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Why Nigerian airlines shifted focus to airbus

Why Nigerian airlines shifted focus to airbus

The country’s domestic airline industry hitherto populated by Boeing aircraft type is gradually shifting focus to Airbus with about 15 aircraft currently flying domestic routes

The country’s domestic airline industry hitherto populated by Boeing aircraft type is gradually shifting focus to Airbus with about 15 aircraft currently flying domestic routes, Daily Trust can report.

This is described as a major leap in the inroad of Airbus into the industry and a departure from the past.

Though airlines like Arik Air and defunct First Nation operated Airbus aircraft in the past, it has not been visible in the industry for more than a decade until recently.

Currently, Air Peace which is the biggest airline in Nigeria today has 10 airbus in its fleet. Ibom Air recently took delivery of two to replace the two it earlier acquired though on a wet-lease arrangement.

United Nigeria Airlines also acquired one last year and in November, last year Ibom Air ordered 10 A220 aircraft valued at $905 million.

The order when actualised would cement the inroad of Airbus aircraft in Nigeria’s aviation industry.

However, findings by our correspondent indicate that most of the Airbus aircraft were acquired on wet-lease arrangements which experts say may not be too profitable.

In aviation when an aircraft is wet-leased either from another airline or a leasing company, the aircraft comes with its crew leaving no room for the operating airline to make little or no profit.

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Experts say wet lease arrangement should be considered as a stop-gap measure and discontinued as soon as airlines recover, noting that with the profit margin in aviation, no airline would break even sharing profit with another airline. 

Why Airbus?

Experts say the availability of Airbus in the market and its suitability for the Nigerian domestic market are some of the factors driving the decision of airlines to acquire the aircraft type.

Managing Director of Aero Contractors, Capt. Ado Sanusi in a chat said availability and pricing which are the main drivers for any airline are pushing them to go for Airbus.

He said, “At the end of the day, if the economies are right, the airline will take it. The A320s probably carry the required passengers the airlines need to make profit and it’s available and the pricing is good, they will take it.”

On whether fuel efficiency is another factor, he said, “Well, there is always that argument of fuel efficiency but I don’t think the airlines are looking at it that way because we are looking at very short periods.

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“These airlines are flying probably a maximum of one hour, 30 minutes and they are using these aircraft for six months or one year. When you are looking at the fuel efficiency aspect of it, we have to look at over a period of five to ten years. I don’t think fuel efficiency is a driving force for the airlines.”

He said leasing is desirable as a stop-gap measure when capacity declines probably due to aircraft on ground (AOG) situations.

On his part, Capt. Fola Akinkuotu said Airbus market strategy is paying off as it has been trying so hard to get a firm hold on the Nigerian market which is the biggest in West Africa.

He added, “Number two is that a lot of the airlines are looking for relatively newer aero planes that may not be as expensive, cost for cost. I am not certain 100% but I think Boeings are still more expensive to acquire in the beginning. Likely because of that, when you are looking for newer airplanes, people might start looking for acquisition cost and possibly rentals or leases.

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“So when you look at the newer airplanes in the market that are available, there may be more airbuses available. They are not necessarily brand new but if we look at the market, airbus has come up with variants of the 320s, the 320neo, there is the 319, the 321 and people who started up in buying some of these airplanes, the older editions, have been lured or they may have bought or leased or acquired the newer models. Therefore, the older models may be easily available.”

On the profitability of leasing, Akinkuotu, a former Director General of the Nigeria Civil Aviation Authority (NCAA), said, “There are two ways I look at leasing and the airline business. The core business of airlines is to transport passengers and goods from point A to point B. So their core business is not in owning aeroplanes. If you want to expand quickly, open new routes in a shorter time, then leasing is the better option for you, because it might not be so easy to find an airplane to buy, particularly the newer variant. But leasing companies are always there to help out.”

Dailypost

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