Despite B737 Max Aircraft crashes, Air Peace will maintain orders
Mr. Allen Onyema, Chairman of Air Peace, in this interview with OLUSEGUN KOIKI, speaks on the B737 Max aircraft the airline ordered for, the impact of COVID-19 on the aviation industry, and the 18 Left runway of the Murtala Muhammed Airport (MMA), Lagos, among others. Excerpts:
Few years ago, you made some orders for aircraft and, just recently, the orders are coming in gradually and this is changing the fleet structure. Let us have an update on the current fleet size and how this good development is impacting on the aviation sector?
When we started in 2014, it was part of our business plan that come 2017, we should start acquiring wide-body aircraft for international operations. It was part of our business plans to start venturing into acquiring brand new planes that will feed the kind of operations we will undertake come 2018. So, we have lived up to those expectations. In 2018, we made a firm order for 10 brand new Boeing 737 Max. This means that we paid. We didn’t just bring pressmen together and announce the order. We paid and you were all witnesses to that. The order was also witnessed by the American government through their embassy. The order was signed in the embassy and payment was made for 10 brand new 737 Max aircraft. As a result of the unfortunate situation with MAX, we started thinking of what to do in the interim. Besides that, the idea of procuring the MAX was not for 60 minutes journey, it was not for going to Lagos-Owerri or Lagos-Akure. The MAX is an aircraft that should do at least four hours flights before it lands. If you start using it for 30 to one hour journey, you will only be building cycles on the engine and the engine is very expensive. We plan our acquisition very well to tailor the kind of operations we want to do. At the same time, we needed aircraft for long haul flights, then we went for Boeing 777. We acquired three B777 aircraft. Then, we needed something that could fit in for both regional and at times, some Southern European countries, we went for the Embraer 195-E2 aircraft, which is the latest aircraft development in the world now. We committed to buying 30 brand new planes in 2018 and 2019; however, we made a firm order at the initial stage for 10 aircraft. Fidelity Bank was saying few days ago that one thing they liked about Air Peace and me is my financial discipline and prudence. We paid for 10 aircraft, which was celebrated in Mauritius. We became the launch customer of that fleet size in the whole of Africa. Some months later, we discovered that we could pay for additional three. That was when our chief of finance represented us. She went to Dubai; at the Dubai Air Show, she signed and made payment for another three, bringing the total to 13 firm orders. When we paid for 10, we had purchase rights on 20, this means that whenever we want to buy more, we would buy at the same price we were buying the other ones, whether there are price differences or not because we had committed to it.
With the two crashes of B737 Max aircraft, what do you think will be the fate of the aircraft in the market and your orders?
One thing I have to tell you is that MAX will come out as the safest aircraft ever made. I have no doubt that Boeing is up to it. Boeing is one of the world’s greatest aircraft manufacturers. They will surely get it right. And by the time they finish with the MAX, it will become one of the world’s safest planes ever made. There is no doubt about that. We are not going to cancel our orders. We are going to stick to the orders. If for anything, we are going to increase our orders when the time comes. Whenever they bring out the planes, we will watch and see and kick in when others are kicking in.
The MAX is a beautiful aircraft. Some other plane makers have passed through that kind of difficult times in the past and today they are flying safe.
Before the outbreak of COVD-19, you had a lot of plans for Air Peace, how have you been able to adjust overtime?
Before the advent of COVID-19, we had planned to bring in more Embraer ERJ145s because of the niche market. We want to serve the underserved airports and we wanted to open up our country and the best way to open up our country is not by using B737s. It is too big to go to some places. You need to start building up some places. You can’t carry 737 aircraft and be carrying 10, 15 or 20 passengers. We needed to bring in more Embraer 145s. We have eight of that type already, but because of COVID-19 and the challenges in sourcing forex, we couldn’t go for more Embraer jets. We decided to face issues of maintenance. We were spending a lot of money, yet no revenues coming in. That was why some airlines parked up. So many airlines abroad parked up within weeks. So, Nigerian airlines tried to even survive. So many airlines were affected because of COVID-19. Remember the case of some aircraft abroad undergoing services there because of the lockdown and people were no longer working. At a time, I had about 21 planes undergoing C-check maintenance abroad and that depleted our capacity so much and that was why you saw disruptions in our operations. Before COVID-19, if you had a bird strike on one plane, the recovery period was very short because we had other planes on stand-by to move in immediately. This year alone, we had about eight bird strikes and that means eight engines were affected and we are talking about $16 million. So, these are the issues and people do not understand. COVID-19 devastated airlines worldwide and Nigeria is not immune from this. Air Peace is even the worst hit because we sent out planes in October 2019, hoping to get those planes, at worst, back by first week of December, so they could do the yuletide operations. But the lockdown had started over there at the time. So, they were not working on the aircraft as they were supposed to work on them, we ended up not getting them.
