Tuesday, 11 December 2012

Jet Age in Nigeria: What it takes to maintain private jets * 20 more jets expected in 2013

Nigeria, the worldover, is believed to be a country with stupendously rich men and women, who will stop at nothing to show off their wealth, legitimate or not. For a nation, where majority of the citizens live below a dollar per day, having scores of private jet owners is a sharp and painful societal imbalance.

As floods and bombs ravage cities in the country, the rich fly over the "trouble spots" to conduct their businesses in calm areas or even overseas. They enjoy VIP treatment, both in Nigeria and overseas, as they usually go through the fast-track lane in any airport they land.

In the midst of ravaging poverty, Saturday Sun investigations have revealed that the number of political office holders, ranging from the president, state governors to ministers and other wealthy Nigerians moving around in private jets has suddenly jumped up in the last two years, raising concerns about how much is spent annually on these executive jets now more than the number of airplanes on the fleet of commercial airlines in the country. Further findings reveal that a moderate estimate of a whopping N78 billion is spent annually to maintain this air luxury by the nation's wealthy and powerful class.

What began like an exclusive preserve of the very wealthy Nigerians (less than 20) early in the millennium, has become the order of the day today, with bankers, church leaders and musicians joining the fray. Findings show that the weakness of the domestic operators and the sharp reduction in the number of airlines and airplanes also contributed to the desire to own private jets.

From January till date, four domestic airlines (First Nation, Chanchangi, Dana and Air Nigeria) have vacated the domestic scene, taking with them about 22 medium haul jets. Today, the country has only five airlines (Arik Air, Aero, Medview, Overland and IRS), with a total number of 36 aircraft serving domestic, regional and international routes daily.

Experts have predicted that these remaining surviving carriers, already neck-deep in debt and other operational crises, might close shops in months ahead, except the government takes pragmatic steps to keep them afloat. The concomitant effect of this is that airlines no longer keep to their schedules.

Very busy businessmen and wealthy pastors have had to languish at various terminals for up to 10 hours, as they waited impatiently for a flight of about 45 minutes. With incessant flight delays and cancellation robbing them time and money, some considered going for executive jets.

The Media Assistant to the Director General of the Nigerian Civil Aviation Authority (NCAA), Sam Adurogboye, told Saturday Sun that the regulatory agency now has 77 private jets in its registry, which are based and operate from Nigeria, in addition to the 10 in the presidential fleet solely used by the president and his family, the vice president and his family as well as the Senate president and speaker of the House of Representatives.

Out of these, 10 are Nigerian registered, while 67 carry foreign registration numbers.

With 77 jets, it means wealthy Nigerians have splashed at least $4 billion on luxury airplanes, using $50 million as the average cost of each aircraft.

A private jet goes for between $40million and $65million, according to the websites of major private jets manufacturers, like Bombardier of Canada; GulfStream and Hawker Siddley of United States and Embraer of Brazil.

Aside market forces, the cost is determined by the configuration (seating arrangement), type of luxury finishing, onboard entertainment system and navigational facilities, engine capacity and general operational efficiency.

For any Nigerian bourgeoisie, the type of executive jet owned (not house) is the true reflection of his/her social standing. From oil magnates to governors; pastors to politicians, business moguls to celebrities, the insatiable quest for executive jets is glaring.

Pastors that cruise in executive jets include Pastor Enoch A. Adeboye, Rev Matthew Ashimolowo, Pastor Chris Oyakhilome, Bishop David Oyedepo and latest entrant, Pastor Ayo Oritsejafor, among others.

In the secular world, top businessmen, like Alhaji Aliko Dangote, Africa's richest man; Chairman of Globacom, Dr. Mike Adenuga; Chairman of Zenon Oil, Femi Otedola; Mr. Ifeanyi Ubah, chairman/CEO, Capital Oil & Gas Industries and Executive Chairman of Arik Air, Sir Arumemi Johnson-Ikhide. Some state governors and top bankers also cruise in luxurious jets.

The popular brands in Nigeria are Gulfstream 450, 550 and 650; Bombardier Challenger 604, 605; Global Express; Embraer Legacy, Falcons and Hawker Siddley 125-800 and 900XP.

The Gulfstream IV, according to experts, can fly up to 45, 000 feet above sea level (10, 000+ more than most commercial aircraft). At that level, the jet goes much faster than any commercial airplane in the sky, thus drastically reducing flight time. On the presidential fleet are two Falcon 7X jets, two Falcon 900 jets, Gulfstream 550, one Boeing 737 BBJ (Nigerian Air Force 001 or Eagle One), and Gulfstream IVSP.

