Mr James Ominyi is the head of Aero Contractors Aircraft Maintenance Organization, (AMO). In this interview with SHOLA ADEKOLA, he spoke on sundry issues including the airline’s aircraft maintenance facilities, infrastructural deficit among trending issues. Excerpts…
Importance of aircraft maintenance hangar, MRO facilities
In the aviation industry in Nigeria today, the MRO business is growing, but it’s mainly private sector driven. Aero contractors started the MRO in 2017, at a time when its airplanes were grounded all over the world. If you remember, in 2015, the exchange rate suddenly changed from N160 to about N500, 2015 and so airlines were unable to carry out maintenance.
Maintenance that would have cost a million dollars, which would have been N160 million naira, suddenly became N500 million So airlines had difficulties, So it was at that point that aero contractors established the MRO, and then the business grew beyond our expectation.
For example, it was like you built a hospital in a community, Where there are no hospitals, and then suddenly you have a lot of patients, So when the MRO was established, we had patronage from Swift Airlines of Spain, we had patronage from Passion Air of Ghana, we had patronage from Congo Air of Democratic Republic of Congo, we had patronage from Congo Brazzaville and the neighboring countries and before COVID, we were receiving requests from Chad and from Sudan. But somehow COVID ended that discussion. Since the Aero MRO was established, we have seen the establishment of other MROs. Generally, it doesn’t have to be a big MRO, It could be even a small AMO for battery charging but we have seen that the MRO, the business is actually low.
Considering infrastructural deficit, the lack of skill, that’s labour, what are the technical challenges and how can that be surmounted in Nigeria?
One of the problems is tools and equipment for every aircraft type, there are specialized tools and equipment of course there are general tools that you can use but for every aircraft type you have to have the jacks, you should have the special tools, you should have the air data testing equipment and the different probes and so on and these things are not cheap, you can’t buy them at Oshodi market, you have to spend hundreds of thousands of dollars. For example the 737 classic jacks cost about $100,000 and it took a long time for us to get them in $100,000 so if now you also want to perform maintenance on Embraer 190s and 170s you have to get the specialised ground service equipment for those airplanes and that is a big challenge because the dollars don’t come that easy.
On the tooling and equipment, several years ago you could take oil samples in bottles send them out to the lab, and then do the analysis of the oil, and then get back the results maybe after two weeks or thereabouts, before you can know what to do with the engine or with the equipment. But now there are equipment that instantly can take the sample and do the analysis.But is it cheap? It’s probably $150,000, and if you multiply that by N1,700, then you are talking about hundreds of millions of naira.
Then training of personnel is there. For every aircraft type, you have to train the personnel and again, that is not cheap, it’s not easy. You have to demonstrate to the regulatory authority that you have the capability in terms of manpower and equipment to maintain those airplanes and currently, even the Boeing 737, if you look at the Nigerian environment, is probably Air Peace and Aero Contractors operating the classics. Arik Air operates maybe one or two NG, and then Air Peace, lease, airplanes, 737 NG and we are talking about other developed countries or developed societies where people are operating Max.
The other day, Ethiopian came here and they were like laughing. How come Nigeria as being the richest country in Africa, is still operating classic, So we are still far behind, to be honest. These are some of the challenges, training of personnel, and then equipment and tools.
Looking at how the world is today, can’t technology help to solve this problem? There’s automation of the processes and even being able to connect to the other MROs outside of Nigeria to share ideas. With Artificial Intelligence (AI) and all of that can’t we have that benefit from Nigeria to the world or the world to Nigeria?
Definitely with the artificial intelligence taking over everywhere, that is an important aspect of what is required.
But I am sure you know that we are still way back behind in that aspect, whereas countries like China and the U.S. and Japan have developed so much in that area, I believe we are still lagging behind and probably our own level is to the point of getting CHAT GPT to help you with projects and all that, but in terms of aircraft maintenance, itself we are way behind. While I agree that, yes, it can help, but we are still behind.
What I can tell you, for example, is before, as of 2017, we were tracking man-hours physically. We contacted a software developer, Ramco, that assisted with using scanners so that when you pick up a task card, you scan it, you go do the work, and then when you finish, you scan, and then it is able to tell you exactly how many hours you spent on the job. Even if you are going on break, for 30 minutes, you scan yourself off, when you come back from break, you scan again, it is able to track the duration.
In terms of tooling, yes, no MRO, I have been to Lufthansa Technik, Malta, I have been to Egypt Air Maintenance and Engineering, I have been to Shannon in Ireland, No MRO has everything. No MRO will afford to buy every equipment and store them, lying mostly waste until you need them, So you collaborate on loan tools and equipment, which we have been doing with Ethiopians and South Africans, because it will not make any sense for an MRO to buy everything all at once, but you can buy them gradually and then the ones that you don’t use very often, you can loan from other MROs. Yes, there is collaboration.
How profitable is the business or what strategies have you put in place to ensure that you’re profitable as a business in Nigeria in terms of the challenges that you face?
May I say something concerning the issue of regulatory? I believe the regulation in Nigeria, whereas it is actually adopted from the international regulations. If you look at the implementation of the regulations in Nigeria, it is skewed to the advantage of MROs and to the disadvantage of the operators and I’ll give you an example.
MPD may tell you, maintenance planning document may tell you the interval between C-checks is 4,000 flight hours and then the Nigeria regulatory authority will impose a calendar and the calendar may be 18 months or 24 months.
Irrespective of whether you have flown 4,000 hours or not, you will be required to perform maintenance, if you are grounded for an engine, maybe you have flown 1,300 hours, You are grounded for an engine and it takes you three months to get an engine, calendar is counting and once it is 18 months, then whether you have attained the 4,000 hours or not, NCAA will require you to perform the next C-check.
