Commercialise presidential jet- A goldmine and better option
Unexpected political and economic change has come to Malawi albeit under a sad cloud as we have lost a President, the late Bingu wa Mutharika. The last three years of Pesident Mutharika’s tenure were tumultuous to say the least, characterised by megalomaniac decisions that alienated the government from various sectors of the nation, one of which was to purchase a presidential jet, a Falcon 900EX in 2009 at a reported whooping cost of USD22 million.
This was at a time when Malawi was in reverse gear economically with our foreign exchange reserves tenuously hovering on the three month import cover level. No doubt the purchase of the jet was negatively received by all and sundry. There was a public outcry as to how a poor country like ours could afford to buy and maintain such an expensive plane.
The donors were quick to apprehend Malawi, and in the case of Britain, aid was cut by GBP3million in 2010 as a direct result of this unthinkable decision. The repercussion of this and many other bad economic undertakings of the past three years are being felt to date as Malawi is still reeling in acute forex crunch that led to shortages of fuel, drugs and other basic commodities. Life became a living hell for millions of Malawians as queues became the order of the day.
Now with the political landscape changed and a new sheriff in town, Malawi has been offered a lifeline to correct the wrongs of the past three years. The political correction is the easy bit, but the economic one will be tough yet not insurmountable. President Mrs Joyce Banda has started very well, as she has won the goodwill of all Malawians and the donor nations alike.
As she announced last week, Malawi faces deep economic challenges that will require at least $1billion to combat in the next one and half years. One of the pressing issues she and her government will be addressing immediately is the thorny issue of the presidential jet. On this, she says cabinet will decide whether to sell the plane since this is one of the conditions that the donors had given the former Government in order to resume aid.
However, much as the Late President made a costly mistake in purchasing this plane, reselling it at this time may not be the best economic decision. There could be other options that could be explored to give Malawiansbetter value for money, turning in what was a catastrophic economic decision into a gold mine.
Writing on the social network site Facebook, Eddie Naming’ona, an accountant based in Washington DC had the following to say:
“Please don’t sell the presidential jet. Negotiate with the donors and keep this long term investment home. Renegotiate the contract and have our own pilots fly this thing. We have very experienced Malawian pilots that just need to be paid accordingly to return home. It was a good investment under Bingu and it is still one today”.
The above is one of the best solutions to this economic hole we dug ourselves into. While we renegotiate the contract of the plane, we should go a step further and commercialize this jet through Air Malawi, our ailing national airliner with less than 3 planes. The presidential jet, a Falcon 900EX has numerous advantages.
According to Jet Advisors LLC, The Falcon 900EX can fly a long-range mission of 4,940 miles (4,300 nautical miles) at .75 Mach, or a 4,480 mile (3,900 nautical miles) high-speed trip at .85 Mach. Its maximum range is 5,180 miles (4,500 nautical miles). It can cruise at altitudes as high as 51,000 feet and is rated to 9.3 psi, meaning it maintains a sea level cabin at 25,300 feet.
Furthermore the cabin of the Falcon 900EX is huge at 6.1 feet high, 7.7 feet wide, 39 feet long (not including the cockpit), and has a total volume of 1,264 cubic feet. Standard seating is between eight and twelve passengers in a double-club configuration and a three-person divan.
However, other sources state that the sitting can be configured to carry up to 20 passengers. This is where the commercialisation comes in. Having configured the jet to carry the maximum number of passengers possible, the Government should then sublease the jet to Air Malawi who should be operating premium service on viable commercial routes, preferably long range missions such as Lilongwe-London-New York. It could also be operating the premium service between Lilongwe to Johannesburg since this is a popular route in addition to the Blantyre-Lilongwe-Mzuzu domestic route. In turn, Air Malawi could be responsible for the maintenance of the jet in addition to the lease payments.
A thorough analysis of the above option could prove cost effective and better value for money than outright sale of the jet. When selling the jet, it is imperative to consider the prevailing global economic conditions. Currently, the world economy is mired in recession and business is slow. In the UK, there has been a double dip recession while the Euro zone is showing no signs of recovery from the debt crisis.With elections just around the corner, America is still struggling to recover from the sub-prime mortgage fuelled financial crisis.
Consequently, our potent customers could be the Chinese who seem to have money to buy anything that is “buyable”. The problem with the Chinese is that we could end up getting a raw deal as they are known to be not the best customers. Current market value of second hand jets like the one we have range from USD18,000, 000 to USD26,000,000. With a distress sale like the one we are about to make, chances of recouping a greater part of the purchase price are very minimal.
We could end up selling it for half the value of the jet, thus short changing Malawians. Therefore, as Naming’ona pleaded, let us not sale the jet. Rather, let us renegotiate the contact, sublease it to Air Malawi, pay our own local pilots and run it as a commercial jet. In addition to pehpas a better return on investment, the president will also have access to it as and when she needs it, of course at a cost payable to Air Malawi.
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