Africa is a growing aviation region, and according to researchers here at Eways Aviation, set to recover and grow the fastest after the current crisis. However, one reader correctly pointed out an issue at the heart of the continents’ rapid expansion – its MRO problem.
What is the problem with MRO in Africa?
For the uninitiated, MRO stands for Maintenance, Repair, and Overhaul of aircraft. These services are provided by independent firms that are located at various airstrips that supply spare parts, repair grounded aircraft, and perform scheduled maintenance. When an aircraft is grounded (Aircraft on Ground, or AOG) then the airline has to use local support to find spare parts and/or repair the aircraft. But when airlines require regular maintenance services, the task of finding a long-term service partner, can be frustrating.
Because the aircraft operated by many airlines in the region are so new, they can only be maintained by authorized firms such as Airbus (whose regional office is located in Addis Ababa, Ethiopia), or in the specific case highlighted in this article, the engines need to be serviced by General Electric. The problem with needing a maintenance crew in Africa is that the nearest crew for General Electric are stationed in England.
A pitfall for operators in the region concerns the limited presence of certified maintenance facilities. Operators have to ferry aircraft 5 hours away to Addis Abeba or Rabat and, more often, Europe for basic maintenance interventions. There is no sufficiently equipped or technologically advanced MRO in the region. This accounts for more significant operational costs and higher fares. Investments in a worthy MRO located around one of the strategic airports could quickly yield outstanding benefits. – Abong Bebey Blais, a reader commenting on Eways Aviation’s latest Central Africa report.
This means airlines operating aircraft with these engines (which is very common) have to either prepare for long-distance maintenance operations, or pay exhorbitant fees to transport maintenance crews to their hubs in Africa. And if the airline is based out of a remote location (like Central Africa), this can make things very expensive.
It’s that last point that we want to stress. These foreign MRO firms are costly because they only take hard cash upfront from airlines, despite many of them being operated by national governments.
“At present, said carriers are forced to rely on foreign lessors and MRO firms, requiring payment in hard currency.” – The Ministry of Civil Aviation of Nigeria via CH-Aviation
What if airlines can’t pay the higher fees?
It can get so bad that if an airline is unable to service its MRO debts, then it may have its aircraft held hostage by the MRO operator (or through inaction on maintenance for the plane, the airline may be grounded).
“The risk associated with this arrangement is one where if the aircraft [i.e., the sole remaining A319] should, on any day, develop a technical problem, the entire regional operation will be shut down (all flights to JNB and CPT). The further risk relates to fact that SAAT is the maintenance service provider on this fleet. They might not be in a position to attend to the aircraft – as is the case with our other A319 aircraft,” – Air Namibia’s interim chief executive Xavier Masule wrote in a letter to the Ministry of Works and Transport in 2019.
At the time of writing this article, Air Namibia had two A319s held by SAA Technical (SAAT) in Johannesburg and needed government assistance to the tune of NAD20 million Namibian dollars (USD1.33 million) to recover the aircraft. Without aircraft, an airline can’t carry passengers and can’t make revenue.
In some cases, the national government has had to step in to ensure that MRO debts are paid to allow continued aircraft operations. In Libya, the Central Bank has had to disburse US dollars to settle arrears of Air Libya accounts with its foreign-based suppliers, including MRO and ground handling firms in Turkey.
“This will allow the airline to work normally without any restrains and debts,” said spokesman Omran Al-Zabadi told Akhbar Libya to press.
Availability of MRO services can dictate the future of an airline
Lastly, even when MRO is available to airlines in their local region, it might be capped by a single provider – which limits expansion opportunities for the future.
“I like the A321-200neo(LR) very much, we could do a lot of things with this aircraft but not in our current financial state. It is easier to talk with Boeing because we are already a customer, we have a training facility, an [local] MRO” – Kenya Airways CEO Sebastian Mikosz told CH-Aviation. Without additional spending, Kenya Airways would be forced only to consider Boeing options.
Until this MRO bottleneck is resolved, airlines will continue to be at the mercy of international MRO operators in more affluent countries, with more powerful currencies and the ability to ransom airlines at whim.
What is the solution to this MRO problem?
Fortunately, there is a way around this problem, and it requires both MRO firms, airlines, and national governments to come together. It involves investing in MRO operations in the region and ensuring that these services are provided in the local currency at a fair market rate.
Some countries have already taken the plunge, and the race is now on to build much-needed MRO facilities in Africa’s heartland.
In 2018, the Ghanaian government signed an agreement with Egypt to allow the national carrier, EgyptAir Maintenance and Engineering, to establish a vast MRO facility at Accra Kotoka International Airport.
“Abu Talib Tawfiq, the CEO of EgyptAir, pointed to the importance of the new contract that comes within the framework of expanding in the African continent and targeting new customers for EgyptAir for maintenance as part of the company’s strategy, as the company succeeded in attracting 15 new customers from airlines” (Translated) press release.
“The consultants said [it would take] two years, and I said we should do it in a year if possible, so between one and two years, I think that should be the period,” said former Ghana’s Minister for Aviation, Cecilia Dapaah, in 2018. Since then, the facility has been expanded to help operate new airlines in the region and allow MRO services 24 hours a day.
What about other countries?
In other countries like Tanzania, a change in government aviation regulations has allowed new MRO services to pop up.
“Other projects on the cards include an MRO hangar facility in Dar es Salaam, an inflight catering unit, and the construction of an executive lounge in Julius Nyerere International Airport’s new Terminal III.” – Edward Nkwabi, Sales and Distribution Manager at Air Tanzania.
Lastly, neighboring country Kenya has not been slack in developing its own MRO services, with the home carrier Kenya Airways planning to invest heavily in MRO, among other things. “We have to invest in fleets, in MRO, in IT, in our training center. In any business, and especially in ours, you need to spend in the beginning in order to reap the rewards in the long run,” said Chief Executive Sebastian Mikosz to CH-Aviation.
With new modern and more significant MRO facilities well on the way, airlines can breathe a sigh of relief that things are going to get better in the region. However, there is still a long way to go until these operations can match the coverage and technical skill of the Middle-East and Europe.
If you are an airline in need of MRO operations, spare parts or more, speak to Eways Aviation. As the de facto experts in African Aviation, we stand by ready to help you navigate the tricky waters of this fascinating and turbulent region.