Rising maintenance cost drives Nigerian airlines to Ethiopia
Nigerian airlines are seeking cheaper locations to repair and maintain their aircraft as dollar scarcity persists, people with a deep understanding of Nigeria’s aviation sector say.
BusinessDay’s aviation analyst on a trip to Addis Ababa, Ethiopia and has observed that Ethiopian Airlines maintenance facility has aircraft and engines belonging to some Nigerian airlines undergoing routine and other levels of maintenance.
People familiar with the matter say Nigerian airlines get foreign exchange from unofficial sources at about N550 per dollar, making it difficult to carry out their scheduled maintenance as at when due. This development has made airlines re-strategise on affordable options to get their maintenance done.
Some of Nigeria’s domestic carriers have plans to start local Maintenance, Repair, and Overhaul, (MRO) facilities. This is not a reality yet and airlines are ferrying their aircraft to facilities offering cheaper rates.
For instance, some airlines are ferrying their aircraft to Ethiopia for periodic maintenance as the country offers them cheaper maintenance options than Europe and America, BusinessDay’s findings show.
BusinessDay also learnt that some Nigerian airlines recently took their aircraft back to Nigeria from Ethiopia after completing comprehensive maintenance.
Henok Yazew Haile, acting manager, sales and marketing Ethiopian Airlines told BusinessDay that Nigerian airlines are bringing their aircraft for maintenance in Ethiopia airline’s MRO facility because aircraft maintenance is cheaper here than in Europe, America, and other continents.
Haile disclosed that they had just carried out maintenance on Medview aircraft and Air Peace Boeing 777 in Ethiopia, while Arik Air is currently rebranding its aircraft to the paint hangar section of Ethiopia Airlines’ MRO.
He further disclosed that the firm is receiving orders to maintain more aircraft from Nigerian airlines and other countries.
“More Nigerian airlines come here because of cost. We are cheaper than Europe or the US. We are the first choice for aircraft maintenance of African airlines. We are Africans, we have to grow each other and support each other. Ethiopian Airlines is the pride of Africa. So every African carrier should come to Ethiopia, he said.
Haile however declined to speak on the average cost to maintain an aircraft in Ethiopia.
Ethiopian MRO performs the base and line maintenances under the approval of the Ethiopian Civil Aviation Authority (ETCAA). The base maintenance (Airframe, Engine, and Component shops) has had the FAA PART 145 Repair Station approvals since September 1968 and is currently approved for B737, B757, B767, B777, B787, Q400, and MD11.
Ethiopian MRO also holds EASA PART 145 approvals for both base and line maintenance at Addis Ababa for B737NG, B757, B767 and B777
In addition, the Ethiopian MRO base facility has the accreditation of Boeing as well as Bombardier as approve service facility.
However, Obi Mbanuzuo, chief operating officer, Dana Air said Dana Air has not maintained its aircraft in Ethiopia but when its B737 was due for C-check Dana sent a Request for Quote (RFQ) to all its accredited MROs that it hoped to work with.
According to Mbanuzuo, Ukraine, Ethiopian airlines and a maintenance facility in Naples Italy quoted for the job, adding that these quotes are not just a function of price but also turnaround time, warranty, who supplies parts, and other things.
He said after careful evaluation of all the quotes, it awarded the job to Naples and the aircraft went and is already back in Nigeria.
BusinessDay’s checks show that it takes airlines an average of 30 to 50 days to carry out aircraft maintenance in Ethiopia depending on the work scope.
“It is possible that if we request RFQ, what Ethiopian Airlines give to Arik (NG Eagle) might be much lower than what they give us (Dana) as they already have a relationship with Arik. In the same way, we have done business with Atitech in Italy for at least 10 years and get food rates from them,” Mbanuzuo disclosed.
George Uriesi, chief operating officer at Ibom Air said Ibom Air hasn’t maintained its aircraft in Ethiopia so it is difficult to say how affordable maintenance is at Ethiopia’s MRO.
Uriesi told BusinessDay that strategically though, to avoid exorbitant maintenance costs, Ibom Air is focused on ensuring that all its maintenance is done in Uyo in the shortest possible time.
A C- check on a Boeing 737 which is conducted between 12 to 18months costs the airlines between 800,000 dollars to 1million dollars. This amount does not include the cost of ferrying the aircraft abroad and other charges which will amount to over 200,000 dollars.
John Ojikutu, member of aviation industry think tank group, Aviation Round Table (ART) and chief executive of Centurion Securities, told BusinessDay that one single C-check on one Boeing aircraft costs between 800,000 to 1million dollars.
Ojikutu said this amount is enough to wipe out one year of profit made by an airline, so if they get cheaper maintenance options, they will explore these options.
Nigerian airlines are also setting up MRO facilities in a bid to reduce capital flight, save cost and create job opportunities locally.
AirPeace, United Airlines, and Ibom Air have concluded plans to set up MROs in Anambra Enugu and Akwa Ibom States respectively, with other airlines expected to pool into this as a way of getting the local industry to thrive better.
Air Peace is partnering with the Anambra State Government to get Embraer of Brazil, the world’s fourth-largest civilian aircraft manufacturer, to locate an MRO service centre for Africa in the state.