By Chukwudi Iwuchukwu
Yesterday, a Chinese air host surprised me by welcoming me on board an Air Peace flight.
I was mildly surprised.
A Chinese air hostess on a local flight?
As I was searching for my seat, I noticed that we had another male Chinese air hostess and then a Chinese pilot, so we had three Chinese inside the flight.
Immediately I understood what it was, but the person who sat close to me during the flight was muttering under her breath why and what two Chinese air hostesses were doing on a local flight.
The wet-lease arrangement refers to what the passengers on that specific Air Peace flight witnessed.
Let me break it down for my audience to understand.
A wet lease is defined as a leasing arrangement whereby one airline (the lessor) provides an aircraft, complete crew, maintenance, and insurance (ACMI) to another airline or other type of business acting as a broker of air travel (the lessee), which pays by hours operated.
So in this instance, the owner of the aircraft is not Air Peace or Allen Onyema; rather, the aircraft belongs to a Chinese airline company that leased it to Air Peace, and that is why the passengers of the airline saw those Chinese crews during that flight yesterday.
They are working for the Chinese airline company that owns the aircraft ( not. Air Peace).
The Chinese airline simply leased the aircraft and the crew to Air Peace, which branded it with the Air Peace logo, sold tickets, and arranged for passengers to board.
Air Peace has an agreement with the Chinese owners of the aircraft about how much per trip they would pay for using their aircraft for operations.
Therefore, it is not the Chinese airline’s business whether the aircraft is full or not; you must pay them according to the terms of the contract for each trip.
Additionally, the cost of paying the Chinese pilot and the two air hostesses falls on their Chinese employer, not Air Peace Airlines.
Air Peace only provides fuel for the journey and refreshment on board; the Chinese airline takes care of the rest.
Air Peace has the same arrangement for their London route, which is coming up this month.
They outsourced the route for 2 months to a Norwegian airline, Norse Atlantic Airways, who will supply the plane, pilot, and air hostess.
Despite not being their property, the plane for the London route will bear the Air Peace brand and logo.
Air Peace will only sell tickets and then provide refreshment during the flight.
Before you think I am attacking Air Peace, they are not the only airline in Nigeria that had the arrangement.
United Nigeria Airlines and Ibom Air have wet lease agreements with the original owners of the aircraft in their fleets, so a dry and wet lease agreement is a standard operating procedure in the global airline industry.
While I’m surprised that Air Peace adopted the same standard, this:
Allen Onyema is a man who prides himself on buying new aircraft from Boeing, Airbus, Embraer, and Bombardier.
He does not buy secondhand or fairly used aircraft.
He buys them new
Because he takes pride in buying new aircraft straight from the manufacturer, he has the courage to name his aircraft after his family.
He is also a man who takes pride in hiring Nigerians to be his pilot and air hostess.
This is why he is the largest employer of labour in the airline industry.
Observing him reconsider and rethink his business strategy by opting for a wet lease underscored the challenging economic conditions necessitating a reevaluation and adoption of optimal practices to ensure Air Peave’s survival in these turbulent times.
The demerit of a wet lease is that we lose jobs to foreigners as the pilot and air hostess of the wet leased aircraft are foreigners, depriving our people who are qualified for the same role of the opportunity to compete and earn a decent living.
And for the most part, the Oyibo pilot and the crew might not be familiar with our local routes and laws.
We once learned of a local airline that transported passengers to Asaba rather than the intended destination of Abuja.
That expensive mistake happened because the aircraft in question was a wet-leased aircraft manned by an Oyibo pilot and an Oyibo air hostess who don’t even understand English.
So you see the point.
Another demerit of a wet lease is capital flight.
These local airlines are always under pressure every month, sourcing for dollars from the black market to pay for the monthly retainer to the foreign airlines that provide aircraft for their operations under the wet lease agreement.
This demand for dollars every month puts pressure on the local currency.
If these airlines had owned the aircraft, we could have kept the money here, which would have nourished and expanded our economy.
Let’s say, for instance, that Air Peace pays $100,000 every month for one wet-leased aircraft.
If Air Peace had owned the aircraft instead of a third party, imagine the impact and the jobs it would have created with the $100,000 monthly retainer.
The merit and advantage are that it is cheaper for local airlines to do wet leasing instead of buying and owing the aircraft.
One commercial aircraft costs a lot of money, and delivery takes time.
Aircraft are what you buy off the shelf, like a carton of indomie.
It takes a lot of time and effort to deliver one aircraft.
For example, if United Nigeria Airlines signs an agreement with Boeing to deliver an aircraft today, it will take at least 2 years for Boeing to deliver it.
But with a wet lease, you get the aircraft from the lessor the same week the contract was signed and payment was made.
And it is cheaper to wet lease than buy a commercial airline because the burden of buying spare parts and maintenance lies on the shoulders of the lessors( the owners of the aircraft) and not the company leasing from them.
Therefore, Allen Onyema no longer has to worry about finding the dollar to buy spare parts; the lessor company is now in charge.
The local airline company also saves a lot of money with a wet lease agreement because it doesn’t have to pay pilots, engineers, and air hostesses’ salaries every month.
For our local airline industry to scale, it is important for the local airlines to be able to buy and maintain aircraft and make not-wet-lease arrangements, which is the most convenient arrangement that all local airlines are making at the moment to stay afloat.
The biggest airlines in the world, like Delta Airlines and Emirates, don’t wet lease.
They buy and maintain their aircraft and crew, but this can only happen in Nigeria when our government provides an enabling ground for these local airlines to flourish.
Seeing the minister of Avaiton, Festus Keyamo, in a viral video marketing the Airbus brand of aircraft was shameful to watch, which shows the man doesn’t understand why he was appointed to be a minister in the first place.
The thing that made Allen rethink his business model of buying and naming his aircraft after his family must be a painful and serious one, and so it should be a wake-up call to our government to act.
Air Peace can be the next Emirates airline.
I’m genuinely rooting for them,
However, it is the Nigerian government’s responsibility to establish the necessary conditions for the local airline to grow and thrive.
And the job starts now.
Chukwudi Iwuchukwu, a public/business a analyst, wrote this on his Facebook page.
