the PSC, PDT and our capacity building measures to some of your agencies. Where necessary sir, we have engaged with you directly to ensure that we get this critical stage of project development right.

“It is my pleasure on behalf of the ICRC to present to you the CBC compliance certificates for the ALC and MRO that will enable you proceed to the procurement stage based on steps we have enumerated in our forwarding letters. Congratulations sir,” he concluded.

Responding on behalf of the Federal Government, the Minister of State for Aviation, Hadi Sirika, said, “We are conscious of the challenges in the aviation sector.
According to him, “When I was made a minister, from day one, I knew that I was going to go into partnership with the private sector.
“Most of the airlines in Nigeria have been faced with the challenges of funding. 52 airlines have come and gone due to funding challenges and to have these leasing companies which will provide these services will boost the operations airlines in Nigeria,” Sirika noted.