Economy

Aircraft Manufacturers Jostle for African Market

Published

6 years ago

August 21, 2018

Aircraft Manufacturers Jostle for African Market

Major aircraft manufacturers – Boeing, Airbus, Bombardier, Embraer, ATR and others – are in fierce competition to have their aircraft types dominate the fleet of Nigerian and other African carriers, investigations have revealed.

The push for the dominance is coming on the heels of market survey studies, which revealed Africa as the new frontier market for the growth of global air transport.

Boeing, Airbus, Embraer and Bombardier’s surveys indicate the demand for their aircraft types in Africa as the next destination for growth.

Besides the reports, many African countries, including Nigeria, have opened discussions with some aircraft manufacturers to acquire their aircraft for either their national or flag carriers.

Investigations revealed that many African governments are about sealing their aircraft acquisition deals with Boeing Corporation, Airbus Company, Bombardier Commercial Aircraft Company and Brazilian aircraft maker – Embaer.

To confirm its interest in Nigeria as well as West and Central Africa, Boeing Corporation last year signed an agreement with Spring Fountain Infrastructure Limited to set up an aircraft company to facilitate airplane acquisition for carriers.

Part of the move, investigations revealed, was to encourage Nigerian and other African carriers to replace their ageing aircraft with state-of-the-art Boeing equipment that are environment-friendly and fuel efficient.

According to the project’s promoter, Mrs Tokunbo Fagbemi, this would boost Boeing Corporation’s inroads into Africa.

This move lauded by many operators, including Chairman of Air Peace, Mr Allen Onyema, has seen the airline acquiring more aircraft.

Though Boeing aircraft consists of over 60 per cent of the fleet in the airspace by indigenous carriers, others exist.

Air Peace, for instance, has acquired some Embraer jets. The aircraft, experts say, are good for short haul flights.

It was learnt that the Brazilian aircraft manufacturer is making inroads into the Nigerian and African markets as more operators are embracing the fleet because of its fuel economy, limited crew and lower maintenance cost.

In a recent interview in Lagos, Tropical cal Arctic Logistics Limited (TAL) President and Chief Executive Officer, Emperor Baywood Ibe, advised operators to consider Embaear regional and business jets as the most suitable aircraft for short haul flights.

The helicopter operator, who plans to launch scheduled domestic flights soon, said the company will settle for Embraer jets.

Also, in a recent interview, Minister of State, Aviation, Hadi Sirika confirmed that the government was discussing with some aircraft manufacturers to acquire airplanes for the proposed national carrier – Nigeria Air.

Investigations reveal that besides Boeing and Embraer aircraft types, many Nigetian carriers, including Arik Air, Aero Airlines and Overland Airways, have many Bombardier and ATR aircraft in their fleet.

While Overland Airways has ATR 72 aircraft type in its fleet, Aero and Arik Air have some Bombardier CRJ and Dash 8 Bombardier jets in their fleet.

Meanwhile, Canadian airplane manufacturer, Bombardier Commercial Aircraft, said three of it turboprops has been acquired by a Ghanaian operator – Passion Air.

The airline has become the first Bombardier operator in Ghana.

The aircraft manufacturer said the company placed three pre-owned Q400 turboprops.

The airline acquired the aircraft through a dry-lease with a third party.

“Bombardier has sold about 3,500 new regional aircraft to date, and we continue to be very active on the used aircraft market,” said David Speirs, Vice President, Asset Management, Bombardier Commercial Aircraft.

“Our recent momentum on the pre-owned aircraft market worldwide is a clear indication that our products are addressing a growing need for regional air transportation, especially in emerging markets.

“Our market penetration in Africa continues to intensify, and we are pleased to welcome Passion Air as the first commercial airline operating a Bombardier regional aircraft in the Republic of Ghana,” said Jean-Paul Boutibou, Vice President, Sales, Middle East and Africa, Bombardier Commercial Aircraft.