Secondly, as for the 2023 regulation, NCAA requires that all operators must have an MRO by May 2025, So if you are not able to establish your own MRO, then you have to rely on an existing MRO. So these regulations, if implemented, are skewed to the advantage of the MRO and to the detriment of the operator.
Now, concerning profitability, I can tell you that the MRO business is profitable because looking at our own situation without Aero MRO, Aerocontractors would have been dead and gone so many years ago. I know of an operator that sent an aircraft for C-check that would have cost $600,000 and they ended up paying $3.2 million. But we do the C-checks in-house if Aero contractors, takes an airplane outside the country and is going to pay $3.2 million per aircraft for C-check every 18 months, this company will have been dead. Apart from the heavy maintenance, we perform line maintenance and all-schedule maintenance for the company as well and for other operators. So is it profitable, particularly for Aero? yes, it’s profitable, but it was a wise decision to establish Aero MRO. I can also tell you that when we went to Congo, Kinshasa they told us that the flight to Lagos was two and a half hours, and that they have been performing maintenance in South Africa five hours away, it was cheaper for them to come to Lagos in two and a half hours and burn less fuel and have their maintenance done. Passion Air of Ghana used to go to Kenya five or six times a year, hours away, but to Lagos because they use Dash 8, probably one hour. So they save four hours or five hours coming to Nigeria. So profitability is actually potentially there, but there must be sustainability to make the profit sure. For example, you don’t have to employ all the manpower you need and pay them continuously. You have to have key staff and then the other categories of staff, every MRO does that, the other categories of staff, you hire them when you have a check for them to perform work on. You also have things like grease and other materials, then you don’t have to waste them. If you limit wastage, you are saving money. We all know that some airlines will taxi with one engine running before takeoff or after landing to the terminal. The fuel saving for that particular flight may be little, but after one year or two years, it becomes much. The same thing with an MRO. If you implement this cost cutting measures, then on the long run, the small, small savings here and there, a little drop here, a little drop there will one day will fill the bucket and it will show. So profitability, yes, I can tell you that it’s profitable. Also our man hour rates are lower. Therefore, it is supposed to attract customers. Because if you actually look at man hour rate of $45, $50 per hour outside and you are looking at our own man hour, we are not going to charge you $80,000 because of
the dollar rate today. So the man hour rate here is lower and therefore it should have been an incentive for airlines to patronize local MRO to make them make profit.
What do you think government can do generally to assist MRO development in this country?
When you import your tools, the customer is ready for you with high tariffs and I don’t think we are encouraging MRO in this country. I personally expect that government should give MRO entities here in Nigeria tax holidays between five to ten years so that they can grow.
I completely agree with you that the government has no business in establishing MROs and they have been talking about this since the days of Nigeria Airways and they have never done it. Maybe they really will do it now. But once they establish any MRO, the bottlenecks of government will kill it.
So it is supposed to be left in the hands of business people in the industry to establish MROs.
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They should only create an enabling environment for these MROs to thrive, you are importing engine and you are being built hundreds of thousands of dollars and sometimes it makes even the the shipping and the operators to undercut the price of those engine you have $1.6 million dollar engine that you are importing and you know that the duties will probably be in the hundreds of thousands so they probably say oh this is $200 000 dollar engine to reduce the the charges so if government creates that break for mros and for airlines it will be one step in the right direction to helping the business to grow.
PAlso the delays in custom clearance item can arrive Nigeria and you need it and then you are spending two weeks waiting for the item to be cleared in custom so how and then you have a turnaround time of maybe 21 days for a check but a tool is stuck with custom for two three weeks before you can get it in so then it affects your turnaround time and then makes it look like you are not an efficient MROsso government should look into those areas and have the airlines and the MRO.
If we want to go forward, we must have data to rely on. In an airline or in an MRO, for example, you perform maintenance, you carry out troubleshooting, you note it down so that even though you have maintenance manuals, when you have a similar incident in the future, your data will help you to solve that problem quickly.
As a matter of fact, not everything is in the maintenance manual, so sometimes you have to walk out of the box. Now, so data is important, but who is responsible for the connection of data? The regulatory authority? Is it the ministry? I can let you know today, that like 737 Classic, the limit of validity is 75,000 flying hours. But no aircraft has reached that level before being grounded or discarded to the graveyard. So truly, we should be able to harvest these airplanes parts from these airplanes, and then recycle them within Africa.
Nigeria is the fifth country with the largest number of airplanes but most of these airplanes are registered in San Marino, in South Africa, in America and UK. They don’t register those airplanes in Nigeria because they know if they want to resell it, the value will depreciate much faster or nobody values a used aircraft from Nigeria. But once it is registered in Isle of Man or South Africa or San Marino, people place value on it because they believe it is a European maintained airplane. So we should be able to raise the standard and the government must create the enabling environment. If you harvest these parts from these airplanes, there is nobody, no workshop in Nigeria that can do bench check of these parts in order to issue a certificate, saying this part has been certified, has been tested.
Because there are different types of certificates, it is either a new part or removed as is or repaired or overhauled.
Now you remove these parts, you cancel them like that and if you have to apply a certificate that this part has been certified or repaired, you need a workshop and how can you create workshop for all types of parts if you don’t have investment? No local MRO will be able to raise money, to establish workshops, to do bench check for every part. So government needs to create the enabling environment and then we need to know who is responsible or who will bear the cat and take responsibility for gathering data, otherwise, there will be a lot of motion, but no movement.
