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Africa: Synergy among Nigerian airlines will benefit aviation industry immensely says CEO of United Nigeria Airlines

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Dr. Obiora Okonkwo is the Chairman/CEO of one of the latest entrants into Nigerian aviation space, United Nigeria Airlines. In this interview, he spoke on – among several issues – the need for domestic carriers to cooperate in order to provide efficient services to customers and also cut back costs.

Published on thisdaylive.com, Chinedu Eze brings the excerpts of the interview. Please read the full article below…

The Chairman/CEO, United Nigeria Airlines, Dr. Obiora Okonkwo, in this interview said there is need for domestic carriers to cooperate in order to provide efficient services to customers and also cut back costs. He also spoke about the impact of high cost of fuel on airlines and consequent high airfares. Chinedu Eze brings the excerpts:

United Nigeria commenced operations over two months ago, what are you looking at with regards to creating more jobs for Nigerians within the next five years?
For us to be flying today, that means we have employed a whole lot of people. Some of them, up to 50 to 60 per cent, are having their first experience in aviation and they know aviation is very strict. There must be training, there must be indoctrination, there must be standard they have to meet.

For us, these number of people are those who have benefited from the opportunities we have created. So that is guaranteed and confirmed. Recruiting more people is also in the pipeline as we expand our routes; open our operational base and that will go on and on. The more aircraft we have, the more people that will be employed.

The price of aviation fuel has skyrocketed, how has this affected your operations? Secondly on the airfares, can you say the airlines are charging appropriately now or it is just a matter of demand and supply?
Well, honestly speaking if you look at the cost of operations in this industry, I might say that there may not be so much amount of money to pay for any ticket that will be too much. You would not like to have it. So, how I wish that what we have is the kind of rate I would like to be seeing. For some seasons, you know, when you have to fly full and then come back empty you have to find a way to cover the cost of empty flight.

So, people should really understand that operating these airlines takes huge cost. So, when that comes your way, please understand that it is for the interest of the business.
In terms of the fuel price, it is a great thing of concern. We started operation at N160 per litre and when you know that the cost component of our aviation fuel is about 30 to 40 per cent.

So when you move from N160 to N270 per litre something within a space of two months, then one ordinarily should expect that minimum ticket sales, should be almost increased by 50 per cent, especially when the cost component is 30 40 per cent. It is a great thing of concern. I don’t know what is leading to that.

But I know that a whole lot of things in Nigeria are going up. But surely for the industry to even remain operational, I am not talking about viable now, certain cost components must have to be adjusted. And the only way you take it back is through the ticketing or cargo, if you are doing cargo, or courier, if you are doing courier.

There is no other thing, you cannot take your aircraft back and sell to make money. You have to ensure that aircraft are serviceable, you have to buy fuel and you have to pay for other operations costs. The staff will not want to hear that your cost is going high, so you want to reduce the salaries; therefore the cost of tickets should be able to offset your cost of operation. So the media should help to educate members of the public that they need to understand that for the aviation industry to be available to service them and viable to the investor, for more people to come in and even for the split to be expanded, they need to understand and cooperate.

But I want to believe that the operators will not be unreasonable at all. And there are rooms that people take advantage of low prices, advise them go to the website, book their tickets in advance and save your time. If you have to go there at the peak time or late hour, you have to pay the maximum cost.

It is not only in the aviation, also in the hotel. You might check into a hotel on website, after one week stay and pay $100 overseas; then you want to check in back because you missed your flight, same room, they might ask you to pay $400, the time has changed. But it is my wish that all the excessive cost, one way or the other, that certain intervention or policies that will reduce them so that the service will be available to a lot more people who might need it. Because there is so much risks now traveling by road.

The new Managing Director of Aero Contractors has canvassed for partnership among Nigerian airlines, saying current rivalry and competition undermine the opportunities inherent in working together. What is your view about this?
I agree with you and the opinion of the new manager and management of Aero. I am a strong advocate of cooperation in the industry. The market is huge. There should be a synergy among the operators. In a short time there could even be a possibility of mergers, people can merge together to become stronger and bigger airlines and use common facilities for themselves.

This is because the resultant effect is huge when you partner with others. You have aircraft that has gone for maintenance, you can cooperate with other airlines to operate your routes and this will save you operational costs. The industry has a room for cooperation; the cooperation enables those operators to exchange tools. I think that it is a good way to reduce certain costs and then even exchange of spare parts. You might have a spare part lying in your office or store that you don’t need, and your co-operator needed it immediately to get flying before his own arrives in a few days. Exchanging it, that is borrowing and then return it, I encourage it.