The rapidly growing market has also made the manufacturers of these luxury brands to fall over themselves to market their premium products, as Nigeria is reportedly the second most lucrative market after China. Also, there are strong indications that the economic downturn in Europe and the United States has made Nigeria and China to become the best choices for the manufacturers.

A top aviation official said: "Two countries buying private jets now are China and Nigeria. Europe and America are going through turmoil; so, their people are no more buying. This accounts for the trend that whenever some of the private jet manufacturers develop any new jet, they take them to Nigeria and China. The private jets in Nigeria are owned by top politicians, oil magnates and business moguls. There are still several private jets on order by wealthy Nigerians. The buyers and the sellers always notify us at the NCAA because we must certify the airplane, especially if it'll be registered and flown here. We've been notified for the ones that will be purchased in 2013. Some of these airplanes also come with foreign registration credentials."

Virtually on a monthly basis, the manufacturers fly in their latest series and dangle them before salivating Nigerians, who, without hesitation, begin to place orders. Saturday Sun gathered that about 20 airplanes would be delivered to Nigerians in 2013.

In Nigeria today, the rising case of kidnapping, terrorist attacks and general feeling of insecurity have forced scores of wealthy Nigerians to go for executive jets.

Further investigations reveal that the choice of foreign registration is to avoid the prying eyes of the NCAA in oversight functions, which, in a way, may reveal, in some cases, incriminating information about the owner(s) deals. But with foreign registration, oversight functions rests, to a large extent, with the country of registration and where safety is violated within the Nigerian airspace, NCAA "detains" the crew and seek recommended punishment from its counterpart in the country the airplane is registered. But outside safety issues, the airplane and its owner are insulated from any form of Nigerian regulatory scrutiny and that gives the owners a high level of privacy.

Further findings show that from late 2010, when cases of bombings and kidnapping became rampant, till date, about 35 private jets have been acquired by wealthy Nigerians. The scenario is that they live in fortified mansions, ride in convoy of choice armoured plated vehicles and then cruise in executive jets.

With this style of operation, there is little exposure to the public, where they are vulnerable to kidnap or attack.

Analysts also say that unreliable schedule from ailing domestic operators and few numbers of charter operators has driven the bourgeoisies to gun for private jets.

A pilot of one of the executive jets told Saturday Sun: "My boss doesn't see the type of airplane he wants to fly among the charter operators. He likes luxury jets but most of the charter planes are just normal basic jets. If it were to be a car, I'll say he likes the limited edition or the type you call the 'Full Option.' So that's what the Challenger offers. He can work and sleep onboard without really missing his home that much," he said.

A visit to the private terminals in many airports across the country shows alluring display of various executive jets belonging to Nigerians. Some of them are owned by popular citizens, while the ownership of others is shrouded in secrecy.

A top aviation source said it is difficult to get the real identities of owners of some of the private jets in Nigeria because, at times, they buy them through several channels, including companies in the US. The foreign company then sells or leases it to another company in Nigeria and from that company they are acquired by Nigerians.

A top source at the Aviation Ministry said that most of the acquired jets are given to charter operators to manage and maintain and the owner pays accordingly.

The source further said that private jet owners have flooded the Federal Airports Authority of Nigeria and the Nigerian Civil Aviation Authority (NCAA) with requests for space for maintenance facility and parking.

Conflicting figures

Various schools of thought have picked holes that only 77 private jets are officially flying in the country. There is a strong belief in some quarters that wealthy Nigerians own about 200 executive airplanes. Such is the belief of the Nigerian Institute of Estate Surveyors and Valuers (NIESV), which reportedly said Nigerians have invested about N1.3 trillion on private jets in the last three years, even as it stated that the number has jumped from 50 to 200 within the same period.

However, setting records straight, the Director General of the NCAA, Dr. Harold Demuren, said most of the luxury aircraft seen in various airports in the country belong to foreign investors, who fly in them to facilitate their businesses.

In a telephone interview with Saturday Sun Wednesday, Demuren said the luxury airplane owners do a lot of shuttling, both within and outside the country, such that their itinerary cannot be accommodated in the schedule of the local airlines.

He said: "Some of the private jets you see are not owned by Nigerians. They are owned and used by foreigners who are mainly investors. You know the government is now doing a lot of businesses with foreign investors and they often prefer to come in their private jets. When they come here, they may also have to shuttle within the country too. It's their business and all we are concerned is that they follow the rules and operate within the laws of the land. They must also comply with safety regulations as well.

