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National Hangar: Why Nigeria still suffers capital flight

National hangar: Why Nigeria still suffers capital flight

Domestic airlines in Nigeria are going through financial agony to maintain their aircraft which are mostly done abroad. To carry out some of these checks on an average Boeing 737-300, an airline spends no less than N38, 887, 496.95 (approximately US$250,000 ) apart from bearing some other extra charges like parking. In this piece, ANTHONY OMOH looks at the urgent need for a Maintenance Repair and Overhaul (MRO) facility in the country, how it would benefit the country and save further capital flight

Nigerian airlines continue to spend millions to carry out simple aircraft maintenance thus giving rise to the capital flight phenomenon that has eaten into all sectors of the nation’s economy discouraging Foreign Direct Investment (FDI).
Domestic airlines, in an effort to maintain safety in the air, pay through their noses to fly their aircraft to other countries across the world for maintenance which is done at very soaring cost.
Carrying out comprehensive checks on aircraft, especially the C and D are done every six or twelve months, depending, however, on the number of hours flown by the plane.
To carry out a C-Check on a B737-300 aircraft outside the country cost between $220, 000 to $250, 000 while the changing of a landing gear of the same aircraft brand cost around $80, 000.
Also, the D-Check is a complete overhauling of the aircraft, which requires the total changing of the aircraft parts and engine. This could cost the airline some millions of Dollars to carry out.
These airlines also lose revenue through payment being incurred on parking of their aircraft in foreign hangars during the maintenance period and flying charges for flying of their aircrafts through countries back home, among several other charges.
An aeronautic engineer with one of the domestic carriers, Engr. John Ekundayo in a publication had explained that carrying out of checks on the aircraft in foreign countries make operations difficult for the airlines.
He said that countries like Ethiopia, Morocco and South Africa where such checks are carried out benefits huge foreign exchange from the Nigerian airlines, adding that many of the country’s carriers had gone out of business due to lack of maintenance hangar in the country.
Ekundayo stated that in the past, so much noise had been made about establishing a national hangar, which would be government-owned, but despite the assurances of the government to invest in that aspect of aviation, nothing tangible had come out of it.
He noted that it would be much more affordable for airlines in the country to have their aircraft checks done in Nigeria than take them overseas and be able to save themselves and the country money, adding that such facility is lacking in the entire West and Central Africa.
He said, “But considering the thinking of the current government, which had always declared that government, had no business in running businesses because of its lack of core competence in this area, it has become obvious that a national hangar in the real sense of the world can no longer be attained.
“It will be much more affordable for airlines in the country to have their aircraft checks done here than take them overseas and be able to save themselves and the country money. Moreover, there is no such facility in the entire West and Central Africa. Therefore, if there is one in Nigeria, the country automatically becomes a hub of aircraft maintenance in the region, and that means more foreign exchange for the country.”
Ekundayo challenged the Federal Government to create enabling environment for airlines that had indicated interest in building the facility in the country and also allocate lands for the purpose.
Former Secretary General of African Airlines Association, Mr. Nick Fadugba queried that a study on the construction of maintenance hangar facilities has been in the pipeline for close to 10 years and wondered what happened to the study.
He noted that Nigeria needs a maintenance facility urgently, as there is no serious aviation nation in the world without a MRO facility. According to him, until Nigeria is able to tap into this, the nation cannot be taken as being serious in aviation.
Besides, the Federal Government in several forums had said that it would construct a maintenance hangar facility at one of the international airports in the country where all the airlines can carry out their maintenance and checks, but till date, none as seen the light of the day.
Key players in the aviation industry have also identified the benefits inherent in the construction of a national hangar in the country as numerous, which include aviation development, human resources, saving airlines in terms of money conservation and convenience.
If government had constructed a hangar, any hangar in the past; this would have given Nigeria the opportunity of Manufacturing Original Equipment (MOE), which would have given the country some level of manufacturing aircraft spare parts.
The presence of a hangar would have reduced the debt burden of the airlines which pay heavily to maintain their planes outside the shores of Nigeria.
The hangar, if constructed, would have become another source of revenue for government, as even airlines from the neighbouring countries will be willing to fly their aircraft down here for maintenance, which means more revenue into the coffers of government.
Possession of aircraft hangar would have given rise to the birth of many aeronautical and engineering schools for the purpose of training more personnel that will greatly reduce the present shortage of manpower.
A hangar will also assuage the economic loss suffered by airlines during bird strikes, as airlines spend a fortune to replace engines or carry out repairs on an aircraft which are damaged by bird strikes.
So what has the journey been like in trying to achieve this goal of constructing an aircraft hangar? To say the least there has been many proposals for the creation of a hangar or a national hangar to help ameliorate some of the maintenance problems faced by airlines in the country.
Stakeholders had mooted the idea for a national hangar in the 80s but that did not fly for many reasons.
Then there was a previous attempt including Vision 2020 which included the expansion of the then Nigeria Airways hangar to a full wide body hangar that could handle Boeing 747.
Attempts were also made for the construction of a national hangar in Lagos as part of Vision 2020.
All these ideas did not fly for clear political reasons; stakeholders who spoke to our reporter argued that in the last two years, the country signed an agreement with Lufthansa Technique which up till now has yielded nothing.
Despite the huge sum that has been wasted on the project, the recent move by the government through one of its the former minister of aviation to empower the German carrier, Lufthansa, to construct a national hangar in Abuja may have also collapsed, as nothing has been said on the project for long while the foreign carrier is currently enjoying some of the conditions attached to the agreement.
An aircraft maintenance engineer, Mr.Shehu Kyari, posited that the inability of government to construct a national hangar is nothing short of a national embarrassment.
Kyari cited how the committee set up between 1987 and 1988 by the government of former President Ibrahim Badamasi Babangida to look into how government could construct a national hangar only ended up wasting N50 million within the period on globetrotting under the guise of comparing different hangars.
Kyari, who said he did not know why the national hangar project was jettisoned, later cited how, during one of his visits to Dublin, he stumbled on Aer Lingus hangar which was built for $40 million (about N28 million), an amount which he said was a far cry from the N50 million squandered by the committee.
The wasted money, Kyari said, would have been used by government to complete the construction of the hangar, or at least, go far in its construction.
Recall that the General Ibrahim Badamasi Babangida (rtd) had, in 1988, set up a committee headed by Air Vice Marshal Nura Imam, then Air Officer Commanding (AOC) Nigeria Air Force Logistics, to work towards the setting up of a National Hangar.
The Babangida government earmarked N40 million for the project which was sadly misappropriated and even former president Olusegun Obasanjo’s administration did not do much to provide this facility that is a sine qua non for aviation development and revenue generation in the country.
Rather than the usual style of government investing in such a project, the Obasanjo administration chose a Build, Operate and Transfer (BOT) arrangement.
Again it will be recalled how during the tenure of Dr Kema Chikwe as aviation minister, an American company called AOG, with a Nigerian, Dr. Peter Obafemi acting as their representative, was awarded the contract to build the hangar on BOT in Lagos.
The award of the contract, which actually gave hope to the industry, was again dashed due to unknown reasons. Sadly, as the issue of the national hangar continues to be politicised, the country continues to suffer losses as the domestic airlines are left with no alternative but to fly out their aircraft for maintenance in hard currencies running to several billions of naira.

