Despite the current high foreign exchange rate putting a strain on the airline business, operators against all odds are increasing capacity to benefit from the anticipated passenger traffic that the yuletide period presents.
Airlines are leveraging loans and partnerships to bring in aircraft to feed local routes during the yuletide period.
In the past year, stakeholders had raised concerns over passenger glut owing to fleet reduction due to the high cost of maintenance.
Airlines that had sent their aircraft on maintenance are unable to return them as a result of the skyrocketing costs owing to the foreign exchange scarcity.
Others were forced by the Nigeria Civil Aviation Authority (NCAA) to ground their aircraft for the inability to send them for maintenance, BusinessDay’s checks show.
However, in barely one week, airlines have risen above the challenges and taken bold steps by boosting fleet capacity in a bid to benefit from the ‘showers of Christmas.’
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.
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 with Cronos Aviation, an international charter airline based in Montreal on the construction of aircraft Maintenance Repair Overhaul (MRI) in Nigeria said it will also code-share with the foreign firm to boost regional operations.
Air Peace recently returned its Boeing 737s aircraft from maintenance.
During the weekend, Xejet, which had hitherto operated charter service, started scheduled commercial operations.
Emmanuel chief executive officer, XeJet said the airline is targeting the first four major cities of Lagos, Abuja, Kano and Port Harcourt, but added that beyond these four cities, the airline would gravitate to where the market is and would add more cities as it continues operations.
Iza said the airline had taken delivery of an Embraer E190 which was undergoing inspections 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 inferences 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 expects that what the airlines are trying to avoid is any chaotic operations, to maximize the 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 to see what can be done with the smaller airports to ensure efficiency of the airspace usage and improve aviation’s contribution to the Gross Domestic Products,” he added.
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 fleet on domestic routes signals a positive for the industry, be it for a limited period; anticipating the Christmas and New Year period, when Nigerians and visitors come to Nigeria to celebrate the festive period.
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 return of B737s from maintenance. These are all positive signals for Nigeria’s aviation growth. It is hoped that festive Xmas fares.
Sindy Foster, principal managing partner, of 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 a testament to their resilience, adding 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’s 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 put together to operate a total of 91 aircraft. This data includes aircraft that have gone on maintenance.
Sources close to the NCAA told BusinessDay that apart from Dana Air which 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.
Seyi Adewale, the chief executive officer of Mainstream Cargo Limited, told BusinessDay that the major challenge before these new developments was that airlines were not making enough revenue to meet their FX needs for spare parts, technical needs including meeting the needs of their partners and lease operators.
Adewale said that the new pricing regime, has somewhat hedged this challenge and they can now meet up with their supplier, maintenance, and technical partner needs, noting that the floatation of the FX market has removed principally arbitrage.
He listed some factors that have facilitated the fleet boost to include fair priced situation which now attracts more routes with past market route developments, new airports across the country bearing fruits and the patronage of government (federal, state, and now local governments) as a result of major projects on-going in different parts of the nation.
He said the political need for constant movements such as rallies, campaigns, electioneering etc, and the quest for safety has shown the need for more capacity in the aviation sector.
Join BusinessDay whatsapp Channel, to stay up to date
Open In Whatsapp
