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Nigeria Aircraft Maintenance, Repair and Overhaul Market Segmented by Industry and Market Entry - Growth, Trends and Forecast (2018 - 2023)

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  • 81 Pages
  • May 2018
  • Region: Nigeria
  • Mordor Intelligence
  • ID: 4557733

Growth in Passenger Air Traffic in Africa

The African aviation industry is experiencing a healthy air traffic growth rate and ranked as the second fastest-growing region in the world. African airlines saw an 11.2% rise in traffic in Q1 of 2016, compared to Q1 of 2015, registering a total of 15.2 million passengers for 2016.

Nigeria reported the highest passenger traffic in the West and Central African regions for 2015 and 2016. Nigerian airports have an annual capacity of about 10 million passengers, while their nearest competitors have a maximum capacity of 2.5 million passengers, per annum. The Ethiopian & South African airlines have been offering airdrop and pick-up facility to Nigerian passengers travelling to Latin America from Lome and Accra.

The growth in air passenger traffic across Africa is expected to drive the demand for new aircraft deliveries of over 1,100 aircraft (which is spread over 10 years of manufacturing). The African ageing aircraft fleet is expected to see intensive usage, decreasing the time before the next MRO, thus improving the demand for aircraft MRO in Africa. Given the anticipated increase in demand for aircraft MRO, the setting up of an MRO facility in Nigeria is expected to be a profitable business over the forecast period.

Blocked foreign exchange

Recently, the Nigerian government blocked the exchange of foreign currencies, preventing airlines from obtaining spare parts made in the US and Europe. Additionally, the restriction on the foreign exchange prevented international airlines from buying ATF from Nigerian airports. Nigeria also fixed the exchange price of NGN, increasing the cost of ATF, pegging it at a much higher rate than the neighboring countries. In 2016, The United Airlines of the US withdrew services to Nigeria, following the foreign exchange blockade. The foreign exchange blockade led to a drop in the number of aircrafts bound toward Nigeria, in addition to cutting of domestic flights within Nigeria. Thus, Nigeria dropped out as an aircraft hub in Northern Africa. The foreign exchange ban across Africa seems to have caused a loss of USD 2 billion in all the four nations, including Nigeria.

The continued blockade of foreign exchange is expected to act as a restraining factor for the growth of the Nigerian MRO market and restrict foreign investments in the business. The qualified investment is expected to cut down on the availability of spare parts for carrying out the MRO activity, thereby, restricting the business ability of upcoming MRO facilities in Nigeria.

The only MRO facility in West Africa

West Africa lacks the availability of a full-fledged MRO facility. Thus, the opening of an MRO facility in Nigeria is expected to act as the needed opportunity for stakeholders and venture capitalists of different airlines and aircraft owners to invest in the MRO facility.

A single, complete MRO facility in Nigeria is expected to lead to the repopulation of aircraft traffic in Nigeria, in addition to a drop in airfares, crude oil prices and lifting of the foreign exchange ban on the aviation industry.

Africa is expected to have a delivery of 1,000 aircrafts, while its 650 commercial aircraft fleet is expected to make regular visits to the MRO facility. The MRO facility to be constructed in Nigeria is also expected to receive aircrafts from foreign airliners for MRO. Being the only complete MRO facility in the area, the opportunity for the new MRO facility to capitalise the market and build a vast customer base is expected to hardly be of any trouble during the forecast period, under the current market scenario.

Bad Airport Infrastructure in Africa

The African airport industry is profoundly affected by lousy infrastructure. Most of the African airports have poorly maintained runways and airfields which leads to causing massive damages to the aircraft landing gears on the pavement.

The damages caused to aircrafts by bad runways are severe and thus, speed-up the process of requiring repairs and maintenance for aircrafts.

In one such incident at the Abuja International Airport (DNAA) serving Nigeria, a Challenger 604's main gear brakes, and the tire suffered extensive damage, caused by vibration on the landing ramp leading to a replacement of the tires after the 42nd landing of the aircraft at the airport. Similar conditions are expected to be witnessed in the northe African airports. Runway construction in most airports is terrible, causing the breaks between maintenance to become small. Abuja had recently closed its runways for repairing the potholes and broken concrete.

