The harsh aviation environment is forcing airlines to explore survival options. To reduce the cost of operations, given the soaring price of aviation fuel, airlines are navigating new bends to keep their operations afloat.
The unfriendly business environment is pushing investors/operators to rejig their strategy.
This is coming on the heels of the increase in the price of aviation fuel otherwise known as Jet A1.
In Nigeria, the price of jet gas is hovering around N1,000 per litre depending on where the product is sourced.
With a big aircraft such as Boeing 737/MD 83 consuming between N50 million and N70 million fuel daily, operators are cutting flight frequencies to keep afloat.
To stave off the hammer of the regulator – Nigerian Civil Aviation Authority (NCAA) – which is looking into the books of indigenous carriers to ascertain their financial/technical health- operators are leasing aircraft.
The leasing option, which experts say could either be the dry/wet option, requires an operator to use the airplane of another carrier for its flight.
Investigations revealed that Arik Air, Air Peace, United Nigeria Airlines and others have adopted this option in the last dozen months.
Last week, the oldest Nigerian carrier Aero Contractors Airlines opted for a joint venture with another indigenous carrier – UMZA Express Limited.
Aero Contractors Airlines, according to the deal, entered into the joint venture to utilise Dash 8 (Q-400) aircraft on the fleet of the partner to resume scheduled flights to be made public soon.
Experts have described the joint venture as equipment investment by UMZA Express Aviation Services in Aero Contractors.
The first of the Dash 8 Q-400 aircraft arrived at Abuja Airport last week. Other aircraft are expected in the coming weeks.
Aero has taken delivery of the first set of two Dash-8 (Q-400) aircraft at the Nnamdi Azikiwe International Airport, Abuja. The Nigerian registered aircraft owned by UMZA Air will be operated by Aero Contractors.
The Dash 8 is one of the most- fuel efficient and modern aircraft in the market and has a capacity for 74 seats.
Speaking after taking delivery of the aircraft, Aero Contractors Managing Director Captain Abdullahi Mahmoud said: “This is part of our recovery strategies since most of our aircraft are undergoing maintenance and we want to ensure that when we are coming back as we promised, we come back very strong.”
He said Umza’s investment is “a strategic business alliance” that we see both companies share in the profits the aircraft will make.
“If you look at the aircraft, it is not like a wet lease because it is a Nigerian registered aircraft, so it is our crew that are going to operate it. Our pilots, cabin crew are going to operate it. We have finished signing the agreement with them. There are five aircraft coming in and this is the first,” he said.
“We are getting prepared to resume operation as soon as possible. I don’t want to give the exact date that we are resuming but we are going to resume as soon as possible. So, we are working day in and day out because we don’t want to rush coming back.”
UMZA Express Aviation Services Chief Executive Officer Mahammed Abubakar described the decision to invest in Aero Contractors as strategic.
He said: “We are diversifying into aviation despite the troubling situation because some people have to take the risk.”
He said the aircraft to be brought were Dash 8 Q-400.
“I think it is the best because of the fuel efficiency,” he added.
NCAA Director-General Captain Musa Nuhu said the situation in global aviation necessitated the need for airlines to rejig their strategy.
He said there was nothing wrong for carriers to adopt any partnership that would enable them keep their operations afloat.
In particular, he said, the rising price of jet gas calls for the right use of aircraft.
In a related development, the NCAA boss reaffirmed his commitment to ensuring the continued sustenance of safe and secure flight operations.
In an interview with reporters in Lagos, at the weekend, Nuhu said the regulatory agency would continue the implementation of its responsibilities of ensuring the confidence of the flying public.
Nuhu said investigations were ongoing into the operations of the suspended Dana Air. He said the carrier would remain grounded until the identified issues were resolved in compliance with the Nigerian Civil Aviation Regulations (Nig.CARs).
He said the NCAA had carried out audit of the airline, which outcome showed a weak financial position and violations of Nig.CARs, that led to the suspension of the airline’s Air Transport License (ATL) and Air Operators Certificate (AOC).
