Federal Government in talks with Embraer

The Federal Government has entered negotiations with Embraer for the acquisition of new aircraft for the domestic carriers. According to the Managing Director of the Federal Airports Authority of Nigeria (FAAN), Mr. George Uriesi:

Domestic carriers use wrong equipment for most of their operations. There is no established record of sustainability for these airlines mainly because of the use of wrong equipment. Intervention fund by the Federal Government in the past to assist them re-fleet has failed because there was no evidence of the money being ploughed back into the airlines leading to them failing in the long run. Government wants to change this model entirely by floating a fund for the acquisition of new aircraft for the domestic carriers. In this regard, government is seeking a partnership with Embraer that will lead to a discussion on how these new aircraft will be procured at very competitive, fair, and concessionary rates.

The aircraft will be financed with a N80 billion loan from China:

The Federal Government may have borrowed $500 million (N80 billion) to buy the 30 brand new aircraft it planned to give to 10 domestic airlines as fresh intervention in the aviation industry. [T]he government borrowed the N80 billion from a Chinese bank. Stella Oduah, Aviation Minister, had said that she was not happy with the way the first N300 billion intervention fund was disbursed and spent, adding that the only way to save the industry from imminent collapse was to quickly intervene again.

On another note: the two ex-Air Nigeria EMB190s, owned by UBA, are still stored at Lagos Airport. Perhaps the Ministry of Aviation could acquire those first?

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6 responses to “Federal Government in talks with Embraer”

  1. superspotter says :

    Yes, as of two weeks ago, the two ex Air Nigeria Embraers were still sat on the ramp in Lagos, regards clive.

  2. Greg says :

    Ehm, it’s not that I smell a rat o, but wouldn’t the Chinese have wanted us to buy THEIR two 100/170 seat transports, in development, than use their cheap loans to buy foreign equipment? It doesn’t add up, given the savage competition among the airframe makers and the surplus of types and makers to choose from these days

  3. Obi says :

    I smell a rat! Will the Government force the airlines to take the Embraers. Will they buy the aircraft and then tell the airlines “come and take”. What kind of arrangement with the airlines will this involve? What if an airline wants to buy Boeing or Airbus instead? Will they also help with crew training, engineer training, spares holding and such considering that most airlines in Nigeria currently operate Boeing types and are not set up for a different type?
    Why not allow the airlines to order the types they think works for them and the Government help with arranging financing? This smells and just reinforces my view that most people in charge of the aviation industry in Nigeria are delittantes.
    The whole thing hasn’t been thought through properly.

    • Jay says :

      Embraer are pretty good planes,i work on them presently in the united states and are way cheaper than Boeing,so if the Government can help acquire some,that will help the Aviation industry in Nigeria.I am a Nigerian and will love to come back home and work on planes one day

  4. Naijajet says :

    This is wrong at some many levels…..
    What if non of the airlines find the aircraft the want to offer unsustainable for their business plan?? .
    Did the government consult the said Carriers on which Aircraft the would prefer?
    Would “existing” Airlines get priority over new airlines?(or is this the reason why we have seen so many paper airlines being floated up recently?? Government should just focus their energy on creating an enabling environment in all sectors (Including aviation) for players to run their various businesses. I guess if the country had a sovereign wealth fund as they once proposed then this could be one of the lines they could have looked into, but the would have just focused their energy on Nigerian carriers but also carriers across the Globe.

  5. Aviation in Nigeria says :

    @Superspotter, thank you for the update.

    According to an expert, Nigeria should focus on reducing the number of small airlines operating domestic flights: http://www.ft.com/intl/cms/s/0/6c03cdf2-3287-11e2-ae2f-00144feabdc0.html (Google the title “Airlines struggle to shake off their poor image” if the direct link is blocked).

    Perhaps, the FG should focus on assisting existing airlines, such as Arik, Overland and Aero, according to their needs, rather than setting-up a Chinese-like model of a state-owned pool of aircraft leased to the carriers.

    It’s also disturbing that the government concludes that the Aviation Intervention Fund failed, but without much investigation, they just decide to create another multi-billion naira intervention fund.

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