As the country grapples with capital flight in most sectors of the economy, aviation experts in Nigeria have criticised the federal government for failing to do anything to prevent capital flight by setting up a functional Maintenance, Repair and Overhaul (MRO) in the country.
If that was done, they believe indigenous airlines in the country would not be spending the huge amount of money they do for offshore maintenance of aircraft continue unabated. Airline in Nigeria have continued to suffer under the heavy cost of embarking on these maintenances just as the sector plummets progressively.
It would be recalled that about six years ago, when the administration of President Muhammadu Buhari came to power, the Aviation Minister, Senator Hadi Sirika, as part of his six-points agenda, promised to establish an MRO in the country to help save money home and strengthen the operations of the airline, nothing is on ground yet to show that one would take off soon.
As the airlines continue to groan under harsh operating environment, experts say they lose about N23 billion annually to aircraft maintenance overseas. It is even a fraction of the cumulative cost of maintenance, premium insurance, spare parts, and other services airlines procure overseas, including salaries of expatriates.
At least, 70 aircraft are flown by eight scheduled operators in the country at the moment.
Also, the Nigeria Civil Aviation Authority (NCAA) has imposed a calendar limit for a C- Check at every 18 months. Engr. Lookman Animashaun, a former president of Aviation Grand Union Alliance (AUGA) and an Engineer with defunct Nigeria Airways, who spoke on the matter noted that without MRO facilities in Nigeria, capital flight would continue to thrive.
Sirika had mentioned A J Walters Aviation Limited, EgyptAir Maintenance & Engineering (EGME), and Glovesly Pro-Project Limited as the preferred bidders to drive his agenda of establishing an MRO facility in the country.
The Minister also promised that the MRO facility would be sited at the Nnamdi Azikiwe International Airport, Abuja, and would be run by a Public-Private Partnership (PPP) using the build, operate, and transfer model.
But experts are of the opinion that successive Ministers of aviation up until now, had been playing politics with such an important aspect of airline business, adding that now is the best time to have the facility in the country.
“Nigeria doesn’t have an MRO now because we are not serious about having it. Most of the things they are doing is politics and they are telling people what they want to hear at a particular time. Honestly, I must tell you that we are playing to the gallery. If truly we are serious as a nation, we should have gotten MRO now. We should have built on what we had in Nigeria Airways then, rather than liquidating it don’t let us talk about the liquidation of Nigeria Airways anymore.
“But, I must tell you that without sustainable MRO in the country, the industry will continue to experience capital flight and what we are experiencing now, which is the moment the aircraft is due for heavy maintenance, it will be taken out, there is no foreign exchange to carry out the maintenance, the aircraft will remain there and the next we are going to hear about the aircraft is that it can’t be sent to Nigeria. That is one of the reasons we are having low capacity in the industry as at today”, Animashaun said.
While speaking of huge capital out of the country, he said, he outlined a calculation thus: The minimum you can do a C-check now for any airline is $1million; there are some C-checks that can even go as high as $2 million, depending on the way and manner the aircraft is maintained. Let’s keep to the minimum of $1m.
“Let’s say on the average, each airline has three aircraft, the number of aircraft scheduled airlines we have, multiple it by $1million, by the time you do that, you will realise that we are losing about $300 million as capital flight annually. If you have an MRO in Nigeria, that will remain in the country. Without a sustainable MRO and the government looking at it, we will continue to be in a quagmire as we are having right away”, he added. Also speaking on the matter, Grp. Capt. John Ojikutu (retd), a former commandant of Lagos airport and Chairman of Centurion Aviation, noted that MRO facilities has been in the programmes of government since the 80s but its policies and instabilities had hindered the establishment.
He cautioned that government must hand over some programmes to the private sector in order for them to come to executed.
“Building aircraft maintenance depot has been on the government programmes as far back as the 80s, but for the instabilities of governments and its policies, the project remains in the tunnel and never to see the day lights as long as it remains with the government administrators.
He noted that what is obtains in the commercial aviation sector globally today is public private partnership, adding that government cannot regulate and still be sole operator of aircraft and maintenance at any level.
“The delay in getting an MRO set up in the country can only be either there is no clear understanding among those responsible for policy administration in government or between them and those in the private partnership.
“Government cannot be thinking of concession of a part of commercial aviation and still want to keep another; again, you cannot be a regulator of the industry and still be sole operator; either it excises itself from the ventures or be minority shareholder of not more than 20 percent; foreign technical and financial investors 30 percent; credible Nigerian investors 30 percent and the balance of the 20 percent for the Nigerian public.
“Cost of aircraft offshore maintenance is and has always been exorbitant. It ranged between $500,000 to $2m depending on the required level of maintenance. If you imagine about 50 aircraft in a year for whatever level and at average of $500,000 to $1million for an aircraft, you might be looking at total average of $25million to $50million. The question to ask is, do these airlines and aircraft operators make such earnings annually in returns to the CBN or we still must find money for them from the public reserve? That is the dilemma of our country in distress and now bleeding”, he added.