Hope rising
Meanwhile, the call for the reduction of the capital flight has not gone on deaf ears, as the business inclined Akwa Ibom State has almost completed its own Maintenance Repair and Overall (MRO) facility in the country.
At a point, the state government was calling for the Federal Ministry of Aviation to grant it exclusivity as the state claims that the agreement with Lufthansa for the MRO facility will disrupt its long term plans, however with what has transpired with Lufthansa Technic in Abuja it is unlikely that the Federal government will see its own plan through.
Minister of Aviation, Babatunde Omotoba, who spoke on the agitations by the Akwa Ibom state government, said that when the state’s MRO was approved, there was no provision that they will be no other facility in the country.
He also stated that even two MRO facilities may not be enough for the country in the long run, “Let’s think big and let’s not think small in order to move the country forward,” he said in a recent encounter with the media.
On this Fadugba said,” Akwa Ibom should think outside the box, they are a part of Nigeria that is not known for aviation and they are not known for maintenance either, so they have to be proactive and sell their facility. I really hope it works because they are going to be in competition and because the natural maintenance hub is actually the part known for aviation activity. But I believe if they find a good technical partner and they offer quality maintenance services at the right cost with good turnaround time and they run it efficiently, they will find business, I am confident of that but it is really a challenge for them to make money, they should keep at it and not give up”
Industry participant, Olumide Ohunayo also commented on hangars and the Akwa Ibom state government initiative stating that if complete the country will reduce the capital flight.
His words, “Multiple hangers is not a crime and there is nothing wrong with the federal government and Akwa –Ibom state developing hangers that will be able to take checks, up to ‘C’ level. Presently, there are numerous private and military hangers performing basic maintenance in the industry without squabbles. “
“Akwa-Ibom state, does not need to cry wolf ‘the more the merrier’, it will be good for Nigeria in particular and the industry in general. If Israel, a country that’s probably not bigger than Lagos state is having more than four hangers, why not Nigeria.”
“The hanger project is normally driven by strong and efficient airlines; unfortunately no Nigerian airline has the financial or human capital to set up a hanger of that magnitude without collaboration with major airline or an MRO organization that is certified to undergo such checks.”
“It is a step in the right direction for the federal and Akwa-Ibom state government, considering there are different shades of aircrafts to maintain and numerous organizations they can partner with to bring the programme to fruition. Akwa-Ibom state can also go further by setting up a flying school to maximize resources and space.”
He however advised the federal government that, “The hanger should be citied somewhere outside Abuja, for security reasons, considering the hanger will attract airlines and aircrafts of different shades and countries to the seat of power.”

About anthony omoh

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I am a Journalist with a passion for developmental stories and nigerianflightdeck.com was born out of passion for reporting the travel, business and aviation sub-sector. This site is an expression of my ideals and creativity as a reporter and my discretion as a publisher. I am extremely content doing this and I am sure when you read my stories you’d understand that I touch people and that’s why

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