Making Nigeria Aircraft Maintenance Hub

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Aircraft Maintenance Hub

Chinedu Eze urges the federal government to consider indigenous operators in its quest to set up a maintenance, repair and overhaul facility in Nigeria

The federal government recently notified members of the public in an advertorial that it intends to establish maintenance, repair and overhaul facility in Nigeria.

The government in the advertorial stated that it had identified the need for the establishment of such maintenance facility.

“The Federal Government of Nigeria (FGN) through the Federal Ministry of Transportation (Aviation) has identified the need for the establishment of Maintenance, Repairs and Overhaul (MRO) Facility in Nigeria, as currently there is none in the West and Central African regions.

“The availability of this facility would help to achieve the following objectives: establish the first MRO facility in West and Central Africa that will address the demand in the region; optimize foreign exchange expenses for major aircraft maintenance; generate more employment opportunities for Nigerians and Nigerian companies; enhance knowledge and technology transfer and support aviation value chain contribution to Gross Domestic Product (GDP) growth,” the government stated.

The ministry noted that due to the sizeable investment and technical expertise required in setting up the MRO facility, the FGN was exploring the possibility of entering into a Public-Private Partnership (PPP) via a Build-Operate-Transfer (BOT) model, whereby a private sector partner will develop and operate the MRO Centre while the government provides the required support to facilitate its establishment.

The proposed MRO will have the capacity to serve both Narrow Body (Jet and Turbo Prop) and Wide Body aircraft maintenance requirements and may be located at either the Nnamdi Azikiwe International Airport, Abuja or Murtala Mohammed International Airport (MMIA), Lagos,” the notice also said.

Forex Revenue

Nigeria could save more than N2 billion annually if the country has well equipped MRO, according to industry experts.

Presently all scheduled commercial airlines conduct their major maintenance checks overseas and spend huge amount of money on foreign exchange but substantial amount of this money could be saved, jobs created and foreign exchange saved if Nigeria has a major maintenance facility the industry experts said.

Overseas aircraft maintenance, purchase of spares, aircraft leasing, simulator training and others contribute significantly to the demand pressure on the value of the naira.

So government would save billions of naira if it established a comprehensive maintenance facility in Nigeria.
One of the operators recently told THISDAY that it costs his airline between $500, 000 to $800, 000 to maintain one engine of a Boeing B737 aircraft, noting that this could cost less if it were done locally and would also fetch about 30 per cent discount.

“If we do the maintenance here about 30 per cent of the cost would be slashed and that gives you 30 per cent discount. This is for a comprehensive MRO that has complement of good workshop and this would also save the country foreign exchange.

“But such project needs heavy capital outlay to set up and it takes some time before it will begin to yield profits. So most MROs require some grants to take off. They provide long term profit but they require heavy investment to start off,” he said.

So with government behind such plan the project would weather such financial challenges; although government made it clear that the MRO project would be fully private sector driven.

At the inception of Senator Hadi Sirika as the Minister of State, Aviation, he had said that the Buhari-led administration was going to transform the aviation industry and pointed out that MRO was critical to achieve such feat.

“The present administration is focusing on issues that will rapidly develop the aviation industry within the shortest possible time. These issues include aviation safety and security, infrastructural development, the establishment of a national carrier, lack of a world-class aircraft maintenance, repair and overhaul, (MRO) facility in the country,” he had said.

Scepticism
But many Nigerians who witnessed the efforts made last year for the establishment of a national carrier which was later suspended indefinitely, are of the view that if government travelled the same lane with this MRO project it would end up as stillborn.

The major problem with the national carrier project, they posited, was that government spearheaded it without carrying the potential investors along; it provided the funds and carried on as if it was its own project, so they alleged that such method was putting the cart before the horse.

According to those that spoke with THISDAY, government should have involved the investors from the beginning; especially as the Infrastructure Concession Regulatory Commission (ICRC) made it known that its support for the project was because it would be private sector driven.

THISDAY learnt that industry analysts and insiders are still astounded that the Minister, Senator Sirika did not incorporate Aero Contractors and Arik Air which are substantially owned by government through Asset Management Corporation of Nigeria (AMCON) in its plan for a national carrier, saying that their business ideology was different from the new airline his government wanted to set up. Until the planned airline was suspended it did not have office, personnel or facilities that would indicate that a national airline was to be established.

