Nigerian airline Air Peace wants to acquire 10 new Boeing 737 MAX Airplanes to expand regional network. The new order increases the carrier’s fleet to 37, as it positions itself to exploit the opportunities that come with increased passenger volumes in the aviation industry to grow revenue and create jobs. The International Air Transport Association (IATA) expects 7.8 billion passengers to travel in 2036, a prediction based on a 3.6 percent average Compound Annual Growth Rate (CAGR) noted in the release of the latest update to IATA’s 20-Year Air Passenger Forecast.
“We are excited to add the 737 MAX to our fleet as we expand our network to offer more destinations and serve more passengers,” said Allen Onyema, Chairman and CEO, Air Peace Limited. “The fuel efficiency and superior operating economics of the 737 MAX will ensure that the aircraft will play a major role in growing our business in the years to come.”
Worldwide annual air passenger numbers exceeded four billion for the first time in 2017, according to IATA, which noted that the growth was supported by a broad-based improvement in global economic conditions and lower average airfares. African airlines carried 88.5 million passengers last year, up 6.6 percent over 2016. This is expected to continue growing and Air Peace is now positioned to benefit from the growth.
The airline had also recently added a second Boeing 777 to its fleet, as it prepares to launch its international flight operations to China, Dubai, Sharjah, Mumbai, Houston, London and Johannesburg.
According to a joint press release by Air Peace and Boeing, the 737 MAX 8 is part of a family of airplanes that offer 130 to 230 seats and the ability to fly up to 3,850 nautical miles (7,130 kilometers). With improvements such as the CFM International LEAP-1B engine and Advanced Technology winglets, the 737 MAX will help Air Peace save more than 20 percent on fuel costs compared to its current single-aisle airplanes.
“Africa is a growing market for commercial airplanes and we are proud that airlines like Air Peace are selecting Boeing aircraft to be part of that growth,” said Ihssane Mounir, senior vice president of Commercial Sales & Marketing for The Boeing Company. “This order reflects the strong demand that we are seeing for the 737 MAX as airlines choose the airplane’s superior performance and reliability.”
The unit cost of the Boeing 737 MAX 8 is $117.1 million, according to the American aircraft maker’s website. However, Onyema said the company did not pay anything close to the cost price. “The support we are getting from Boeing and the American government is very massive,” he said, adding “Boeing has given us a lot of incentives. Those incentives will come in the way of training, spares and some other support to help us achieve a smooth transition.”
The new planes are bringing jobs
On August 20, The Nerve Africa advised Africans to clean up their resumes, as IATA expects job opportunities in the aviation sector to increase tremendously in the coming years. According to a report of a global survey of Human Resources professionals in the aviation industry commissioned by the body, an average of 75 percent growth is expected in ground operations, customer services and cabin crew jobs over the next two years.
Onyema said his new planes are bringing jobs. “One Boeing 737 MAX aircraft can give jobs to over 500 people. We are looking at the teeming unemployed youths in Nigeria,” the Air Peace CEO said.
He added that apart from providing jobs, the new aircraft will help Air Peace reduce cost of operation.
“Fuel, they say all over the world, takes about 40 percent of your cost of operation, but I disagree. In Nigeria, it takes about 70 percent.
“The Classic we are using are rugged planes; very powerful and safe. However, the fuel consumption of the Classic is enormous. What you put in to fly from here to Abuja, you can use it in a Boeing 737 to go to Australia and come back,” Onyema said.
The aviation sector in Nigeria has been showing impressive growth in recent times, with improved safety records and the government’s zero-duty regime cum withdrawal of VAT on commercial aircraft and spare parts raising investor confidence. Lending rate is now as low as 10 percent, giving local carriers a chance at expansion and growth.