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Monday, March 16, 2009

A rash of private jets amid want

MONEY talks. In Nigeria, it actually shouts.

Especially in the lives and lifestyles of those who have it in abundance. While the economic crisis takes its toll on Nigerians, the taste of Nigerian rich men for luxury is anything but waning. While the stock market is down and people's savings have been wiped out, a few Nigerians are still living life to the fullest, flying around in private jets. Money, indeed talks. While it has said goodbye to mostly poor Nigerians, it is screaming "watch me do wonders" in the pockets of a few.

While the market for many products is shrinking, private jet manufacturers and dealers have found a ready market in Nigeria. Indeed, Bombadier and Hawker Beechcraft Corporation, both jet manufacturers, have never had it so good.

Overflying the Nigerian airspace today are some of the best and, of course, most expensive private jets these companies have on offer.

Ironically, just as there are more commercial airlines today than ever, making commuting easier for all even without having to own a private plane, never has there been as many private jets as there are now.

"Nowhere in Africa, not even in South Africa is there the number of private jets as we have now available," said an aviation expert

And the international community has taken an interest not only in the taste of Nigerians for these private jets but the source of the money for their purchase.

Late last year, a Challenger 500 landed at the Luton Airport in England. Its sole passenger was a former presidential aide renowned for his closeness to former President Olusegun Obasanjo and still wielding considerable influence in the Umaru Musa Yar'Adua administration. That not being his first visit to England in that craft and yet another one which is known to regularly convey his wife and children to any place in the world from their base in South Africa, the British authorities picked him up and questioned him on his business deals and source of his wealth. The investigation indeed, is still going on.

In the last one year, the number of private jets bought by Nigerians has more than doubled.

Specifically, at least five Hawker 900 XP, a luxurious wonder in the air have been bought. Each, according to an official of the Hawker Beechcraft Corporation, cost $14.9 million. Another five 800 XP at the cost of $13 million each have been purchased. Two brand new Hawker 4000, which Dan Keady of Hawker Corporation confirmed, is about $21 million each, are already in Nigeria too. One belongs to a banker and the second one belongs to an oil company.

The Guardian learnt that Femi Otedola, who has just been named by FORBES magazine as one of the world's richest men may have purchased a Challenger Global 5000. This aircraft, with a Rolls Royce engine, has a luxurious seating for 14 passengers and an interior that merits the description "palace in the air." It reportedly costs about $51 million. Aliko Dangote who had preceded him on that list of the world's richest is said to have purchased a Challenger Global Express. Indeed, the Express also with a Rolls Royce engine and manufactured in 2008 was listed for $58 million in December. They are not alone. Bankers, oil industry chieftains, wheelers, dealers and even church leaders like David Oyedepo of Living Faith Church, the late Gabriel Oduyemi of Bethel Church and Enoch Adeboye of the Redeemed Christian Church of God are in the jet set.

Another rich businessman from the North, reportedly a member of the Dantata trading family, is believed to have his Gulfstrem G550 on the way to join an already ample fleet. This luxury aircraft has a seating capacity for 19 passengers and the seating areas are divided into three, with a separate dinning area. An oil company, is believed to own four Hawker planes while a fifth is due soon.

There are several other rich Nigerians like one Dr. Kashim who has two aircraft, including a Hawker 600 and a Learjet.

Business mogul, Mike Adenuga of Globacom, and another rich young man, a banker reputed to be the richest in the sector, owning the majority of his bank's shares, have already placed orders for Falcon 7X. A purchase contract sighted by The Guardian showed that the total purchase price of this plane is $49.5 million. At the contract signing, one of the buyers paid $10.9 million. Second payment was $2 million, third would be $4 million and fourth payment is $8 million. A fifth payment of $12.2 million will be made six months to delivery, while another $12.4 million represents final payment due at delivery "plus economic price adjustment." Adenuga currently owns a Challenger 604, Same as Oyedepo and Joseph Arumemi-Johnson of Arik Air.

An interesting dimension however to this jet craze is that most of the planes owned by Nigerians are registered in South Africa.

Indeed, an openly-discussed topic in the South African Aviation sector is the number of aircraft registered in that country but belonging to Nigerians and, of course, the source of the money.

"If it is the Nigerian petro-dollars, then the Saudis and the Kuwaitis must be wondering if they know the meaning of the good life, "a South African engineer said.

While unravelling the rationale behind the registration of most of the planes in South Africa and not Nigeria, The Guardian learnt that any plane registered on 5N, call sign for a Nigerian-registered plane, hardly gets good money value back. So, apart from possible concealment of ownership identity, good valuation is also one major reason the planes are registered in South Africa and not in Nigeria.

This is why across the nation's airports and private hangars the registration numbers on the jets are ZS - PPH, ZS - SGV, ZS-B0V, ZS-PTP, ZS-BOT (believed to belong to a former governor from the South West), ZS-S0V, ZS-SAH, ZS-PCT, ZS-PKY and so on. ZS is the call sign of South Africa. ZS-BOV and ZS-SOV are believed to be owned by the same person. Of course, there are some with Nigerian registration numbers like N2208L belonging to a bank or its chief executive and 3B-MGT believed to have been leased by another bank.

But another worry in the aviation circle is that not only are the planes registered in South Africa, the owners ensure that almost all the pilots, technicians, engineers and crew are also from South Africa. "Many of them who had Nigerian crew have sacked them "a source told The Guardian. Why? "Maybe the owners feel more secure with foreign crew. But such a large number of foreigners in our airspace undermine national security, not to mention the unemployment problem it creates for indigenous aviation experts," he said.

In recent times, there have been complaints all over the country about the life-style of chief executives of banks and corporate bodies who own a fairly high proportion of the jets in Nigeria.

The questions being asked especially of publicly quoted companies are: Are the aircraft part of the quoted companies' assets? Who authorised the purchase? The board or the shareholders? And could this luxurious lifestyle be a contributing factor to the plunge in the value of people's investments? Would it not be necessary to cut costs, win investors' confidence by cutting down on such things as private jets?

"When you add the cost of all these jets to the cost of their daily maintenance, you are likely to get enough to boost the nation's comatose manufacturing sector or agriculture and generate employment," said Toyin Sonola, an international lawyer and economist.

But the argument of some of the jet owners is that the aircraft is a business tool. "It is not necessarily a status symbol or evidence of ostentatious living, "said. "If you are in our kind of business, with a busy schedule across the world, you would recognise the need for the jet."

This notwithstanding, not a few Nigerians believe that the billions of naira humming in the airspace could be put to better use on ground in agriculture and infrastructural development.

ok.