Industry experts were also of the view that by side-lining the two airlines where government has significant stakes to form a background for the establishment of a national airline, the project lacked foundation and that was one of the reasons it failed because even investors interested in the project could not locate any facility identified with the planned carrier.

Aero Contractors
Today, Aero Contractors has established an aircraft maintenance facility and industry experts are of the view that if government intends to establish a national maintenance facility it ought to incorporate Aero Maintenance facility, which would form the fulcrum for the establishment of a new company by government.
Aero has technical personnel that would form the nucleus of the new MRO, it also has engineers who are now training to take over from the current staff that would retire in the near future. So the airline has made strong plan in its MRO division, looking at the future.

The CEO of Aero Contractors, Captain Ado Sanusi, had told THISDAY that countries in West and Central Africa were partnering with the airline for the maintenance of aircraft registered in their countries.

Aero conducts maintenance checks on Boeing 737 Classic, Bombardier Q300 and Q400 and other aircraft types.
Ghana, which has certified Aero Maintenance to conduct checks on aircraft registered in the country last year is about to renew the certification this April. Also Democratic Republic of Congo is also auditing the maintenance facility so that it would certify it to maintain aircraft in the Central African country. Nigerian airlines have already started patronising the facility and it is conducting major checks for two of the indigenous operators.

Strategy Review

Former Managing Director of Capital Airline and currently the lead consultant of ETIMFRI Group, Amos Akpan said Nigerian aviation sector needs a functional MRO that aircraft operators would patronize.

“Currently Aero contractors facilities is the most patronized AMO in West Africa. Airlines in Nigeria, Coted’Ivoire, and Ghana maintain their aircraft in Aero facility. Arik Air has facilities that should be developed. What government should do is to provide support and enabling environment to grow these facilities to world-class standards. We need to review our strategy. The investors that set up businesses in the industry would like to grow their businesses as the industry grows. Therefore, we should move from proposals into the stage of execution of workable ideas using what we have as launching pads.

“We need to invest in the training infrastructure for maintenance personnel at the Nigerian College of Aviation Technology (NCAT), Zaria. The maintenance organizations will need continuously trained technicians. The maintenance organizations will need access to foreign currency to work with manufacturers and distributors of aircraft spare parts. By their initiatives or inputs, investors have made clear what government should do. Government should partner with the private sector to set up and sustain world class maintenance facilities,” Akpan said.

Commending on Aero’s success, the Director General of the Nigerian Civil Aviation Authority (NCAA), Captain Muhtar Usman said that the maintenance facility was an offshoot of the President Muhammadu Buhari’ administration’s vision in the aviation sector, noting that no one would have dreamt of such a feat few years ago.

“Well, I am happy, this is one of the focal programmes of this administration, the establishment of an MRO. And the obvious advantages are one: saving foreign exchange, two: ability to get foreign exchange into the country because others will come and do their maintenance here. Three: it will give employment for Nigerians, four: it will encourage skills acquisition and also technology; five, it gives us the ability to monitor closely the airworthiness status of our aircraft. And it saves the operator the cost of having to fly his aircraft out, even the cost of positioning the aircraft back, the cost of maintaining his staff while the aircraft under maintenance out there. All these will be saved by the operator, so it is a very, very positive development in this direction,” Usman said.

On the establishment of MRO by the federal government, the Director General said that it would be good and noted that even if it was established independent of Aero it would give vent to competition.
“I am sure government believes in healthy competition. The more you have the more you have healthy choices and also when you talk of unit cost it drops based on competition availability. So, I wouldn’t go as far as saying that government will adopt because it is not within me to whether the government will adopt whatever Aero has. Consistently the government has said they will assist in setting up a major MRO and foe the reasons I mentioned earlier. However the government said it is going to be transparent and it is going to be private sector driving,” he said.

For federal government will succeed in its MRO if it incorporates indigenous efforts; unlike the failed experiment of national carrier.

Reacting to government’s plan to establish MRO, the Director General of the Nigerian Civil Aviation Authority (NCAA), Captain Muhtar Usman said government has