We are open and willing to maintain such relationship and we have signed such MoU with some operators. There is really no need for anybody to be envious of one another. The market is huge; corporation will be mutually beneficial to all who are involved in it. On the issue of foreign exchange, I will say that it is a big problem. It is one of the questions I was asking today. It is big problem.

If you have to approach your bank, if they bid for you this week, if you don’t get it, you have to wait for the next two weeks for even that window to open. As at last two weeks, our bank, according to the information we got, they have not gotten any $1 allocation from the bid process since February.
You can imagine if you rely on that to make things happen, it means you cannot fly.

It is a big stress in the industry; I am hoping and you know this aircraft business, you might take off well, when you land; you discover that there is something that needs your attention. A snag can force you to ground the aircraft until you find the solution. The solution is spare parts and some of these things are not available locally. You have to source the money to get them and you have to make sure that it starts flying again. Otherwise, you will be losing revenue.

I am advocating for a special forex window for the aviation industry. If it should be considered and that this is window will keep the airline and the industry alive. So I think also that a support system beyond that window is required, surviving COVID-19 in this era has never been an easy thing for every industry.

Similar businesses overseas have been hugely supported by their countries with different policies as much as I know. We need to be encouraged to be stronger on our feet. This is a service industry and in service, you obviously think first of all of your clients before you think of revenue. And a little support from the government will help the operators to provide better service to the citizens.

And then they just don’t move around on holidays. Air travel, transportation by any means strengthens the economy. It helps economic growth; it helps businesses, and commerce. So it is one of the critical factors and it is also a matter of national security. So it is not just something that should be left alone in the hands the operators.

You have been in operation for two months, what would you say you have learnt, have there been challenges you are grappling with and on your Maintenance, Repair and Overhaul (MRO), are you looking at partnering with other investors?
On the MRO, yes we are in talks with some technical partners and we have gotten to advanced stage. On the issues of delay you are right. And that is where I solicit with the media team in the aviation industry.

You can help the aviation industry; you can educate the passengers. One expects that when there is a weather problem in Owerri, or let’s say in our Asaba, if bad weather is announced, we expect that there should be an information officially not only from NIMET, but from journalists that they should expect delayed flight schedule in order so that any passenger going to the airport knows that this is for the reason of bad weather. This enlightenment is very, very important.

Sometimes the passengers are not educated well on what is really happening. Airline official may tell them that we cannot go to Asaba because of weather. The passenger will retort, but others are flying and landing. So the industry must come together to know how to enlighten and educate passengers. They should be made to know that there is standard procedure for every airline. It will help to reduce the tension that is being experienced.

Now if you are about to take off and you have safety as your watchword, and there is snag in the aircraft, you must have to wait to find out what the reason is. Some people don’t understand; they just want you to fly.

On the issue of safety, the truth of the matter is that having been close to this industry, there is no operator under any circumstance that will want to be part of a problem while his aircraft is on the ground. Most of these things are usually beyond the control of the operators. But obviously some reasons might be poor management, but it is minimal. You people should find a way to come together to educate the passengers, especially, when they come with those damaging report, and bad intents on the airline, it takes a big toll on these people.

You can come in from all the angles and do what is needful in defense of the operators and industry. Our passengers are not enlightened on the challenges that are natural. You might be taking off, and you have loaded and then you have ramp inspection by the Nigerian Civil Aviation Authority (NCAA) official. They have to do their job and then you must have to wait.

That is a delay for the man who is taking off and then it goes a vicious circle. You should take time out to write on what could possibly cause a delay. Now, what we have experienced from our own part because of our type of aircraft, this fuel, although they are now becoming more expensive, some time they are not even available in some airports. And you know there are weight issues. So if you are going from Lagos to Asaba, and all of a sudden they don’t have fuel the next day and you have scheduled your flight you will be forced to calculate the load. So when you are telling the passenger, it is either yourself or your load because anything to the contrary is violating the rule. You don’t have to be an operator and be a fuel seller. And then you must have to play by the rules for safety.

So this is one the major things we have had to encounter. Passengers have been scheduled, flight is ready to go, but there is no fuel in Asaba or that the fuel pump is bad. There are cases such that you are just queuing for your fuelling, then you are next in the queue and the pump goes bad. And you have boarded the passengers, you have loaded their things, you have to start negotiating. It is either I drop some loads or you go and then you get your loads later. These are things that could possibly cause flight delays. But any flight delay to any passenger is filled with insults to the airline.

 

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