in Air Transport / Features

Give Peace a chance

Posted 4 March 2019 · Add Comment

Against an unfriendly operating environment, characterised by multiple airport charges, tough competition and aggravating aero-politics, four-year-old Air Peace remains Nigeria’s fastest growing airline. Chukwu Emeke found out more from Air Peace chairman, Allen Onyema.

Air Peace has just signed a deal with Boeing for 10 B737MAX jets – a move that will expand its fleet to 37 aircraft and prove something of a breakthrough for Nigeria.
After the liquidation of the country’s former national carrier, Nigeria Airways in 2003, none of the local airline operators had the capacity to acquire new aircraft until Arik Air came on board, acquiring Bombardier jets and signing deals with Boeing and Airbus.
However, the most modern commercial aircraft from Boeing, the B777 and B737MAX, were beyond the acquisition capacity of struggling Nigerian local operators until Air Peace, which launched scheduled commercial operations in 2014, took delivery of B777 in February 2017.
The signing of the deal for 10 B777MAXs in September 2018 makes Air Peace the pioneer investor and operator of these types of aircraft in Nigeria.
The airline has also taken delivery of Embraer 145s.
Air Peace chairman, Allen Onyema, said the Boeing deal was informed by the need to fill the existing gaps in international air travel from Nigeria. He added that the decision to acquire the aircraft was not sudden, but constituted part of the company’s business plan; increasing the airline’s fleet to 37 would help to establish its integrity with the banks.
Onyema said the airline has trained more than 40 pilots within the last four years and has been gender-sensitive in its staffing, with a high percentage of women in its management team.
“We bought B777s and ordered the B737MAX because we want to start flying Lagos to Paris direct with the MAX,” he explained. “We want to fly Lagos-Frankfurt, Lagos-Milan and Kano-Dubai. We want to fly from Enugu to London.
“Sometimes, the B777s will fly to London through Lagos. The B777s are meant for China, Johannesburg and London because of the range. The B737MAX takes 180 passengers.”
He said the airline had signed a code-share agreement with a “formidable” Middle Eastern international airline as part of its preparations for starting flights to the region, adding that the undisclosed partner airline operates flights into 36 cities in India and has already started integrating its systems with that of Air Peace.
It targets five weekly flights to Sharjah from Lagos and, subsequently, twice-weekly flights to Dubai.
“We are also working on getting permits to begin operations to Houston, London, Mumbai, Guangzhou-China and Johannesburg,” he said.
The chairman pointed out that Air Peace has already applied for land in Lagos to set up a maintenance facility. It has also demonstrated the premium it places on safety and fleet maintenance by signing a multi-year aircraft spare parts deal with Embraer.
That deal is expected to cover more than 250 components for the six Embraer 145 jets it recently added to its fast-growing fleet in line with its drive to connect unserved and underserved domestic and regional routes under its subsidiary, Air Peace Hopper.
The Embraer deal makes Air Peace the largest operator of Embraer 145 jets on Africa’s west coast.
“Most people have been saying that the west coast market is a goldmine but I don’t see it,” said Onyema. “Movement of businesses is now very slow; the traffic is not really there as we thought.”
Of course, Nigeria has the largest market in the sub-region with many airlines coming into the country.
“Some operate up to 10 flights. The competition is becoming tough,” said Onyema. “We have many airlines scrambling to get few passengers. That is what is happening on the west coast. The market will get better if the right things are done. The way to make the market grow is for us to have uniform charges across the board to make the single African air transport market (SAATM) meaningful.”
Because of Nigeria’s mixed safety record over the last decade, aircraft manufacturers were sceptical about dealing with the country’s airline operators and discussing aircraft acquisition with them. Financial institutions, including Nigerian banks, lost interest in investing in aircraft acquisition.
Onyema said the airline’s lead banker in Nigeria, Fidelity Bank, took a gamble to deal with Air Peace and has not been disappointed.
The airline has taken delivery of two of its four B777s, which have capacity for night flights. Unfortunately, most airports in Nigeria do not have facilities for night flights – the implication being the underutilisation of the aircraft.
The cost implications of unnecessary aircraft on ground (AOG) are likely to get worse when Air Peace takes delivery of the 10 B737MAXs ordered from Boeing. In most Nigerian airports, airlines only operate from 7am to 6pm and close shop. Onyema wants the authorities to equip the nation’s airports with the required infrastructure to avoid a situation where there is an AOG: “Not because the aircraft is faulty but because it can’t fly at night.”
Onyema also pointed out that, although Air Peace has been designated by the Nigerian authorities to operate flights to several regional and international destinations, including Lome, Dakar and Abidjan, the airline has not been able to implement these because the countries involved have strategically taken steps to resist in an effort to protect their own airlines.
For instance, Asky and Air Cote D’Ivoire operate several frequencies into Nigeria but efforts by Air Peace to obtain permits from their home authorities to fly into such countries have been resisted with stiff conditions, including outrageous landing charges.
According to him, when Air Peace applied to the Togolese authorities for permits to fly into Lome, the airline was slammed with high charges after a one-year delayed response to the application. When the airline threatened litigation, the Togolese authorities wrote a letter of apology to Air Peace.
“When we applied to Cote D’Ivoire, the totality of charges slammed on us was more than $10,000. Air Peace has so far, lost more than N1 billion ($2.75 million) in six months operating flights to the west coast,” he said, adding that the airline is spending so much on its west coast operations as a result of the high charges.
“It took the Senegalese authorities two-and-half-years to consider our proposal. Meanwhile, the airline operates flights into Nigeria. We need the government to help us with international aero-politics,” he said.
He called on the Nigerian Government to support local airlines, after designating them for international operations, by insisting that the governments of such designations allow Nigerian airlines to come to their country.
“It’s one thing for the government to designate you; it’s another for the government of that country to give you permit to operate into that country,” he explained.
Onyema admitted that, because of the poor corporate governance demonstrated by some local operators in the past, resulting in failures and a loss of credibility in the international community, his airline had suffered demonstrations of pessimism by some of its stakeholders. He appealed to those who ‘de-market’ Nigeria’s aviation industry, based on the past, to understand that the aviation sector is dynamic, especially with the advancements in technology.
For instance, he explained: “In seeking to obtain certain permits and certifications some years ago, the applicant merely needed to submit documents to the authorities being approached. But, today, most of them request the physical presence of the aeroplanes in question.” This, he pointed out, contributed to the non-operation of the airline’s first B777 for some months, even after delivery.
He noted that some new clearance processes in the sub-region added cost disadvantages to the intending operator.
 

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