“Africa is the youngest and fastest growing region in the world, and regional aircraft like the Q400 will play a key role in helping advancing Africa’s economic growth.

The airline will operate the three Q400 aircraft in a 78-seat configuration on domestic routes.

“This is a first step, and we look forward to expanding our fleet with more Bombardier aircraft,” said Edward Annan, Chief Executive Officer, PassionAir.

Only last month, Bombardier Commercial Aircraft announced that it has signed a firm order for four new CRJ900 regional jets with Uganda National Airlines Company.

Based on the list price for the CRJ900 aircraft, the firm order is valued at $190 million.

“We congratulate the Government of Uganda on the revival of its national flag carrier, and are thrilled that the new airline has selected Bombardier and the CRJ900 regional jets for its upcoming debut,” said Jean-Paul Boutibou, Vice President, Sales, Middle-East and Africa, Bombardier Commercial Aircraft.

Investigations reveal that 21 operators are flying 58 CRJ Series in Africa. Bombardier has recorded firm orders for 1957 CRJ Series regional jets.

A recent batch of acquisitions by African carriers boosted Bombardier’s presence on the continent.

“As we seek to increase our market share on the continent, we have successfully placed a significant number of pre-owned regional aircraft with more than seven airlines from the region in the last three months,” Boutibou said.

Among African carriers that have acquired Bombardier aircraft are South Africa’s CemAir, Tunisian Syphax, Cameroon’s CamAir – Company, Kenya’s DAC East Africa and Congo Airways.

Others are: Kenya’s 784 Air Services and Silverstone Airways.

“Our market penetration in Africa is making headway,” Boutibou said at the African Aviation Finance conference in Johannesburg, South Africa

“Our strategy not only further supports our aftermarket revenue stream, we are confident that it will also lead to new aircraft orders in the future,” he added.

“These latest placements in Africa are testament to the residual value of our regional aircraft,” Bombardier Commercial Aircraft Vice President, Asset Management, David Speirs said

Africa’s fast growing carrier, Ethiopian Airlines, has signed a purchase agreement with Bombardier for 10 new Q400 aircraft.

“The Bombardier turboprops continue to deliver unmatched performance to our operators, and we are proud that the flag carrier of Ethiopia is once again recognising its tremendous value by increasing its fleet of Q400 aircraft,” said Fred Cromer, President, and Bombardier Commercial Aircraft.

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Samed Olukoya

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Economy

Federal Government Set to Seal $3.8bn Brass Methanol Project Deal in May 2024

Published

1 week ago

April 18, 2024

Samed Olukoya

The Federal Government of Nigeria is on the brink of achieving a significant milestone as it prepares to finalize the Gas Supply and Purchase Agreement (GSPA) for the $3.8 billion Brass Methanol Project.

The agreement to be signed in May 2024 marks a pivotal step in the country’s journey toward industrialization and self-sufficiency in methanol production.

The Brass Methanol Project, located in Bayelsa State, is a flagship industrial endeavor aimed at harnessing Nigeria’s abundant natural gas resources to produce methanol, a vital chemical used in various industrial processes.

With Nigeria currently reliant on imported methanol, this project holds immense promise for reducing dependency on foreign supplies and stimulating economic growth.

Upon completion, the Brass Methanol Project is expected to have a daily production capacity of 10,000 tonnes of methanol, positioning Nigeria as a major player in the global methanol market.

Furthermore, the project is projected to create up to 15,000 jobs during its construction phase, providing a significant boost to employment opportunities in the country.

The successful execution of the GSPA is essential to ensuring uninterrupted gas supply to the Brass Methanol Project.

Key stakeholders, including the Nigerian National Petroleum Company Limited and the Nigerian Content Development & Monitoring Board, are working closely to finalize the agreement and pave the way for the project’s advancement.

Speaking on the significance of the project, Minister of State Petroleum Resources (Gas), Ekperikpe Ekpo, emphasized President Bola Tinubu’s keen interest in expediting the Brass Methanol Project.

