Why Profitable Flight Operations Not Achievable In Nigeria

How has doing business in this climate been?

We’ve been doing things to promote this economy, and we are not involved in dubious activities. We pray for every other airline everyday. We do not want the not-so-good stories of the past to happen again to any airline. In the last eleven months, we’ve airlifted over half a million passengers with five out of our seven aircraft, and that is very remarkable. Within the same period, Air Peace was called upon to undertake the development of a new route, which is the Kebbi International airport. This has never happened to a new airline in Nigeria. I believe it is because we showed strength, capacity and zeal towards doing the right thing.

 

Any plan to expand your operational scope to meet domestic needs? of passengers?

We started with five locations and later added Asaba to make it six. But when we discovered Asaba was a dangerous field, we pulled out. We were the first airline to do that because we have zero tolerance to anything unsafe. It was not an easy decision, but it was borne out of commitment to safety, above business considerations. I’m sure other airlines knew that Asaba runway is unsafe. I knew the Easterners wanted Air Peace so badly, but we had to take decision, when one day I flew there in an executive jet and I discovered that my plane was bumping on landing. I called my director of flight operations to refund passengers’ money. I also told him we must stop operations to Asaba. It was a decision taken with every sense of patriotism and commitment to safety. I’m sure it was when I gave a press conference that Asaba was an accident waiting to happen that the Federal Government decided to act. Aviation business is not all about making money; there is no money in it to start with. We are here to create jobs; this is my conviction. So, we replaced Asaba with Calabar.

About six months into our operations, we added two more aircrafts to our fleet, making it nine. Two months after, we acquired two more Boeing, making it eleven. However, we sold two of our jets to the British Airways. I doubt if that airline has ever bought used aircraft in Nigeria from another airline before. That this happened is a testimony to the fact that Air Peace is doing what others may not be doing. Our airline is being modeled after South West Airlines of the United States. If you ask my baggage handlers, where we are today, he or she can tell you. Communication trickles down, as it is not a one-man thing. ?One man may own the airline, but the governance structure of Air peace gives room for other people to contribute.

A young lady of less than 35 years is the Managing Director of Air Peace. I always recognise quality. I own Air Peace 100 percent with my wife and children. But in order to assure and ensure safety of the flying public in Nigeria, we decided to outsource maintenance. Everything about commercial flight operations is maintenance. Though you can buy a new plane today, but if you don’t follow maintenance schedule, the plane will crash. As it is key to safety, we decided to outsource our maintenance to BCT Aviation Maintenance Company, a UK based organisation. I brought them at a huge cost, and they are here in Nigeria, providing daily maintenance. They are so strict. The other day, some items in the First Aid box were missing; they grounded the plane and asked passengers to alight. We had to apologise to passengers for the delay. What is right must be done. At Air Peace, we don’t cut corners. We have the best pilots in the land. All the chief pilots of other airlines in this country are presently flying Air peace. So, they all have the experience.

 

How do you motivate your workforce?

If they are ill motivated, they can breech safety. If you owe a worker five months salary, he might be pushed into doing something bad. For instance, he can weigh a 50kg load and someone will give him N5, 000 bribery to load the luggage unto your aircraft to Abuja unaccompanied, which could turn out to be a bomb. At Air Peace, we don’t owe salaries, because we cut our coat according to the size of the material we have. We ensure that salaries are paid on the 25th of every month. If this falls on a Saturday, we pay it on the 24th, and if it falls on a Sunday, we pay it on the 23rd. These are not hidden facts. It is not because we have the money, but because I had the painful experience of being owed, where I served as a lawyer. So, I decided that when setting up my own company, I would not owe anybody. And from 1992, when I floated my company, I ensure that my staff were paid on the 25th of every month. I have carried on like that, not because my business principle is worker-friendly. I am a very proud person, so I don’t want somebody to ever come and say Allen Onyema owes me three months salary. Even the pilots are well remunerated, and they receive their salary as at when due. By doing so, you give them that comfort. So, safety begins with how well your staff is motivated.

 

Are there plans to expand your operational frontiers beyond Nigeria?

The Federal Government has granted another stretch to Air Peace. I don’t think any other airline in Nigeria got the approval to move beyond Nigeria in less than one year of operation, but we got it because we have proven our capability. Air Peace might be one year old, but we ensure that things are done appropriately. We have an expansion policy in sight. In the coming months, we will start hitting African nations. And of course, by next year, we would also like going international, to Asia and Europe.

 

Which African states are we looking at?

We have been given permission to go to Niger, Cote d’ivoire, Gabon, Ghana, Senegal and Cameroun. In the long term, we are looking at Europe and Asia, and we believe that when the time comes, we would be allowed to do so. In fact, the government should allow any Nigerian airline that is ready to do all those things and bring revenue to this country. It will stop capital flight out of this country.

 

Are you processing IATA approval to enable you go international?

Of course, we’ve started our IATA workshop since almost two months now. They came to us, and we agreed and subscribed to it. They came from abroad to train our people. I’m sure within the first quarter of next year, we will be there.

 

What are the major challenges faced since you commenced operation?

First of all, within the industry itself, there is what we call devilish envy, which militates against unity and cooperation. We don’t speak with one voice. Secondly, government policies pose serious challenge. I have discovered that so many people advising government have no business doing so. There are so many people out there who call themselves stakeholders. They probably might have been in the industry, or are trained engineers and pilots. But that does not make them experts in the aviation business. If we don’t get policies right, we’ll continue to go down. Nigeria has had over 50 airlines, but only five or six are operating. That is not complimentary. And why have they gone down? While some of the faults could be traced to the owners, majority of the reasons are traceable to government policies. I am not talking about the present administration, but government over time. If this particular government does not look before it leaps, it may make the same mistakes. Because we have a lot of people out there, calling themselves experts, technocrats and stakeholders in the industry. They give government advice based on primordial sentiments.

Another challenge is that there are so many unviable airports in Nigeria. In the United States, anywhere you are going, the aircraft is full to capacity. But in Nigeria, this is not constant. When coming from Abuja, you can have full load, but going, you are flying an almost empty plane. Some airports have no one going there on certain days. We have over 170 million Nigerians, but less than one percent are flying. That is the number one factor militating against Nigerian airlines’ growth. All over the world, the price of fuel has gone down, but in Nigeria, the price has tripled.

Government should do something about it so that the airlines can grow. Airport infrastructure is another problem. Most of the airlines don’t fly at night, which means that by 6pm or 6:30pm, most of the planes must be on ground (AOG). But this should only occur, when there is technical fault. In Nigeria, it is not only technical problem that makes our aircraft AOG. The inadequacies of our airports create more AOG than technical issues. We pay through our nose to insure our aircraft. Abroad, it is cheaper to insure airplanes. But the insurance laws do not permit us to go out of Nigeria to insure our planes. It is Nigerian insurance companies that insure planes, and then they get underwriters from abroad. We paid over $1.6M to insure about four aircraft. Everything about aviation is computed in dollars. From N150 to a dollar, it has now become N235. You also buy spare parts and some members of the crew are paid in dollars monthly. To get the dollars to buy is a problem. We pay as much as 22.5 percent interest on some airplanes. In other climes, they get funding at single digit interest. Business all over the world thrives on credit. We need support.

 

http://www.ngrguardiannews.com/2015/10/why-profitable-flight-operations-not-achievable-in-nigeria-by-onyema/

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