The situation is much more aggravated, owing to the unavailability of communication between ground control and aircraft. Nigerian airports were found to be better, compared to most airports in the other parts of the region, where radio communication is much worse and almost non-existent. Thus, pilots at most airports are left to fend for themselves, for a safe landing or avoiding potholes on the ramp.

Key Developments in the Market:

September 2017: The Company AERO has declared that it has obtained certification from the Nigerian Civil Aviation Authority (NCAA) in order to handle C-checks on the Boeing B737-300, B737-400 and B737-500 at the terminal of the airline.

December 2017: Springfountain Infrastructure, a Nigerian aviation services provider has signed a joint venture agreement with US Aircraft manufacturer Boeing in order to set up Africa’s first aircraft leasing company which will also cater to providing Aircraft Maintenance, Repair and overhauling services in Western Africa.

March 2018: Alsalam Aerospace Industries, a Saudi Arabian aircraft MRO company is in talks with the Nigerian Air Force. The company wants to be involved in the line maintenance, repair and overhaul of the Nigerian Air Force C-130 H aircraft.

Reasons to Purchase this Report

  • Provides latest insights into the Nigeria maintenance, repair and overhaul market entry.
  • Analysing various perspectives of the market with the help of Porter’s five forces analysis.
  • Provides latest insights into the MRO market in Nigeria and surrounding African nations.
  • Provides latest insights into the market entry process for the Nigerian MRO Market.
  • Identify the latest developments, market shares and strategies employed by the major market players.
  • 3 months analyst support along with the Market Estimate sheet (in excel).

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Table of Contents

1.1 Scope of the Study
1.2 Market Definition
1.3 Executive Summary
2.1 Study Deliverables
2.2 Study Assumptions
2.3 Research Phases
3.1 Current Market Scenario
3.2 Technology Trends
3.3 Industry Attractiveness - Porter's Five Forces Analysis
3.3.1 Bargaining Power of the Suppliers
3.3.2 bargaining Power of the Consumers
3.3 .3 Threat of New Entrants
3.3.4 Threat of Substitute Products and Services
3.3.5 Competitive Rivalry within the Industry
4. Market Dynamics
4.1 Drivers
4.2 Restraints
4.3 Opportunities
5. Market Demand Analysis
5.1 Socio-Economic Segmentation
5.2 Target Market Identification
5.3 PESTLE Analysis
5.4 Porter's Five Forces Analysis
6. Market Size of Aircraft MRO industry (in USD millions)
6.1 Engine
6.2 Component
6.3 Interior
6.4 Airframe
6.5 Modification
6.6 Field Maintenance
7. Market Entry
7.1 Market Entry: The Strategy
7.1.1 Types of Entry Modes, By Market Entry Objectives
7.1.2 Supply Chain Analysis Parts & Components (Import-Export Analysis) Distribution Network Analysis
7.2 Market Entry: The Administration
7.2.1 How to Register a Company (Flowchart)
7.2.2 Registration Processes Ministries Involved Guidelines, Criteria and Conditions Specified by the Government
7.2.3 Government Policies
8. Competitive Landscape
9. Company Profiles
9.1 One Dot
9.2 Jet Maintainance Solutions (Jet MS)
9.3 Logos Aviation
9.4 BGI Aviation Technical Services (BATS)
9.5 Aero
9.6 Sky Jet Aviation Services
9.7 ExecuJet
9.8 GZ
9.9 AJW Group
9.10 Arik Air
9.11 Sanusi
9.12 TekniTeed
10. Future Outlook of the Market11. Disclaimer

Companies Mentioned

A selection of companies mentioned in this report includes:

  • One Dot

  • Jet Maintainance Solutions (Jet MS)

  • Logos Aviation

  • BGI Aviation Technical Services (BATS)

  • Aero

  • Sky Jet Aviation Services

  • ExecuJet

  • GZ

  • AJW Group

  • Arik Air

  • Sanusi

  • TekniTeed