Ekpo reaffirmed the government’s commitment to facilitating the project’s success and harnessing its potential to attract foreign direct investment and drive economic development.

The Brass Methanol Project represents a major stride toward achieving Nigeria’s industrialization goals and unlocking the full potential of its natural resources.

As the country prepares to seal the deal in May 2024, anticipation grows for the transformative impact that this landmark project will have on Nigeria’s economy and industrial landscape.

Economy

IMF Report: Nigeria’s Inflation to Dip to 26.3% in 2024, Growth Expected at 3.3%

Published

1 week ago

April 17, 2024

Samed Olukoya

Nigeria’s economic outlook for 2024 appears cautiously optimistic with projections indicating a potential decrease in the country’s inflation rate alongside moderate economic growth.

The IMF’s revised Global Economic Outlook for 2024 highlights key forecasts for Nigeria’s economic landscape and gave insights into both inflationary trends and GDP expansion.

According to the IMF report, Nigeria’s inflation rate is projected to decline to 26.3% by the end of 2024.

This projection aligns with expectations of a gradual easing of inflationary pressures within the country, although challenges such as fuel subsidy removal and exchange rate fluctuations continue to pose significant hurdles to price stability.

In tandem with the inflation forecast, the IMF also predicts a modest economic growth rate of 3.3% for Nigeria in 2024.

This growth projection reflects a cautious optimism regarding the country’s economic recovery and resilience in the face of various internal and external challenges.

Despite the ongoing efforts to stabilize the foreign exchange market and address macroeconomic imbalances, the IMF underscores the need for continued policy reforms and prudent fiscal management to sustain growth momentum.

The IMF report provides valuable insights into Nigeria’s economic trajectory, offering policymakers, investors, and stakeholders a comprehensive understanding of the country’s macroeconomic dynamics.

While the projected decline in inflation and modest growth outlook offer reasons for cautious optimism, it remains essential for Nigerian authorities to remain vigilant and proactive in addressing underlying structural vulnerabilities and promoting inclusive economic development.

As the country navigates through a challenging economic landscape, concerted efforts towards policy coordination, investment promotion, and structural reforms will be crucial in unlocking Nigeria’s full growth potential and fostering long-term prosperity.

Economy

South Africa’s March Inflation Hits Two-Month Low Amid Economic Uncertainty

Published

1 week ago

April 17, 2024

Samed Olukoya

South Africa’s inflation rate declined to a two-month low, according to data released by Statistics South Africa.

Consumer prices rose by 5.3% year-on-year, down from 5.6% in February. While this decline may initially suggest a positive trend, analysts caution against premature optimism due to various economic factors at play.

The weakening of the South African rand against the dollar, coupled with drought conditions affecting staple crops like white corn and geopolitical tensions in the Middle East leading to rising oil prices, poses significant challenges.

These factors are expected to keep inflation relatively high and stubborn in the coming months, making policymakers hesitant to adjust borrowing costs.

Lesetja Kganyago, Governor of the South African Reserve Bank, reiterated the bank’s cautious stance on inflation pressures.

Despite the recent easing, inflation has consistently remained above the midpoint of the central bank’s target range of 3-6% since May 2021. Consequently, the bank has maintained the benchmark interest rate at 8.25% for nearly a year, aiming to anchor inflation expectations.

While some traders speculate on potential interest rate hikes, forward-rate agreements indicate a low likelihood of such a move at the upcoming monetary policy committee meeting.

The yield on 10-year bonds also saw a marginal decline following the release of the inflation data.

March’s inflation decline was mainly attributed to lower prices in miscellaneous goods and services, education, health, and housing and utilities.

However, core inflation, which excludes volatile food and energy costs, remained relatively steady at 4.9%.

Overall, South Africa’s inflation trajectory underscores the delicate balance between economic recovery and inflation containment amid ongoing global uncertainties.