Despite the harsh operating environment, Air Peace which started operations five years ago with just four aircraft now has 30 aeroplanes in its fleet while other domestic carriers have struggled.
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The airline placed a firm order for 10 brand new Embraer 195-E2 aircraft. The order comprises purchase rights for another 20 E195-E2 jets. Also, 124-seater jet in dual-class and 146-seater jet in single class configurations respectively. With all purchase rights exercised, the contract is valued at N640.5 billion ($2.12 billion) based on current list prices.
The carrier also set a regional record in September 2018 when it ordered 10 brand new aircraft from Boeing, increasing its fleet size then to about 37 aircraft. With the new order, Air Peace’s fleet size has increased to 67 aircraft.
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Air Peace had earlier set a domestic record as the first Nigerian airline to acquire and register the Boeing 777 aircraft in the country. Three of the four wide-body aircraft it acquired for its long-haul operations to Dubai, Sharjah, Johannesburg, London, Houston, Guangzhou and Mumbai have so far been delivered.
Industry stakeholders, though marvelled at the unparalleled investment incapacity, they are optimistic that the 14 million passenger record may as well double in a year when at least half of Air Peace new orders join the current operating fleet. But the worry is the systemic hurdles that will shackle the enormous potential and attendant benefit.
No-city-left-behind initiative
The airline which started a campaign of not leaving out any city uncovered in its operations has sustained this drive in a bid to integrate cities across the country with low-capacity but strategic Embraer jets.
Out of the 10-brand new Embraer 195-E2 aircraft, Air Peace has taken delivery of about seven 50-seater Embraer 145 jet.
The equipment, according to Air Peace, is part of its vision of providing seamless flight services on the domestic, regional and international routes.
Air Peace says the company’s goal of guaranteeing seamless flight operations as well as connecting unserved and underserved routes was fast being fulfilled.
The arrival had further strengthened the airline’s resolve to provide seamless flight services on the domestic, regional and international routes, as well as extend the reach of exceptional operations to many more unserved and underserved destinations under the no-city-left-behind initiative.
“Upon the arrival of our first Embraer 145 aircraft in February this year, we set another record in Nigeria’s aviation industry with the establishment of a subsidiary, Air Peace Hopper to organise our plan to democratise air transport and deliver exceptional flight services to unserved and underserved cities in Nigeria and the West Coast of Africa.
The company reiterated that it is in aviation to create job opportunities, connect people and business and leisure destinations, help in growing the economies of Nigeria and other nations and make our nation proud in the global aviation community.
International front
The airline has spread its tentacles to also meeting international travel demands helping to restore the pride of the nation with Lagos-Dubai operation, as a forerunner for London, India, Beijing, Johannesburg, and New York operations.
Air Peace which operates the West coast regions has also been able to sustain Sharjah operations (UAE route). The airline which commenced Dubai route in July 2019, is shaking up competition on the route. High-end airlines which had operated on the routes for years have had to crash their prices since Air Peace provided relatively cheap fares for Nigerian passengers.
This huge ticket reduction is seeing summer passengers book for tickets, as airline currently records almost 80percent load factor on its fight-flight to Sharjah.
While AirPeace is not flying directly to Dubai like its competitor, Emirates, it is making provision for a complimentary bus to convey its passengers from Sharjah to Dubai which is within a space of 15minutes. The airline is also leveraging its new aircraft, Boeing 777 aircraft; the same aircraft Emirate also uses to drive patronage on the route.
AirPeace operates three times weekly to Sharjah; Tuesdays, Fridays and Sundays, from only Murtala Muhammed International Airport (MMIA) Lagos. With the commencement of operations on this route, Air Peace is offering travellers from Nigeria the opportunity of connecting 23 other destinations from the United Arab Emirates.
The destinations that could easily be connected from Sharjah international airport include Riyadh, Madina, Jeddah, Beirut, Delhi, Colombo, Dhaka, Mumbai, Kathmandu, Moscow and several others.
In addition to this, the airline’s repatriation of over 500 Nigerians from South Africa at no cost to the returnees or government has received commendations from Nigeria and outside the country.
