New planes, new dawn in air travel business
Indigenous carrier, Air Peace airline, lately touched down one of its 13 brand new E2 family aircraft, the first ever on the African soil. Aviation enthusiasts said it arrived with a cabin-full of positives for the local industry, airlines operation and international travel business. WOLE OYEBADE reports.
Thirteen-hour GMT, penultimate Thursday in Abuja, a ‘baby’ was born. Donned in a white-and-deep-blue colour, it sauntered into the warm afternoon with a ceremonious water-shower at the Nnamdi Azikiwe International Airport (NAIA). Checked-in passengers a bird’s eye view of the airside, and airport workers, all left seats and stations to catch a glimpse of the spectacle. When it came to a halt and the ‘Air Peace’ livery, with embossed Nigerian flag, shone even brighter, a round of applause erupted.
In a conference room, somewhere within the international terminal, the Minister of Aviation, Hadi Sirika, announced the arrival, orchestrating more ovations from an audience of state governors, lawmakers, and aviation stakeholders. When they funnelled to the airside to feel the equipment, coming straight from the manufacturer in Brazil, they all conceded it’s a new dawn and new chapter in the history of Nigerian aviation.
Indeed, the Embraer 195-E2 medium-range aircraft was the first brand new jet to be acquired by a registered Nigerian airline. The norm had been fairly-used equipment, either an an outright purchase or a lease arrangement. The significance is therefore not lost on aviators, especially at a time of devastating pandemic and global aviation downturn.
Specifically, the management of Air Peace has made a strategic investment in the right equipment that readily adapts to lean times. As Sirika would also affirm, it was the right model for the local industry to adopt and turn the corner of profitability, sustainability and competitiveness. Operators too agreed. They said the Air Peace mileage was another justification that Nigerian airlines could succeed with a measure of support, especially if given home-grown aircraft maintenance facility.
Besides, the global investors’ perception about the high risk of doing aviation business in Nigeria is also bound to change, with significant gains in insurance premium. And for customers with an appetite for good cabin interior, the Air Peace baby is the next best bet to binge.
An audacious, strategic order
When Air Peace, in April 2019, placed an order for 13 brand new aircraft at the Embraer Business Meeting at Port Louis, Mauritius, eyes narrowed back home and abroad. A region that had never bought or flown a new airplane ordered 13 of an airplane series that had never been used anywhere in the world!
The order, in fact, comprised purchase rights for additional 17 E195-E2 jets. With all purchase rights exercised, the contract has a value of N640.5 billion ($2.12 billion) based on the recent price list. Many marvels then was that the interested buyer was less than four years old in the game.
But Air Peace chairman, Allen Onyema, has a grand game-plan. Before shaking the table in Mauritius, Onyema had launched the no-city-left-behind initiative, which aims to deploy scheduled services into Yola, Jos, Minna, Calabar, Akure, Ibadan, Kebbi, Asaba and other destinations that are dubbed unviable and underserved. This will complement the acquisition of eight Embraer ERJ145 50-seater jets.
Not done, he simultaneously acquired four Boeing777 aircraft for international operations into South Africa, Dubai, Beijing, India, London, and the U.S., among others, to which it got approval. And to bridge the gap between local and international operations, a good sandwich is regional services for which the E2 family range is the best equipment.
Onyema recently explained to The Guardian that the aircraft was due for delivery to Nigeria in 2020, but for the disruptions of the pandemic. He had promised to receive the aircraft in October last year until foreign exchange (forex) scarcity stalled the schedule.
With the hurdle over, Onyema says Embraer’s new E195-E2 presents a marvel of economic performance. “It is also great that we will be the first E2 operator on the African continent. We already have the ERJ145s in our fleet. So, we understand the high standards of Embraer products.
“The E195-E2 aircraft will strengthen Air Peace’s drive to deploy the right kinds of planes to under-served and unserved domestic and regional routes under its no-city-left-behind project.”
Onyema thanked President Muhammadu Buhari, Sirika, and the National Assembly for creating an enabling environment for the growth of the aviation sector through waivers of Value Added Tax (VAT) and duties for commercial aircraft, engines and spares.
“The minister threw us the challenge to acquire new aircraft. That is what we have achieved today. The brand new aircraft made it a great day for Nigeria. Those aircraft will create at least 8000 additional jobs. That is my joy. At the two-week interval, more aircraft will start arriving in Nigeria,” Onyema said with high emotions.
Chief Operating Officer of the airline, Toyin Olajide, confirmed that among the new jobs created are pilots that have been training at the Embraer facility in Brazil, to ensure that the new aircraft are flown by Nigerian crew.
And as it is in aviation, according to International Air Transport Associations (IATA) statistics, every direct aviation job attracts four others indirectly. Give or take, that is about 32,000 potential jobs in the making.
What is it with new aircraft?
