Nigerian Eagle Airlines, formerly Virgin Nigeria, is looking to convert its Embraer aircraft order to a lease arrangement and, if unsuccessful, may tap rock-bottom prices to grow its Boeing 737-300 fleet.
The Lagos-based carrier placed an order for seven Embraer 170s and three 190s, with six options, in late 2007. To date, it has received two of the 190s, which will be joined by two 170s in December.
But speaking to Flight International at the AFRAA general assembly in Maputo, Nigerian Eagle chief executive Dapo Olumide said the airline "can't afford" the new aircraft, so is looking to switch to a lease arrangement. It is also keen to sell the aircraft that have already been delivered, along with the six options.
"This was a very ambitious order," says Olumide. "Where were they going to get the money from? We are in discussions with Embraer on how to restructure the order. By that I don't mean delaying the order, but how to make it more affordable."
Nigerian Eagle operates a two-type fleet comprising five leased 737-300s and two owned Embraer 190s. Olumide says the global financial crisis has caused 737-300 lease rates to plummet to about $80,000 a month and that this "giveaway price" makes them a tempting alternative to the new Embraers, even if the latter are "ideal for the west African market".
"Because of the rock-bottom  prices, it's like going to the $1 store," he says. "I've got a serious dilemma over whether I go for the cheap or the quality option."
Nigerian Eagle is looking to operate a fleet of about 20 aircraft by 2011, says Olumide. One option is an all-Boeing 737-300 fleet. Another is to retain the five 737-300s, which are needed on longer sectors, and lease 15-16 Embraers in order to lower Nigerian Eagle's finance costs. Discussions are under way with dedicated Embraer lessor Aldus Aviation.
"If the talks with Embraer fall apart, we will go with 20 geriatric 737-300s," says Olumide.