"Our Nigerian businessmen too have private jets. You cannot stop them from acquiring it. They need it for their businesses. Look at Aliko Dangote, Femi Otedola, Mike Adenuga and others. They have these jets and they travel overseas often and we cannot stop them. Their businesses have international links. We have to be careful so that we don't insinuate something wrong about it."


Aside the questionable circumstances in which the private jets are acquired, a FAAN source said the owners are not paying their bills accordingly. In other climes, private jet owners are billed heavily, since their jets come under the luxury items list, which attracts extra charges.

"Reverse is the case in Nigeria. Some of these big men, most times, do not even pay the appropriate charges. They enjoy these airport and airspace services almost free of charge. If you touch them, they scream and run to higher authorities," he said

Maintenance and crew

According to aviation experts, the wealthy men who afford brand new executive jets do not spend so much on routine maintenance, except for fuelling or other charges. Others also say airlines spend between 15 and 20 per cent of the cost of an aircraft on its operation annually. They say that averagely, a little less than one-fifth of the cost of the plane is spent every year on insurance, flight and cabin crew, maintenance, fuelling, catering and training. In Nigeria, most of the private jets are less than five years old. This means that in a year, an average of N900 million is spent to maintain each of the 87 executive jets in the country bringing the total cost to over N78 billion annually. This is in addition to the cost of chartering airplanes by some state governors, ministers and wealthy individuals who are yet to take possession of their own private jets. Depending on the number of hours, type of jets and other factors, some of them pay as much as N2 million to charter a plane for a local trip.

However, a source at the NCAA said the cost of overseas maintenance will be about $250,000 per airplane annually, as the owners usually want them in top shape, so as to respond to urgent duty calls. By simple permutation, it means the 77 airplanes on NCAA's registry will gulp about $20 million per year on maintenance alone.

Aside the mandatory checks, each private jet is expected to be manned by a pilot, a first officer and at least one cabin crew at any given flight. For every private jet owner, he has up to 10 staff attached to the airplane. Aside the aforementioned, there is also a certified maintenance engineer, a dispatcher and other personnel, who may not compulsorily be on the flight but are on the payroll of the owner.

The pilots and cabin crew are expected to go for their regular re-currency training overseas. They are also to go for their mandatory simulator training every six months all at the owner's cost.

An airline's maintenance engineer who does not want his name in print said the cost of general operational cost of operating a private jet is enormous.

"It's not a stuff for the boys. It's really for the big boys. Too many payables. You have to pay the crew. Some of the pilots are on N2million monthly. Some are on N1.5million and others on N1million. It all depends on their level of experience. Interestingly, you must pay the pilots, whether they fly or not. You must keep them on your payroll. You can't run a permanent ad-hoc arrangement. You must have a structure. You also pay the cabin crew about N400, 000. You also pay other ground and administration staff. Then you come over to maintenance that is done overseas. You also do your documentation. You pay for parking and landing, fuel, hotel accommodation (when they fly overseas or outside their base), training, navigational charges and taxes. The general operational cost hovers around N40 million monthly (including salaries) if the owner makes only few trips. The cost will be higher if the owner travels overseas more often. I really feel for my boss, but he has the money. But to me, anyone who doesn't make money carelessly cannot own a jet. In Nigeria, no one asks such question", he said.

Money spinning

According to the former National President of Airline Cabin Crew, Olumide Ohunayo, who is also an aviation consultant, developed countries and some parts of Africa see private jet owners as cash cows of the aviation sector. This, he said, is because they enjoy luxury service.

"So, all the charges commercial airlines or charter operators pay are far lower than what is slammed private jet owners. The idea is to limit the usage to the very affluent. The charges are also high, so that it doesn't become everyone's affair and congest the airspace and the terminals. The high charges they are made to pay are used to fund civil aviation. More so, they do not ever benefit from concessions, subsidies and other palliatives of government. Rather, they are to pay higher duties," he explained.

Concluding, he said: "The big question, however, is: are we replicating all these in Nigeria? Are we toeing the lines of others and do things, as we should? I do not think so. With the present rate of acquisition, you can be sure the system is being short-changed."


* Pastor Enoch A. Adeboye

* Rev Matthew Ashimolowo

* Pastor Chris Oyakhilome

* Bishop David Oyedepo

* Pastor Ayo Oritsejafor


* Alhaji Aliko Dangote

* Dr. Mike Adenuga

* Mr. Femi Otedola

* Mr. Ifeanyi Ubah

* Sir Arumemi


Culled From: The Sun

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