Nigerian Airlines Build Capacity With Aircraft Leasing

October 23, 2021

On Monday Nigeria’s oldest carrier, Aero Contractors operated its inaugural flight to Maiduguri, capital of Borno state amid fanfare and excitement.

Aero was able to add Maiduguri to its route because it has started growing its aircraft fleet. About a month ago, the airline known for its safety record in its 62 years of operation, received two Airbus A320 aircraft on wet lease. It was one of the new equipment that took Maiduguri bound passengers to Abuja, where the airline connected the travellers to Maiduguri, using its own aircraft, a Boeing 737-500.

What was remarkable is that the aircraft with capacity of about 160 passengers recorded high load factor, which stressed the need for more aircraft in Nigeria’s domestic market.

Now that the Christmas season is approaching, there is going to be high demand for flights, especially now insecurity has eroded road transport to many parts of the country.

The Managing Director of Aero Contractors, Captain Mahmoud Abdullahi explained to THISDAY during the inaugural flight that aircraft leasing is good for Nigerian carriers because they do not have capacity and that explained why there have been issues of flight delays, flight cancellation and high cost of flights.

“Nigerian airlines don’t have capacity, there are passengers, if you go to the airport as of today, you could see passengers begging for tickets. So all you are looking for is for capacity, just get the right aircraft, put it on the right route and passengers will fly. We could see the passengers’ number growing and the high season is coming, we don’t want Nigerians to go through what they have been going through in previous years most especially in November and December. You could see passengers sleeping at the airport, so in Aero we are trying as much as possible to do things differently. Once you buy Aero ticket you are sure of travelling and that is one thing that we are determined to do; to make sure that Nigerians are happy.

“Nigerians deserve it, there is no doubt about it. So, like I said, the challenge that the airlines are having is the capacity and any opportunity that you see in getting good aircraft, you have to jump into the opportunity and grab it. So we are doing things differently, we don’t have money to buy planes but if you have people who want to bring in the planes for us to cooperate and work together, that is all we need. So that is why we are trying to make something different, we want to change the narrative.

“So now we see people that have the capacity, they want to bring in the aircraft, they want to come into collaboration, we discuss with Nigerian Civil Aviation Authority (NCAA) and said this is what we want to do, Nigerian civil aviation looked at the regulation and said go ahead and that is what we are doing. All we want is for Nigerians to move from point A to B and be safe and when they want it at the right time and be safe. And that is what Aero stands for,” Mahmoud said.

The Managing Director of Flight Logistics Solutions, Amos Akpan explained aircraft wet leasing as when an airline hires aircraft from another operator with crew, maintenance, insurance (ACMI), noting that this implies the airline payments for the hire is for the agreed hourly utilization of the aircraft, the crew, the maintenance, and the insurance.

“The utilisation has a minimum agreed hours per month. Whether you use up to that agreed hours or not, you pay that minimum agreed hours. You may use above the minimum agreed hours, above which both parties may agree to pay less than the initially set minimum agreed hours.

“The operator who leases out the aircraft is termed the lessor. The lessor does not share profit with the lessee. After paying for the wet lease of the aircraft as agreed, whatever profit accrues from the operations belongs to the lessee, that is the airline that hired aircraft with crew, maintenance and insurance.

“Other issues in wet lease include: line maintenance which implies the lessee takes responsibility to give light maintenance in the line of operations in the stations. Utilization is usually calculated in block hours not in flight hours. Block hours mean from engine start/chokes off to engine off/chokes on and flight hours means from take off to landing. It depends on the negotiation capacities of the parties involved,” Akpan explained.

Recently Arik Air, Aero Contractors have engaged in wet leasing of aircraft, which THISDAY learnt from industry insiders is easier than dry lease for Nigerian airlines “because lessors will not be willing to give you aircraft on dry lease, which said means “you hire just the aircraft and you provide the crew, the maintenance, and the insurance.

He said that whether dry or wet leased, every aircraft is operated in compliance with the air operations specifications certified and approved by NCAA.
In order to increase capacity for the Christmas season, there are indications that more Nigerian airlines would lease more aircraft.



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