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Friday, 17 August 2012

Aircraft lease rises as lessors classify Nigeria ‘high-risk’ nation

It is another tough era for operators in the Nigerian aviation sector as wary international aircraft lessors have classified the country among “high-risk nations” for doing business.

The ‘strange status’ for the country is linked to the Sunday, June 3, 2012 crash involving Dana Air’s Flight 0992 in Lagos.

Due to the air mishap which claimed the lives of passengers and crew members, major aircraft leasing firms such as GE Capital Aviation Services (GECAS), International Lease Finance Corporation (ILFC), Cab Tree and Aercap have raised lease on aircraft to Nigerian airlines by over 40 per cent and with a plan to hike it to 50 per cent soon.

Prior to the Dana accident, a B737-500, which was leased for $120, 000, now attracts $200, 000 monthly.

For the new generation airplanes that are in high demand and popularly referred to as Next Gen (that is aircraft below 15 years), the lease, according to airline operators, has risen to $280,000 per month from $160,000.

Some airline chiefs, who spoke with The Guardian on the development, lamented that coupled with the declining passenger traffic, it has become very difficult for them to cope.

The lease remained stable from 2006 to June this year following near impeccable safety recorded in the aviation industry.

Added to this, is the belief in the international aviation sector that Nigerian operators lack skills in negotiating for aircraft lease; which has led to most airlines to be on the receiving end. Most local airlines are said to lack the ability to understand minimum flight hour and engine cycles for aircraft under lease.

Also, the dwindling of the sector, particularly the fortunes of the carriers, has equally made lease rentals to be on the high side because the foreign firms do not trust Nigerian operators enough with their equipment.

Currently, just three airlines among the hitherto big carriers are operating. Air Nigeria was over two months ago grounded over insolvency and safety issues. Dana Air remains grounded after the tragic accident that claimed over 153 persons, while First Nation Airlines has ferried its aircraft to Europe for mandatory maintenance checks. The airline is expecting its A320 airplanes back in the country.

The new high cost of lease is expected to affect the whole fiscal operations of the airlines, as they now find it difficult to buy fuel, pay workers’ salaries and still have enough operating cash.

Source: Guardian


mary gift said...

Abeg make them park well. Dem no perfect

Amarachi said...

Dont tell me that people still fly this miserable air line after that crash.People get mind sha

Anonymous said...

ONOME says......
Does this mean that local air fares would rise dramatically?

Anonymous said...

It serves 9ja right!

Unknown said...

They shld channel these lease fund to our roads n securities..... Cos this news only spell doom for airlines operating in our shores

Unknown said...

They shld channel these lease fund to our roads n securities..... Cos this news only spell doom for airlines operating in our shores

Anonymous said...

In a better country, the government would have nationalized the airline industry but this is naija, it will even be worse if government takes over. God help us!

Anonymous said...

'Only means they'll cut more corners to make a tidy profit :-(

Anonymous said...

The masses would end up with the burden of the hiked lease ... some sad shit ...Ella

Nekky said...

didn't even bother to finish reading the article. abeg these ppl should go and sit down. Nigeria doesn't even experience plane crash as much as some developed countries. statistics speak for itself. mscheeeeeew. i don't blame them tho, we've made ourselves so gullible in dis nation that every Tom, Dick and Harry can shove any crap on us. rubbish and nonsense!!!!

Anonymous said...

Let them announce the new price fares ngwanu. That's the message, let them not colour it so nigerians can absorb it. We will absorb it anyway its put. We know where the news is headed. Useless country.

Anonymous said...

@Mary gift That's exactly the pathetic attitude of our people that I'd making them weary. I don't blame them at all!

Anonymous said...

Dana doesn't operate anymore Linda just used the picture above

Anonymous said...

@Mary gift that's exactly the pathetic attitude of our people that is making them weary. I don't blame them at all

Anonymous said...

good. then we should stop leasing from them and go elsewhere. They aren't a lot of people going cap in hand trying to lease and buy planes.

Allegra said...

Unfortunately, it is the passengers who would end up paying for this with existing services cut to the bare minimum to ensure maximization of profit regardless!!

Musediq said...

I'm sure not a lot of people traveling locally in Nigeria know the implications of this. Basically your fare has just risen to up to 40% too! I have one less thing to worry abt

Anonymous said...

Company's like easy jet and ryanair should come to naija....

this ole governors in the east and south cant they partner with virgin to provide rail service, i mean train service like virgin from london to liverpool, greater Angela

Linda i read on your page some weeks back about new over ground service what happened to that service..from Enugu to anambra-delta-, Enugu to imo-abia- Enugu-ebony things like that just intra connect, with train is fast as well but you need power service to run train.

and security so people dont get rubbed on it. create gates ..

Consult olyster on how to build gates or Euro rail.

first it will reduce car's on the road, secondary more job opportunity for people, third road network preside trade.

inter connectivity trade .

is better than throw the money to Europe after your four years in power you end up in scotland yerd jail for money laundry like uncle ibori n many to come,

Don't this our people see tinubu his money is not been spend outside of west..from his airline to hitv and tvc and many others, don't get me wrong he might have money in europe and america or investment but he has something out there to serve his people.. but eastern governors /southern govt official are all thief . spend the money equipping young vibrant bloods to become militants destroy their life in slum all in the name of politics.

One of the reason that nigeria film Last flight to abuja should be taken serious, if battery could spark light and course such damage little details could serve a life.

i bet you never knew they load battery or something like that on coaches.

Anonymous said...

This is what happenss when corrupt and sloppy life style takes over any nation!
If Dana had taken its maintenance policy seriously,if ppl weren't bribed to overlook mechanical issues on planes,all these crap wud not have happendd! Plus lives wud have been saved! Useless ppl!

Dhayour Olorunwa said...

High risk nation......Is that not right #just asking

Anonymous said...

They are saying the truth.
The local fares will soar high.

Anonymous said...

I wonder how many times you guys have travelled by road after during and even while an accident is happening.Naija....we too ignorant that's our problem.

Anonymous said...

Thanks Nekky. Am happy we have some objectively thinking Nigerians. Good talk

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