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Aircraft Maintenance: Nigeria, W’Africa Airlines to Save $1bn Yearly

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  • Aircraft Maintenance: Nigeria, W’Africa Airlines to Save $1bn Yearly

Stakeholders in the aviation industry have said that Nigerian and West African airlines could save billions of dollars annually on aircraft maintenance with the establishment of Aero Contractors’ Maintenance, Repair and Overhaul facility at the Murtala Muhammed Airport, Lagos.

The stakeholders made this known at the roll-out of the first successfully conducted Boeing 737-500 C-check at the facility, on Friday.

A former President of the National Association of Aircraft Pilots and Engineers, Isaac Balami, said airlines in the West African sub-region were spending at least $1bn yearly on the maintenance of aircraft in Europe and America.

He said Aero’s MRO facility would help to curb capital flight in that area of operation of the airlines.

The Minister of State for Aviation, Senator Hadi Sirika, noted that airlines were spending at least $1.8m on each C-check on their B737 classic, the most commonly used aircraft for domestic flight operations in the country.

Sirika, who was represented at the unveiling of the aircraft by the Commissioner, Accident Investigation Bureau, Akin Olateru, said Aero’s accomplishment was commendable, adding that the takeover of the airline by the Asset Management Corporation of Nigeria had paid off.

“Just yesterday, Aero Contractors was on the verge of being written off as another failed airline in Nigeria; but today, the story is different,” he stated.

A former Director-General of the Nigerian Civil Aviation Authority, Dr. Harold Demuren, said maintenance was a major problem for airlines due to its cost.

“Maintenance is done in dollars, while the airlines sell tickets in naira. This is killing the airlines. The success recorded by Aero with the establishment of this MRO and successful completion of a C-check must continue,” he added.

The Managing Director, AMCON, Ahmed Kuru, stated that aviation remained a critical sector for the country’s economic prosperity.

Kuru, who was represented by AMCON’s Executive Director, Aminu Ismail, said if the country must compete globally, the only option was to have a sustainable, vibrant and dependable aviation industry.

The Managing Director, Aero, Ado Sanusi, said conducting aircraft C-check in the country was a huge milestone for the aviation industry.

While appealing to the Nigeria Customs Service to ensure easy passage and clearance of tools for the maintenance process, he stated that Aero had applied to be granted a free trade zone status by the Nigerian Export Processing Zones Authority to help the turnaround time for the MRO facility.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Crude Oil

Brent Crude Oil Approaches $70 Per Barrel on Friday

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Crude oil

Nigerian Oil Approaches $70 Per Barrel Following OPEC+ Production Cuts Extension

Brent crude oil, against which Nigerian oil is priced, rose to $69 on Friday at 3:55 pm Nigerian time.

Oil price jumped after OPEC and allies, known as OPEC plus, agreed to role-over crude oil production cuts to further reduce global oil supplies and artificially sustain oil price in a move experts said could stoke inflationary pressure.

Brent crude oil rose from $63.86 per barrel on Wednesday to $69 per barrel on Friday as energy investors became more optimistic about the oil outlook.

While certain experts are worried that U.S crude oil production will eventually hurt OPEC strategy once the economy fully opens, few experts are saying production in the world’s largest economy won’t hit pre-pandemic highs.

According to Vicki Hollub, the CEO of Occidental, U.S oil production may not return to pre-pandemic levels given a shift in corporates’ value.

“I do believe that most companies have committed to value growth, rather than production growth,” she said during a CNBC Evolve conversation with Brian Sullivan. “And so I do believe that that’s going to be part of the reason that oil production in the United States does not get back to 13 million barrels a day.”

Hollub believes corporate organisations will focus on optimizing present operations and facilities, rather than seeking growth at all costs. She, however, noted that oil prices rebounded faster than expected, largely due to China, India and United States’ growing consumption.

The recovery looks more V-shaped than we had originally thought it would be,” she said. Occidental previous projection had oil production recovering to pre-pandemic levels by the middle of 2022. The CEO Now believes demand will return by the end of this year or the first few months of 2022.

I do believe we’re headed for a much healthier supply and demand environment” she said.

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Crude Oil

Oil Jumps to $67.70 as OPEC+ Extends Production Cuts

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Oil Jumps to $67.70 as OPEC+ Extends Production Cuts

Brent crude oil, against which Nigerian oil is priced, rose to $67.70 per barrel on Thursday following the decision of OPEC and allies, known as OPEC+, to extend production cuts.

OPEC and allies are presently debating whether to restore as much as 1.5 million barrels per day of crude oil in April, according to people with the knowledge of the meeting.

Experts have said OPEC+ continuous production cuts could increase global inflationary pressure with the rising price of could oil. However, Saudi Energy Minister Prince Abdulaziz bin Salman said “I don’t think it will overheat.”

Last year “we suffered alone, we as OPEC+” and now “it’s about being vigilant and being careful,” he said.

Saudi minister added that the additional 1 million barrel-a-day voluntary production cut the kingdom introduced in February was now open-ended. Meaning, OPEC+ will be withholding 7 million barrels a day or 7 percent of global demand from the market– even as fuel consumption recovers in many nations.

Experts have started predicting $75 a barrel by April.

“We expect oil prices to rise toward $70 to $75 a barrel during April,” said Ann-Louise Hittle, vice president of macro oils at consultant Wood Mackenzie Ltd. “The risk is these higher prices will dampen the tentative global recovery. But the Saudi energy minister is adamant OPEC+ must watch for concrete signs of a demand rise before he moves on production.”

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Gold

Gold Hits Eight-Month Low as Global Optimism Grows Amid Rising Demand for Bitcoin

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Gold Struggles Ahead of Economic Recovery as Bitcoin, New Gold, Surges

Global haven asset, gold, declined to the lowest in more than eight months on Tuesday as signs of global economic recovery became glaring with rising bond yields.

The price of the precious metal declined to $1,718 per ounce during London trading on Thursday, down from $2,072 it traded in August as more investors continue to cut down on their holdings of the metal.

The previous metal usually performs poorly with rising yields on other assets like bonds, especially given the fact that gold does not provide streams of interest payments. Investors have been jumping on US bonds ahead of President Joe Biden’s $1.9 trillion coronavirus stimulus package, expected to stoke stronger US price growth.

We see the rising bond yields as a sign of economic optimism, which has also prompted gold investors to sell some of their positions,” said Carsten Menke of Julius Baer.

Another analyst from Commerzbank, Carsten Fritsch, said that “gold’s reputation appears to have been tarnished considerably by the heavy losses of recent weeks, as evidenced by the ongoing outflows from gold ETFs”.

Experts at Investors King believed the growing demand for Bitcoin, now called the new gold, and other cryptocurrencies in recent months by institutional investors is hurting gold attractiveness.

In a recent report, analysts at Citigroup have started projecting mainstream acceptance for the unregulated dominant cryptocurrency, Bitcoin.

The price of Bitcoin has rallied by 60 percent to $52,000 this year alone. While Ethereum has risen by over 660 percent in 2021.

 

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