Thursday, 12 April 2018

NIGERIA: Afreximbank Help Africa Airline Operators Acquire New Aircraft

A Pan-African bank on Monday unveiled a special credit facility to support airlines and governments seeking funds to buy Russian-made commercial aircraft.

African Export-Import Bank (Afreximbank) global head of client relations Rene Awambeng said it had struck a deal with the Russian Export Sector (REC) where African-based operators will be funded to make the purchases.

Afreximbank has provided a Sh2 trillion ($20bn) fund to support Africa’s airlines, including national flag carrier Kenya Airways, and has promised to provide further funds to improve aviation infrastructure.

African countries predominantly make aircraft purchases from western firms, majorly US Boeing and European Airbus.

However, old Soviet-era cargo planes still operate in the African airspace.

Speaking in Nairobi during a meeting with industry players, Mr Awambeng said increased intra-Africa trade, aviation infrastructure and availability of higher disposable incomes among Africans informed the decision to provide the credit facility.

The effective movement of goods and people is fundamental to Africa’s trade, growth and development objectives.

Consequently, improving international, regional and domestic air transport has become a key priority area, he said.

Russian civil aircraft as well as manufacturers of air traffic control equipment were in Kenya as part of a three-country intra-Africa roadshow to meet public and private sector aviation stakeholders to promote the Russian aviation industry products.

The one-day workshop saw Russian aircraft models showcased.

The financier has in the past organised aircraft financing for the purchase of nine new Boeing 787-800s (Dreamliners) (B787s), 1 Boeing 777-300ER (B777-300ER) and 10 Embraer which was the first phase of Kenya Airways’ fleet upgrade and a key component of its 10-year business plan for the period 2012 to 2021.

Sukhoi’s REC is a state-owned export promotion development institute.

AS part of its, efforts at improving the air transport infrastructure across Africa, the African Import Export Bank, Afreximbank and the Russian Export Center, REC, began a roadshow in Lagos.

Under a new partnership that would raise the profile of Russian aircraft and helicopters in Africa and enable Nigerian airline operators access financial support and facility to acquire brand new aircraft.

This is just as Chairman, Airline Operators of Nigeria, AON, Captain Nogie Meggison said the intervention of Afreximbank is a welcome development in the Nigeria aviation sector.

The roadshow, which featured presentations, showcased a range of cutting-edge Russian aircraft and helicopters, with demonstrations and flight experiences, over the next five days, started in Nairobi, Kampala in Uganda, Lagos, will continue in Abuja and end in Bamako, Mali.

Rene Awambeng, Afreximbank’s Global Head for Client Relations said: Our partnership with the Russian Export Centre gives key players in Africa’s aviation industry tremendous opportunities.

The 17-year average fleet age of African airlines is the oldest of any world region, and by showcasing state-of-the-art and more fuel-efficient aircraft, and the newest helicopters, together with our expertise and experience in aircraft finance, we can enable the upgrading of Africa’s aviation industry.

This upgrade is a key element in boosting economies and many industry sectors. We look forward to conversations with authorities and the aviation industry to discuss their development plans and identify areas where they require funding and technical assistance.

Meanwhile, Chairman, Airline Operators of Nigeria, AON, Captain Nogie Meggison said the intervention of AfreximBank is a welcome development.

He said We have always asked that we have access to brand new aircraft. With AfreximBank coming into the picture to finance it, it opens a new chapter for us into acquisition of brand new aircraft.

Our problems in Nigeria as carriers are our financial structure and access to markets.

You cannot finance an aircraft like this using 26 percent from the Nigerian banks.

With AfreximBank coming in now, to lease the aircraft, we will be asked a 10 to 15percent deposit of the actual value of the aircraft.

The cash flow immediately gets better and we will have disposable income to take shock.

So you can afford to pay a six months lease or put a deposit of 10 percent and still have cash in your pocket, he added.

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