Despite the challenges of COVID-19 that made many airlines close shop abroad, Nigerian airlines are still operating. What is the staying power?
I think it is the resilience of the Nigerian person. We are a very resilient people. We always find a way of surviving. We do not know what we’ve got and sometimes we don’t appreciate ourselves. The COVID-19 devastated the aviation world. Most airlines abroad closed shops and a lot of them got huge support from their governments and financial institutions out there. This was the only thing that helped them remain afloat. Over here, with the little we have got, we are still flying and it has to do with the resilience with the Nigerian person of ‘Never Say Never.’ For Air Peace, everything I have worked for in life is in this airline. All my estates are in this airline, just to make it survive. Because I always say that I can never meet my maker with what I have, but the legacies we leave behind is what matters. That is why in Air Peace I do not divert the funds; instead, I bring in more money from my other personal sources to continue to support the airline.
Take us back to few years ago when your airline had challenges accessing West Coast routes. What have you done to come over those challenges in the West Coast in terms of aeropolitics, especially in the Francophone West African countries?
It is very unfortunate. You know, Nigeria is a signatory to Single African Air Transport Market (SAATM). It is a noble idea by the Nigerian government, which is very good when you abide by your obligations to treaties. But these countries in the West Coast, with the exception of Ghana, don’t. The rest will give you hell, especially the Francophone countries. At first, they didn’t even want to give us landing rights to come into their countries. Meanwhile, they are coming into Nigeria. Air Côte D’Ivoire come here about four times a day. Asky comes as they like. When we applied to Togo, you know the story; they didn’t want us to come in until we wanted to go to court. The same thing happened in Togo. When we went to set up our office there, they almost charged us $10,000 per landing. They will use their ground handling services and all manner of tactics to make it unviable for you. However, the Nigerian government has started kicking in. The Federal Government is following up and, once you complain, they give it back to you. I am very happy with the Federal Government’s stand these days. If you do any Nigerian investment anyhow, they do you anyhow too. You can see what is happening between us and Emirates. I applaud the Federal Government of Nigeria for protecting indigenous investments. These countries are very powerful, for the regime to look in their eyes and say no; I applaud the Federal Government, if not for any other thing. This is because they could have swallowed all of us. The West Coast countries will be in for a shocker. Air Peace has applied to them that we want to resume our operations. Because of COVID-19, they shut down Senegal, Gambia, Sierra Leone, even Ghana, Monrovia, and others. Now, we have started with Ghana. In the next few weeks, we will start hitting Senegal, Banjul, Freetown, Monrovia. Of course, we have added Doula and Congo. We are going to Libreville, Malabo and all these places. We have the equipment.
Let us look at 18L domestic runway – there’s no airfield lighting there and that rules out the option of night flights. How much is Air Peace losing due to the unavailability of that facility and what is your advice to the government?
There is no doubt that our airlines are suffering under that kind of situation whereby after 6:00 O’clock, instead of landing on the domestic runway, you go and land at the international and taxi for another 15 minutes, burning fuel, breaks. It is a lot of money. Government should look into activating or putting the right runway lights on 18L it is very important and it will help the airlines save a lot of money. The good thing is that we have a minister who is interested in changing the dynamics. Sen. Hadi Sirika has done a lot. I plead with the Federal Government to give him funds to do 18L because that is the busiest local airport in Nigeria. And we should be able to land at that runway in the night.
