Growing Propensity to Acquire Private Jets in the Country

Daily Independent (Lagos)

Rotimi Durojaiye With Agency Reports

21 May 2011

analysis

Hawker Beechcraft Corporation (HBC) is a world-leading manufacturer of business, special mission and trainer aircraft – designing, marketing and supporting aviation products and services for businesses, governments and individuals worldwide. The company recently described Africa and Nigeria in particular, as one of the most promising business aviation growth regions in the world. Group Business Editor, ROTIMI DUROJAIYE (with agency reports), writes that private aircraft ownership is becoming increasingly popular in Nigeria with billionaires appearing to be in a race to outdo one another.

HBC said it has experienced strong growth in Nigeria over the past several years, describing the country as a very attractive market. HBC analysis of industry data shows that just over six per cent of business turbine aircraft in Africa are in Nigeria (joint second biggest market share after South Africa).

Similarly 11 per cent of the business jet market in Africa is in Nigeria (again second biggest market share after South Africa), and around two per cent of business turboprops in the continent are in Nigeria.

From 2008 to 2010, preliminary analysis shows that HBC’s market share grew from 18 per cent to approximately 50 per cent of all business turbine aircraft sales in Africa, with an increase from 12 per cent to more than 40 per cent of the business jet sales in Africa.

In addition, more than half of the 2010 business turboprops purchased in Africa were from HBC, compared to 33 per cent in 2008.

“Parts of Africa are enjoying strong economic growth and the potential for the region is great,” said Sean McGeough, HBC president, Europe, Middle East and Africa (EMEA).

“Given this economic growth and the size of the continent, Africa offers one of the best opportunities for business aviation anywhere in the world. In order to succeed however, we can’t just provide high quality aircraft; we must have proven leadership, strong aftermarket sales support and a robust parts infrastructure, and our position in Africa has never been stronger,” he added.

As part of its commitment to continue to grow its business in Africa, HBC recently strengthened its sales team in the region by appointing Scott Plumb as vice president of Hawker sales for EMEA and Peter Walker as vice president of Beechcraft sales for EMEA.

Plumb has more than 20 years of aerospace sales and marketing management experience gained in a variety of roles with Gulfstream Aerospace, Airbus Industrie, British Aerospace and most recently at VistaJet Aviation Services.

Walker is a long-time veteran of HBC with many years of experience in the South African market, including a distinguished business career working for Imperial Transport Holdings prior to joining HBC.

In 2010, HBC announced an agreement with ExecuJet to further augment its Global Customer Support coverage by providing service for its Hawker products throughout Africa, Australia and the Middle East.

This includes facilities at Lanseria and Cape Town, South Africa and a new facility in Lagos, Nigeria to be opened soon.

National Airways Corporation (NAC) continues to provide maintenance support for HBC’s line of Beechcraft products in Africa.

The company’s headquarters and major facilities are located in Wichita, Kan., with operations in Salina, Kan.; Little Rock, Ark.; Chester, England, U.K.; and Chihuahua, Mexico.

The company leads the industry with a global network of more than 100 factory-owned and authorised service centres.

Investigations revealed that Nigerian billionaires had, in the last 12 months, acquired at least six private jets for a combined fee of about $225million (N33.75billion).

The jets were acquired between March 2010 and March 2011, according to a top official of the Nigerian Civil Aviation Authority (NCAA).

According to the source, those, who recently acquired private, jets are the President of the Dangote Group, Alhaji Aliko Dangote; Chairman of telecommunications giant, Globacom, Chief Mike Adenuga; and Dr. David Oyedepo, leader of the Living Faith World Outreach (Winners Chapel).

The source disclosed that Dangote acquired a Canadian- made Bombardier Global Express XRS in April 2010 at an estimated cost of $45million (N6.75billion).

The eight-passenger aircraft, with registration number, N104DA, according to the source, is currently parked at the General Aviation Terminal (GAT) near the Associated Airlines’ hangar.

The source added that Adenuga also bought a similar plane, a Bombardier Global Express XRS, around the same time. The plane is marked VP-CAN, according to the source.

Two months ago, Winners Chapel acquired a new Gulfstream V for $30 million (N4.5billion), the source said.

Apart from the three latest jets, at least three have been acquired by other Nigerians, each of them was estimated to cost at least $35 million (N5.25billion), the source said. He however declined to mention the names of their owners.

Using conservative price figures, the total cost of the six jets is around $225 million (N33.75billion).

The NCAA source said that the jets, which had been registered with the agency, were usually parked at the GAT of the Murtala Muhammed Airport, Lagos.

The Chief Executive Officer of a chartered airline at the GAT confirmed the purchase of the jets, saying that they belonged to some influential Nigerians and were parked at the terminal.

The Sales Director for Africa, Bombardier Business Aircraft, Robert Habjanic, reportedly said that more Nigerians had placed orders for jets made by the company.

Habjanic said Dangote was one of the first sets of Nigerians to take delivery of the aircraft, adding that a few other businessmen in the country had ordered for the same Global Express XRS business jet, which would soon arrive in the country.

According to sources, Dangote and Adenuga’s Bombardier Global Express are fitted with latest flight facilities and are one of the most luxurious in the world.

The arrival of Dangote’s private jet, it was learnt, coincided with his 53rd birthday in 2010.

The jet, which touched down at the Murtala Muhammed International Airport, Lagos, from Canada in a 9.3-hour flight, it was learnt, could travel from Lagos to China non-stop.

It was learnt that the latest acquisitions by Dangote, Adenuga and Oyedepo were not their first jets. Besides these three, the Chagoury Group, a firm formed by a prominent Lebanese business family, reportedly has two private jets in its fleet.

Investigations show that private jet owners in Nigeria spend at least $52.3million (N7.8billionn) annually on maintenance and expatriate pilots.

This is as a result of the owners’ failure to register the jets locally.

Going by the International Civil Aviation Organisation’s (ICAO) policy, Nigeria-registered pilots and engineers cannot fly or maintain foreign-registered aircraft. According to the Chief Executive Officer, Airfirst Nigeria Limited, an aviation maintenance consultancy firm, Gbolahan Abatan, there are about 70 private jets in the country.

It was gathered that about 80 per cent of these private jets carried foreign registration, with most of them registered in South Africa, United States and some European countries.

This means that about 56 jets are being flown and maintained by expatriates.

According to industry experts, annual maintenance of a private jet costs an average of $550,000. This translates into about $30.8million for the estimated 56 foreign-registered aircraft.

An expatriate pilot also takes home an average of $8,000 monthly (about N1.40 million), according to experts. This means that Nigeria loses at least $21.5million annually to expatriate pilots.

These pilots are flown into the country every three weeks. Their return air tickets, as well as hotel and feeding costs, while in Nigeria, are borne by the owners of the private jets.

According to experts, 70 per cent of the foreign-registered private jets flying in Nigeria carry South Africa’s registration; hence, a significant number of the jets are being flown and maintained by South Africans.

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