United Nigeria, XEJet set up local repair facilities to save FX

…Ibom Air establishing MRO provider

United Nigeria, XEJet and Ibom Air are setting up facilities to maintain their aircraft locally and save the scarce foreign exchange.

Domestic airlines spend scarce forex on repairing their planes outside Nigeria, but some players are beginning to set up local maintenance, repair and overhaul (MROs) facilities to reduce their FX exposure.

In 2024, airlines leveraged loans, lessor agreements and partnerships to bring in 10 aircraft to feed local routes amid plane scarcity, signally a boost of confidence by investors.

Now, the airlines are investing in building MROs locally to ensure their leased planes are repaired locally, thereby reducing capital flight and saving FX.

United Nigeria Airlines and Cronos Aviation, an international charter airline based in Montreal, signed a memorandum of understanding (MOU) in 2024 to construct an MRO in Nigeria.

The partnership between both aviation firms will see Cronos transfer its technology and help United Nigeria train its crew and technical personnel.

Obiora Okonkwo, chairman of United Nigeria Airline, explained that apart from aviation fuel, aircraft maintenance erodes the revenue of airlines, noting that United Airlines’ new partnership with Cronos will help it reduce operating costs.

It will help the nation save its scarce foreign exchange and open up a new door for other aspects of strong participation in the aviation sector, he said.

Okonkwo noted that there is a high number of aircraft on the ground (AOG) resulting from high foreign exchange rates, making it difficult for airlines to carry out their periodic maintenance.

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Also, XEJet, a local airline, last week, officially commenced the construction of its MRO, flight support and engineering centre at the Nnamdi Azikiwe International Airport in Abuja.

The groundbreaking ceremony for the project was conducted by Festus Keyamo, Nigeria’s minister of aviation.

In his post, Keyamo highlighted the project’s importance in fostering the growth and sustainability of local airlines in Nigeria.

Nigerian carrier, Ibom Air, is also establishing an MRO provider for the African continent, mirroring the likes of EgyptAir, Ethiopian Airlines and Kenya Airways.

Ibom Air is also working with Airbus Consulting on its maintenance strategy for the next six to eight years, which include plans for full scope A220 work.

Olumide Ohunayo, industry analyst and director of research at Zenith Travels, said: “Festus Keyamo, the minister of aviation, has been giving the approvals for construction of MROs. MROs cost a lot of money and land space, and you need to get all the necessary certifications from all the needed parties. When you do this, you can now attract other airlines from other countries to come to your facility to do repairs,” Ohunayo said.

He noted that the neighbouring countries still lack MROs, stressing that the MROs being built are not just for aircraft and engines but also for aircraft component repairers of different types.

He said most components’ repairers are in Morocco, Ethiopia and South Africa.

He hinted that by the time the MROs are completed, Nigeria would be joining the league of countries with facilities that can repair and service components within the African subcontinent.

“As Ibom Air switched to the A320, Airbus became interested and agreed to partner them in their MRO. Xejet is a jet operator. If the suppliers or the lessors of the aircraft say they can bring some parts and components of the aircraft or jets, this will be another way of having the MRO,” Ohunayo said.

BusinessDay last year reported that airlines were beginning to look inwardly for aircraft maintenance as Nigeria’s foreign exchange scarcity makes overseas repairs nearly impossible.

“Since the unification of the foreign exchange, we have seen more airlines use our facility to carry out C-checks on their aircraft. Before the unification of exchange rates, airline operators were not coming to us because they used to get dollars from the Central Bank of Nigeria through the FX windows,” said Ado Sanusi, managing director/CEO, Aero Contractors of Nigeria Limited, and Aero MRO, one of the biggest maintenance facilities in Nigeria.

Sanusi told BusinessDay that the company has had its maintenance hangars full and has been forced to use Air Force hangars to accommodate planes awaiting maintenance.

Before the unification of the exchange rate, airlines had leveraged FX windows provided by the Central Bank of Nigeria (CBN) to source dollars at favourable rates to carry out their maintenance and run other expenses.

But with the unification of the exchange rate, the advantages that come with the windows have been eroded, forcing airlines to patronise local MRO facilities.