Wasting $1bn on aircraft maintenance every year hurts — Balami, President, AAMON


The Managing Director/Chief Executive Officer of Seven Star Global Hangar, Mr Isaac Balami, who is also President of the Association of Aircraft Maintenance Organisation of Nigeria, speaks to JOSEPH OLAOLUWA on some of the issues affecting aircraft maintenance in the aviation industry

The issue of Maintenance, Repair and Overhaul has continued to drag on in Nigeria; a lot of airlines have complained of the cost of maintaining an airline in the country. How can we address this issue as a nation?

It pains me so much to see over a $1bn wasted on capital flights every year in the region. This includes the military, paramilitary, scheduled and cargo airlines. We are depriving ourselves the opportunity to grow and also our youths are jobless. We export our jobs everywhere when we have competent hands in-house that can do these things. The enabling environment is what is lacking.

For example, Seven Star Global Hangar has an MRO licence, like NCAA, that is still valid. We are working on renewing it again for another two years. We go to bank but the nation has no system to support people in the business. If you are not a billionaire or son of a minister that has money stockpiled somewhere, you can never start this business. The people who have money are not interested in investing in aviation.

The government disbursed N5bn out of proposed N27bn; how much did you receive?

We are still hopeful because we were promised to be carried along. The first batch that was given, car hire got money but no aircraft maintenance facility that I know of got anything. I am the president of the Association of Aircraft Maintenance Organisation of Nigeria and I know what I am saying. It is so sad and painful and frustrating. Since we are on talking terms with the ministry, hopefully, they would carry the MROs in Nigeria along. The second major cost in aviation aside from aviation fuel is maintenance.  When you want to give out palliatives and you don’t carry the maintenance organisation along, it means there is no plan for them to grow.

Some foreign companies were selected as successful bidders for the MRO project and aviation leasing by the Federal Ministry of Aviation. What do you think about that?

I will continue to say it as it is. Nobody from any part of the world will leave his or her country to build a competitive and well-positioned Maintenance Repair and Overhaul facility for us. It was a dream when Aero Contractors started their MRO, people did not believe it would  happen. Today we have done C-check and D-checks locally. Indigenous companies can build a hangar. If you need equipment, you can order from the original manufacturers. We have the best training.

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We also bid for the national MRO, yes we didn’t get it but we don’t feel bad because our time will come in the future. The issue of competency is out of the question; I trained in the US with a host of other engineers, they finished with distinction and run big airlines in the world but when we come back home, we don’t believe in ourselves. It is about orientation. This represents 30,000- 50,000 jobs of well-paid employees indigenously.

How can crashes be prevented in the future?

We must understand that the airworthiness of an aircraft is the responsibility of the operator and not the minister nor the Managing Director of the Federal Airport Authority of Nigeria. The international and local regulations are clear about that. The Nigerian Civil Aviation Authority is only providing oversight to ensure that there is full compliance. For example, as we are talking now, more than 60 aircraft are being fuelled at the same time and you cannot tell me that NCAA personnel will inspect how they are fuelled. They can only do inspections and unexpected visits.

All airlines are safe because NCAA is on its feet and compliance level is high. What happened in Quorum was a human factor and every accident or incident serves as a lesson for others. What happened to Quorum is a lesson for helicopters everywhere in the world. Aviation is the safest means of transport in the world.

How can operators manage their fleet for optimum performance with respect to old aircraft?

Aircraft is aircraft whether it is old or new. There is a minimum level you can’t go below. British Airways has a 747 that is about 30 years old but still flies to Abuja from the United Kingdom. Age is not an issue, what is important is if it is well maintained. The older the aircraft becomes, the more the cycle of maintenance is being increased. A brand new aircraft goes between $70m and $100m depending on the configuration and the specification. How many airlines can afford a new aircraft? This takes us to the need for the government to support aviation. Some airlines including British Airways and Lufthansa still use fairly-used aircraft and are doing well. What is important is the maintenance and compliance status of the aircraft.

Last June you and the Ooni of Ife, Oba Adeyeye Enitan Ogunwusi, facilitated a flight for stranded Nigerians. A few challenges occurred in the process. Can you tell us about it and how you solved it?

I was in my office when people came to me begging that Air Peace was denied landing permit in Canada and that Arik also could not get landing permit into Canada and several Nigerians were stranded. After about two to three weeks of insisting and considering the personalities involved, which included someone like the Ooni of Ife who subsidised the ticket for that particular operation, I supported it. I did not pay for the flight, my role was just to get the landing permit and to arrange and giv advice as a third party.

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We did our part but because the aircraft, Wamos Air, could not come back, people were asking for refund. So the few people that paid, about 10 per cent paid through Seven Star and those are the ones we are refunding. Hopefully, in the next few months, we will refund completely. The ones that paid through Olofin Microfinance Bank and other sources are following their money.

Wamos is in court as we speak for not fulfilling the contract. They went to the US and did not come back to Nigeria with the passengers so the Olofin Microfinance Bank and its partner are currently in court in the UK. They are claiming about £1m in damages for the embarrassment. The Ooni paid £480,000 for a return flight. He sold the ticket for $1,200 instead of $1,700 to each Nigerian.

Tell us more about your new airline and when you intend to float it?

The helicopters are already on the ground. We are going to start with them. We are with the NCAA now and hopefully, in the next two months, we should be wrapping up to start operations. Some jets are trapped in the United States due to the COVID-19 pandemic. We intend on doing charter.

Is the process for floating an airline after a pandemic advantageous now that you have seen the challenges other airlines faced last year? Is it any different from floating it a year before?

We believe that COVID-19 will end and we will go back to our normal lives. Secondly, every business has its model. Our model is going to be profitable, we are not coming to compete head-to-head with existing scheduled operators. Look at what Overland is doing, you hardly see them struggle with other airlines. They have been operating for over 10 years. Aero Contractors is 62 years old and had no problems until it began scheduled operations but when they were into charter, like Bristow, they had no issues. Caverton Helicopters in 2008, 2009, 2010 recession were posting profits for five years. You need to know your business model.

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Several airline operators have complained that the charges they pay agencies in the sector, alongside operational costs, and the pandemic have impacted their earnings. How can new airlines better navigate this path on the way to profitability?

For every ticket you buy, a minimum of 40 per cent goes to different government agencies together. When you buy a ticket, you think you are paying N40,000 but the airline is getting half and these are the issues airlines go through. Multiple taxation is quite high but without that money being paid to the agencies, they can’t function. Government has to reduce the pressure on the airlines and seek more ways of generating revenue.

How best can the ongoing issue of airport concession be solved?’

The government does not have the money. We need an airport that can compete. The population keeps increasing with more passengers. I support the concession but I want the government to be fathers and mothers to the aviation workers and be honest and fair. The concession should bring more jobs and it should be transparent. Change is something people will resist but the ability of the government to educate the aviation workers is key.

What is your outlook for the sector in 2021? Will it bounce back before 2024 as projected by the International Air Transport Association?

As long as people cannot attend conferences and events as it were, the hotel and aviation business will be down. What gives us activity is when there are conferences here and there. There is still fear and meetings are now being held on Zoom. Until the issues of vaccine is being answered properly and the questions are answered and there is openness in the entire global system, it will take time for life to return to normal. What is more important is that we have a way of surviving, if we do what we need to do, we may pick up faster than expected.

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