Devastating effect of the pandemic notwithstanding, Air Peace has arguably made the right and courageous investment at a crisis period, when other airlines are cancelling orders due to low patronage. With the lush golden era of jumbo cabins now over, the medium and small range of 50-seater aircraft are highly favoured for profitability.
The tradition among major legacy carriers worldwide is never to flog an aircraft for too long before they are replaced. Emirates Airlines, for instance, has a young fleet of planes that is often not more than five years old. The idea is to manage the high cost of maintenance that mounts as a commercial plane grows older.
The bottom-line: the newer the plane, the cheaper the cost of maintenance, the wider the profit margin.
Sirika said that the above logic was behind the aviation roadmap of the current administration to encourage airline operators to try new aircraft. Sirika, who commended Air Peace for heeding the call, said it was the right way to go for a modern commercial carrier that wants to compete, survive and endure.
He said Nigeria has had its fair share of multiple carriers using the wrong aircraft type, earning the nation an unpleasant place among countries with the highest number of unserviceable aircraft.
“We must never forget that the propensity to fly is determined by the price of the ticket, and in turn the choice of equipment. The equipment type determines the profitability and sustainability of operations. There is no way an airline that has invested in the wrong equipment can compete with one that has new aircraft. A new aircraft is fuel-efficient, requires minimal maintenance, the low workload on pilots and higher profit; all of which wrong equipment does not have.
“I will urge other operators to rethink their type of equipment for sustenance, following the example of Air Peace. Air Peace has keyed into the sectoral roadmap of aviation and it is commendable,” Sirika said.
One good taurn…
Perception matters in aviation too. Aviation insurance brokers would tell that insurance premiums on aircraft are often determined by aircraft type, the airspace to fly and the prevailing safety index in the country.
The COO of one of the local airlines explained that Nigerian aviation once had one of the worst reputations when it came to risk assessment. That was the era when commercial jets were literally falling off the skies, he said.
“That era is behind us now, but the stigma has not, because of the high insecurity in our environment. Those things matter to aviation too. So, foreign insurers, including manufacturers, see us as a high-risk environment where anything can happen. So, they levy a very high insurance premium on us. Nigerian airlines pay as much as times four of what other countries are paying on insurance. Yet, you want us to compete with them.
“That said, seeing one of us acquiring new equipment and being able to convince the manufacturer like Embraer to bring it to Nigeria is a milestone. It has shown that truly, they can do business with us and we can go there to negotiate a good deal even on insurance. I consider it as an open door to greater things, where other global manufacturers can make planes and bring them here for us to try. That is where we are getting,” he said.
Aviation analyst and member of the Aviation Safety Round Table Initiative (ASRTI), Olumide Ohunayo, said the brand new aircraft showed that the airline had good planning both for their fleet and operations.
“Having the new aircraft beautifies our sky and improves the quality of aircraft in our airspace. I give kudos to Air Peace for refusing to cancel the order at this trying time. I look forward to having it on the appropriate route so that things will work as planned. Most airlines will also have good bargains in acquiring aircraft now. I encourage other airlines to explore this opportunity and key into it,” Ohunayo said.
Imperatives of home-grown MRO
Former president of the National Association of Aircraft Pilots and Engineers (NAAPE), Isaac Balami, said the feat was a good avenue to drum up more support for the local sector. Balami said it was not enough for the government to urge local operators to acquire new aeroplanes, but also to complement their efforts with support mechanisms, especially the maintenance services within the country to avert capital flight.
Balami, an engineer and CEO of 7 Stars Global Hangar, said it was regrettable that the government had not established a Maintenance Repair and Overhaul (MRO) facility in Nigeria after 60 years of independence.
He said efforts by the private sector to establish the critical facility to support both airlines and the industry had been frustrated by government policies and refusal of banks to support the venture.
The President, Commercial Business Aviation at Embraer, Arjan Meija, said the E195-E2, tagged: ‘Profit Hunter,’ would help Air Peace achieve its ambition of connecting not only Nigeria but the whole of the African continent while feeding long-haul flights from their Lagos hub.
“Air Peace is also the first airline to configure a premium cabin with our staggered seat option. Each of the 12 Business Class seats is slightly offset from the other to give more space and privacy. There are three rows of seats arranged two-by-two at the 51-inch pitch at the 124-seater aircraft. Passengers by the windows have unobstructed access to the aisle; they don’t need to awkwardly step over their seatmates or ask them to move.
“The new 124-seat E2s complement the airline’s eight 50-seat E145s flyings with Air Peace Hopper. The Embraer fleet will create greater regional and domestic connectivity from the carriers Lagos hub. Apart from the 13 195-E2s on firm order, Air Peace has some purchase rights for 17 more of the aircraft, according to Embraer,” he said.
The optics are indeed looking good. One aircraft is already in the bag. Four are on the ground in Brazil. Eight are in the works and another 17 to ponder. Certainly, the days ahead will be interesting for the Nigerian airspace.
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