Fourteen years after the liquidation of the former national carrier, Nigeria Airways, Aero Contractors under ownership of AMCON has begun to undertake C-checks on its new maintenance facility, which may save Nigerian Airlines up to N2.85 bn.
The first of the C-Checks was done on January 4th, 2018.
Before now, major C-checks were carried out in Israel, Jordan, South Africa, Ethiopia, Morocco and America.
Aviation sources tell BusinessDay that airlines may be saving up to N2.85 billion by using Aero Contractors new Maintenance, Repair and Overhaul (MRO) facility where checks on about 26 Boeing aircraft is expected to be carried out within a period of 18months.
A C- check on a Boeing 737 usually cost airlines between up to $800,000 dollars. This amount does not include the cost of ferrying the aircraft abroad and other charges which will amount to over $200,000 bringing total costs to $1 million per check on each aircraft.
This implies that airlines would have paid at least $26 million dollars for all 26 Boeing aircraft currently operating in the country which will amount to a sum of N7.93billion.
Sources at Aero Contractors tell BusinessDay that doing the checks domestically would cost 30 percent cheaper, implying savings of up to N2.85 billion.
“I commend the federal government and Aero Contractors under the receivership of the Asset Management Corporation of Nigeria (AMCON) for making the maintenance facility operational for airlines,” John Ojikutu, member of aviation industry think tank group, Aviation Round Table (ART) and chief executive of Centurion Securities, said.
“This initiative will save airlines a lot of cost incurred on just aircraft repairs and maintenance, especially as majority of the domestic airlines operate Boeing 737 aircraft.”
Ojikutu told BusinessDay that one single C-check on one Boeing aircraft that costs between 800,000 to 1million dollars is enough to wipe out one year profit made by an airline.
Medview Airlines Nigeria Plc recently reported a 6.30 percent drop in third-quarter net profit as the company’s operating costs spiked on the back of maintenance costs incurred on newly acquired aircrafts.
For the first nine months through September 2017, the company’s net income fell to N1.19 billion from N1.27 billion the previous year.
Sales surged by 48 percent to N28.77 billion in the period under review from N19.44 billion as at September 2016.
While Medview’s sales increased in the period under review, the aviation giant incurred huge operating costs.
Operating cost increased by 45.81 percent to N24.22 billion in the period under review while Aircraft maintenance surged by 1671.18 percent to N1.73 billion.
Analysts say the cost of maintenance wouldn’t have ballooned if aircrafts are maintained in the country as firms pay in foreign currency if conducted abroad.
BusinessDay’s checks show that out of the 26 Boeing 737 operating in Nigeria, Air Peace operates 12 Boeing737 aircraft, Azman operates four, Medview operates four, Allied Air has about three , JetAir operates one aircraft, and two other charter services operate 2 Boeing 737s.
“The cost of aircraft maintenance would have reduced by at least 30 percent if Nigeria has maintenance facility in the country, but the crash of the naira has upped the cost of maintenance,” said Victor Egonu, the head of flight operations, Air Peace.
Ado Sanusi, Chief Executive Officer of Aero Contractors told BusinessDay that it is quite expensive to take the aircraft to Israel, Jordan and America for maintenance, adding that the new facility is a great deal for Nigeria.
“When aircrafts are taken to the maintenance facility and they are opened up, the maintenance engineers might see additional work to be done on the aircraft, such as corrosion. We give 30percent off the price. We have also eliminated the cost of ferrying the airplane to wherever airlines are going,” Sanusi explained.
He further disclosed that 90percent of the manpower for the MRO is done locally and the remaining 10percent are technical partners such as South African technique that provides the airline with some specialised manpower, quality inspection advice, specialised tooling, manpower and spare parts.
He also said A J Walter Aviation Limited gives the airline specialised tooling and spare parts.
IFEOMA OKEKE
