…Says NG Eagle airline may commence operations in 3 months
By Chinelo Obogo
Managing Director of 7-Star Hangar, Roland Ahmed, has said investors are reluctant to do business in Nigeria’s aviation sector because of its negative ratings.
Speaking at the recent symposium of the National Association of Aircraft Pilots and Engineers (NAAPE), Ahmed who was contributing to the topic of the event; “Effective Economic Regulation of the Aviation Industry as an Imperative for Safety and Workers Welfare’, said that many airlines are weak and are struggling financially, hence, the new regulation that airlines must have a minimum of six aircraft to be allowed to operate in the country, is not feasible.
At a recent virtual meeting with aviation correspondents over the weekend, the Director-General of the Nigeria Civil Aviation Authority (NCAA), Capt. Musa Nuhu, said airlines must have strong financial capacity and a minimum of six aircraft to be allowed to operate in the country.
The DG said the new policy is not only for new startups but also for existing operators, adding that existing operators have been given a deadline to comply with the policy. Before now, domestic operators were required to have at least three airworthy aircraft before commencing operations.
Ahmed said that while the policy was successful in the banking industry, it may fail in the sector, urging the government to look inward to address the situation.
“NCAA says new and old airlines must now have a minimum of six aircraft, if that is allowed to stand, it means it is only Air Peace that would operate. We would see how to go around it but I tell you that it is a very difficult one. We need to strengthen the airlines but I tell you that this new act is a killer. I have sat in the management for NG Eagle and it has been over six months that we have been looking for aircraft engine.
“I have sent over six lease requests for engine but no one wants to do business with Nigeria. Our rating is the negative and the lessors will tell you that if you would not buy it out rightly, you should leave it. One aircraft engine cost five million dollars and two engines cost $10 million. Who wants to give you that? And they are saying you should get six aircraft. When you include the airfare, it will cost you two million dollars, which is $12 million in today’s Nigeria. We are buying pounds for N1, 200 and dollars at over N900, so, I do not see how the airlines are going to survive this. You might have $12 million to a 737 but that amount will buy you four classics fresh from C-check, 22 years or less than 25 years old, so why should I go and buy an engine?
“You don’t measure engines by the number of years it can serve you; it is by the cycle available. So, for a mid-engine that is about 3,000 to 5,000 cycle, if you want to lease, maybe it is about $75,000 to $120,000 monthly. So, it depends on where you are getting the engines from and the terms and conditions; short term lease or long-term lease. But, most lessors will prefer a long term lease, which is about minimum of three years because they want you to use the engines and enjoy it and so also, they can recoup their funds,” he said.
Speaking on NG Eagle, which was formerly a startup of the Asset Management Corporation of Nigeria (AMCON), he said the airline will likely commence operations in three months’ time.
“The aircraft are there and the airframes, but the engines are out of cycles and parts of the challenge now is that we are thinking of taking our own engines to the shop to repair, but we also need loaner engines to see how we could use that and startup operations. Currently, we need about four to six engines, which we are working on because it has been very difficult and very challenging. This has delayed the startup date, but the startup plan is still on course. We are only looking at the alternates. If we cannot continue with the B737 engine, which we currently have, we will look at other options of aircraft that are available to us. We are looking at the next three months to start and hit the ground running,” he said.