Air Peace is currently playing the supposed role of the national carrier in the evacuation of several stranded Nigerians in South Africa as a result of the xenophobic attacks. The airline spent over N300 million to carry out the evacuation.
Air Peace, no doubt is the highest employing carrier in Nigeria, creating over 5,000 direct and indirect employments; again playing the role of a national carrier.
Why Air Peace stands out
Several people have raised concerns why the airline seem to record great strides despite numerous challenges in the industry ranging from multiple taxations, absence of maintenance facility, scarcity of foreign exchange, high cost of aviation fuel and unfavourable policies amongst others.
Allen Onyema, the Chairman of Air Peace had described his airline as prudent and disciplined, adding that the airline is always careful when making investment decisions.
Dapo Olumide, former managing director of Virgin Nigeria Airways and currently the CEO of Ropeways, said that one of the reasons why airlines in Nigeria fail is lack of corporate governance.
Olumide said an airline should have the kind of people in the board that would question decisions taken that are not good for the sustenance of that company.
He regretted that many Nigerian airlines do not have corporate governance and that explained why some of them went under.
However, Air Peace is setting a pace in the move to overcome that major ailment of Nigerian operators by appointing eggheads, industry experts and corporate gurus to its board. The board members came with invaluable entrepreneurial acumen and they aim to guide and unravel the vision of the airline to become a major carrier in Africa and in the world.
Emeka Ngige (SAN), Renowned lawyer, Mutiu Sunmonu, former Managing Director of Shell Petroleum Development Company, Benedict Adeyileka, former acting Director-General of the Nigerian Civil Aviation Authority (NCAA); and other new directors of Air Peace pledged to work airline to deliver on the airline’s vision to transform air travel and project a positive image for Nigeria in the global aviation community.
Onyema said the airline is in good hands with the pedigree of its Board Members and expressed the hope that the targets mapped out for the airline when it was established is being actualized.
He noted that while corporate governance is key to driving a business to success, it is pertinent to also look carefully while engaging those that will pilot the affairs of the company whether as Board Members or senior executive staff.
Policies to make local airlines thrive
With the success Air Peace has recorded in just five years, it is enough reason to justify that local carriers can get it right if the government would listen to their yearnings.
John Ojikutu, a member of the aviation industry think tank, Aviation Round Table (ART) and chief executive officer, Centurion Securities, listed some ways government could support domestic airlines.
First, Ojikutu said there should be a careful assessment of their business plans to ensure the airports designated for their operations are well equipped to support and sustain their day and night operations and even during inclement weather.
Secondly, he explained that government policies on open skies and commercial agreements with foreign airlines must limit their operations in domestic routes. He said concessions given to foreign airlines for multiple destinations must be reduced to two indifferent airports outside Lagos and Abuja.
Allen Onyema has stressed that Air Peace will never be able to combat international aero politics without the support of the government.
“It is a shame that several Nigeria airlines have come to Dubai and they were pushed out either through unfair competition or some arm-twisting tactics, it is very unfair. The only plan we have is the plan of sustainability, to sustain our operations to the best of our abilities. That is so far as we can go, if we are not supported,” Onyema said.
Another major challenge for local carriers is the exorbitant interest rate banks charge airlines access loans. While other African Airlines are accessing fund to purchase and lease aircraft at an interest rate of three to six percent, airlines in Nigeria access loan facilities with interests rates of between 21 and 26percent.
“It is better to get new aeroplanes and get rid of older ones but to make this happen, we need financing. In Nigeria, no bank wants to finance an airline for more than ten years. So, you find out that it is difficult to keep up with payments on a 21 percent interest rate for ten years,” Obi Mbanuzuo, chief operating officer, Dana Air told BusinessDay.
He said, “When we send one aircraft for C-check, it cost us almost $1 million and takes between one to two months to get back. On the other hand, a new aeroplane will only need maybe 20 days of ground time. It will be a bit cheaper to maintain because it hasn’t gotten to a point where of doing corrosion prevention works on the aircraft. However, interest rates to acquire more aircraft in Nigeria are scaring operators away,” he added.
