Airlines acquire new planes to meet Christmas demand

Nigeria’s domestic airlines are acquiring new planes to feed local routes and meet rising demand as Christmas approaches.

Last week, Ibom Air expanded its fleet with the addition of two Bombardier CRJ 900 next-generation aircraft, registered as 5N-CED and 5N-CEE.

These two new CRJ 900s were outright purchases financed through a shareholder loan.

Similarly, United Nigeria Airlines, last week, acquired an Embraer 190 aircraft (E190). The airline is optimistic that it will acquire another E190 aircraft before the end of this year.

The airline, which recently partnered Cronos Aviation, an international charter airline based in Montreal on construction of aircraft Maintenance Repair Overhaul (MRI) in Nigeria, said it would also code-share with the foreign firm to boost regional operations.

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Air Peace recently returned its Boeing 737s aircraft from maintenance.

Over the weekend, Xejet, which had hitherto operated charter service, started scheduled commercial operations.

Emmanuel Iza, chief executive officer, XeJet, said the airline is targeting the first four major cities of Lagos, Abuja, Kano and Port Harcourt, noting that beyond these four cities, the airline would gravitate to where the market is and add more cities as it continues operations.

Iza said the airline took delivery of an Embraer E190, which was undergoing inspection, and hoped to commence operations with it on November 7, 2024.

“This trend happens during Christmas. As Christmas approaches, the airlines bring in aircraft. Remember these airlines have been receiving bookings on their system and they have used those bookings to make statistical inference of the kind of capacity they would need during that period. So, we are not surprised,” Olumide Ohunayo, industry analyst and director of research at Zenith Travels, told BusinessDay.

Ohunayo said he suspects that what the airlines are trying to avoid is chaotic operations to maximise loyalty of their passengers who have booked them and ensure they provide services for the revenue collected.

“I think this is a good move. I also welcome Xejet to the fray by providing a unique service, which is new to the Nigerian market. No matter how little, capacity is needed.

“What I look forward to is what can be done with the smaller airports to ensure efficiency of the airspace usage and improve aviation’s contribution to the Gross Domestic Product,” he further said.

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He called on the Nigeria Civil Aviation Authority (NCAA) to review the age limit for aircraft on scheduled operations so that the industry can have more aircraft and improve scheduled and non-scheduled operations.

A retired captain of a Nigerian airline, who would not want his name mentioned, said the addition of a fleet on domestic routes signals a positive for the industry. The captain hinted that the present capacity of aircraft has been low across the industry.

“United Nigeria has introduced an Embraer E 190. Xejet has become a scheduled carrier. Ibom Air has added two CRJ 900s to its fleet, anticipating new destinations and frequency increase to existing routes. Air Peace has returned B737s from maintenance. These are all positive signals for Nigeria’s aviation growth. It is hoped that this would impact the Christmas fares.”

Sindy Foster, principal managing partner, Avaero Capital Partners, told BusinessDay that the industry is in dire need of capacity.

According to Foster, with so many aircraft grounded due to scheduled maintenance or engine related maintenance delays, all exacerbated by forex-related maintenance delays, it has been a difficult year for Nigerian aviation.

She said the fact that Nigerian airlines are still investing in the sector at such a difficult time is a sign of their commitment and testament to their resilience, noting that they are in it for the long haul.

“Would this new fleet addition help address the current aircraft scarcity we have? The new additions will, in no way, replace the lost seat capacity across the board, but at this point, it is a case of better than nothing. The airlines are not where they should have been in terms of capacity, with so many of the issues out of their control,” Foster explained.

Before the arrival of the new fleet, data obtained by BusinessDay from NCAA showed that 13 domestic airlines operating in Nigeria together operated a total of 91 aircraft. This data included aircraft that had gone on maintenance.

Sources close to the NCAA told BusinessDay that apart from Dana Air that has been grounded, over half of the 91 aircraft have gone on maintenance, putting a strain on the few operating aircraft. Currently all scheduled airlines put together cannot boast of 40 operating aircraft.

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Seyi Adewale, chief executive officer of Mainstream Cargo Limited, told BusinessDay that the major challenge prior to these new developments was that airlines were not making enough revenue to meet their foreign exchange needs for spare parts and technical needs, including the needs of their partners and lease operators.

Adewale said that the new pricing regime has somewhat softened this challenge and they can now meet up with their suppliers, maintenance, and technical partner needs, noting that the floatation of the FX market has removed arbitrage.