The need to reduce capital flight, save cost and create job opportunities locally is driving Nigerian airlines to set up Maintenance and Repair Overhaul (MRO) facilities, and there are lessons local carriers can learn from African countries that have succeeded in running MROs.
For instance, AirPeace and United Airlines have concluded plans to set up MROs in Anambra and Enugu, respectively, with other airlines expected to pool into this as a way of getting the local industry to thrive.
AirPeace is partnering the Anambra State government to get Embraer of Brazil, the world’s fourth-largest civilian aircraft manufacturer, to locate a MRO service centre for Africa in the state.
Even as stakeholders in the sector have commended moves by domestic airlines to set up home-grown maintenance facilities, they also advise carriers to learn from African countries like Egypt, Ethiopia, Morocco and Kenya that have successfully managed their maintenance facilities.
Ethiopian Airlines has its Ethiopian Airlines MRO; South Africa runs its MRO Division, South African Airways Technical (SAAT) Airways; Egypt Air has its commercial Maintenance & Engineering MRO. Kenya Airways operates KQ Technical, its technical and engineering wing providing maintenance services for aircrafts, and Morocco operates its Snecma Morocco Engine Services (SMES), where it carries out expanded maintenance, repair and overhaul.
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Experts say these countries and their carriers have built sustainable MROs by managing key components, which include the airlines, service providers and training.
Ado Sanusi, former managing director/CEO of Aero Contractors, says these components have been able to align to the business strategy and the policy of the countries establishing the MROs.
Checks by BusinessDay show that these carriers have sustained the MRO facilities in their countries by making it commercial to other local and international airlines, developing a plan or pathway for long-term equipment acquisition, retooling, expansion and commercialisation.
These carriers have also entered strategic partnerships with their respective governments for support and avoiding politicking.
For instance, Ethiopian MRO caters for carriers within Africa and some European airlines. South African Airways Technical (SAAT) Airways MRO also caters for carriers within South Africa and beyond. These aggregates of aircraft from across various countries help these carriers realise reasonable return on investment to sustain the MRO facilities.
Seyi Adewale, CEO, Mainstream Cargo Limited, says the MRO facilities in these countries have been sustained by building supporting training schools to develop new and young professionals starting from post-secondary school level training in areas such as tooling and fabrication skills. They then proceed to graduate level, empowering them accordingly and at professional level, helping to impact culture, philosophy and continuous programmed development.
Nigerian airlines currently carry out major checks and maintenance of their aircraft in Europe, America and Ethiopia Airlines hangar in Addis-Ababa, Ethiopia, depending on the degree of maintenance required.
The initiative to set up MRO is coming at a time Nigerian airlines are struggling with high foreign exchange rate, making it increasingly difficult to pay for spare parts, repair and maintain their aircraft as at when due.
Checks further show there are about 100 aircraft owned by Nigerian airlines, servicing domestic, regional and international routes.
Aero Contractors in the last three years maintained about eight Boeing aircraft at its maintenance facilities, implying about 92 aircraft are still being maintained outside the country as a result of absence of aircraft maintenance facilities.
The cost of a C-check on an average aircraft, which is conducted within 12 to 18 months, cost between $800,000 (N384m) and $1 million (N480m) at an exchange rate of N480 to a dollar. This amount does not include the cost of ferrying the aircraft abroad and other charges.
This implies that within 12 to 18 months, Nigerian airlines would spend between N35.3 billion and N44.16 billion on maintenance of about 92 aircraft.
Adewale, who commended the initiative of local carriers to build MROs, says the facilities are needed at this time for country’s self-sustainability, to reduce Nigeria’s trade deficit and huge FX outflows due to aircraft maintenance checks, train airline professionals and in turn creating jobs, while also increasing the profitability of domestic airlines.
John Ojikutu, member of aviation industry think tank group, Aviation Round Table (ART)/chief executive of Centurion Securities, notes that one of the major problems of the Nigerian airlines is initial poor business plans.
According to Ojikutu, major questions airlines would need to ask before setting up MRO would include: “What would be the main types of aircraft and market sources of their materials and clients – locally and regionally? Where would the manpower or skills for the maintenance come from? Who are their proxy competitors locally and/or regionally?”
Nigeria for over 30 years tried to establish an MRO facility, which was initially named national hanger, he states. “I advise AirPeace and its partners to research into why the previous efforts failed even when in the past there were few types of aircraft operating in the country, within the region and continentally, (Boeing series mainly),” he says. Now that there are more variants of aircraft, the technical and manpower requirements will be broader, he says.
