The Chairman of the Nigerian Aviation Handling Company(NAHCO) Aviance Plc, Dr. Seinde Fadeni in an interview with select aviation correspondents in Lagos spoke on the recent new charges agreed on by ground handing companies and approved by the Nigerian Civil Aviation Authority(NCAA). Fadeni also said that he does not envisage any betrayal among the ground handlers as it concerns the implementation of the new charges because if there is any, the ground handlers will be at the receiving end.
The NAHCO Chairman also talked about plans by the Nigerian Aviation Handling Company (NAHCO) Plc, a major stakeholder in the ground handling business to invest N7 billion in acquiring ground handling equipment in the next one year, why he came into the aviation sector and invest in ground handling business. He spoke on other issues affecting the sub sector. Excerpts.
Sir, what is your assessment of the sector since the new owner came in?
Thank you very much. I want to say yes as you rightly said before the interview. I decided to come into the aviation sector because I see great opportunities in it and I believe that could serve as a platform to a versatile company that has been there for 41 years. I saw it as great opportunity where I could further diversify into and I believe it is a good opportunity and will I continue to strive and see what we can do with.
Yes, in getting to NAHCO, we tried to have a five years strategic programme We are moving on, although the COVID-19 pandemic has its challenge on it. We believe in it and that we are moving on with it. At the end of the day we pray that those opportunities will be harnessed to move forward.
The new ground handling charges and the alleged distrust among major players on the implementation. Sir, what have you put in place as chairman of NAHCO to ensure that these agreements are complied with?
The crucial matter is that I must thank you guy; the media especially for your role in the aviation sector because it was a buildup of media campaign with everybody’s interest to make sure we get to where we are today. First of all, no doubt about it that as of today just like you said earlier nobody has done any rate change since 1986. From then till now ,it is unbelievable we have seen the Forex . Naira fluctuations against Dollars has been so devalued to the extent that what we don’t even remember is that we don’t collect the money in Dollars but in Naira. That is the sad aspect of it and it is quite unfortunate that the two major organizations that are at the forefront of ground handling in Nigeria; NAHCO PLC and SAHCO keep on fighting themselves, keep on shortchanging themselves, keep on back-biting ourselves to have clients, which is very very sad because at the end of the day we are shooting ourselves on the foot. We are usually the big losers and airlines will always come and play on our intelligence and on our stupidity and that is the truth. We are the one that will still lose at the end of the day but unfortunately both ground handling companies and airlines go to the same foreign market to go and buy equipment. That is why when this idea was brought forth I did whatever I could do at my level as the chairman to support the project. When approvals were sort for so many things I quickly gave them anticipatory approvals and later talk to my board to go ahead because we need to do this. I believe in the project from the beginning and I knew we are going to have some challenges but thank God for everything and thank God for people like the Nigeria Civil Aviation Authority(NCAA), the Minister, everybody that participated in it and especially those who have been handling it Aviation Ground Handling Association of Nigeria (AGHAN), the chairman and the Vice Chairman, who is my own person. They put so much energy into the project to make sure that it succeeds.
At the fact of back-biting or betraying or against whatever we are doing, I don’t envisage it because at the end of day like I said earlier we will be shooting ourselves on the foot and at the end they will take advantage but we should also put just to be sure because we lost British Airways. Why did we lose British Airways? We lost British Airways because of price? And even the price we were given to British Airways were even low compared to what we are taking from Delta Air Lines, Virgin Atlantic from the same UK. It is almost double of what we take from them. Unfortunately, everybody is trying to reduce cost. It is an industry where I believe the competition should be in service not in prices. The competition should be in service not in prices. The prices should be cast in stone and let them make their choice. The point is that if we are able to keep to this, we will still make what we have to make change. Even if you are doing one or two, it is better than doing five. For example, we are talking about a wide body that is supposed to be handled for $3,000 is been handled for $400. If you do one at $3,000 and even if I do four or five for $400, it will not be up to $3,000. It makes sense for me to just do one and keep my head. The truth of the matter is that if we stamp our feet and these airline owners knows that the other ground handling company is going to do the same price, they will not negotiate, they will not go back. The most important thing is that government should just say I am going to take my 5% from the cost. At the end of the day nobody will do otherwise except you want to pay out of your own pocket.
How were the ground handling companies able to survive and sustaining the safety standard of airports as guaranteed by NCAA despite the meagre profit? Secondly, you said that British Airways demanded for lower charges. Was BA doing it as a mark of entitlement because at a time it was part of the owners of NAHCO. Secondly, is there any assurance that there will not be compromise on the charges that have been agreed by the handling companies.
I don’t see any compromise. Yes, the issue of BA is quite funny and I don’t want to delve into it any longer. I have made my point by saying that it was issue of price that made them to leave. It does not call for service failure. We pride ourselves in NAHCo to provide quality service. We have the manpower; we have the professionals. It was not because of service but I think BA knows better. However, no doubt about it that they were even shareholder in NAHCO before but just as the Federal Government sold off its shares, everybody including Lufthansa and everybody. As a matter of fact, almost all the foreign airlines are trying to get themselves out of things that are not about flying even some of their office things they want to outsource them. They are trying to minimize their cost and what they do. They want to focus on their main business; flying. For me it was just a matter of choice but it is just unfortunate. They know better and I will not say more than that.
The second point is the apathy which you mentioned. Let me also tell you something which I don’t hide from you.
The Chairman of SAHCO and myself are very good friends. We are not just good friends, we are family friends and I have known him even before I bought into NAHCO. We are in the board of another company together, so we know ourselves very personally and very well. For me it has always be my desire that we come together and do this. There is no reason for anybody to have apathy or to have fears. I have given my staff instructions that on no basis should they go and engage unprofessional conduct. To me I have integrity and I live with it. Do you know that there are somethings you cannot come to me and talk about? I will not do anything that will make somebody look at me in the face and say; you are a liar. I will not do that; I will rather not get myself involve I have lived my life for the past years I have lived. I have never worked for anybody. The last time I ever get a government contract was about 35 or 40 years ago when I just came out of university. I got the firs little contract from the Federal High Court to do renovation and things like that. So, I never had anything to do with working for somebody since then. You cannot just come back to me sir let’s o find a way around it. I don’t do that. There are circumstances that people will say you have put so much money into it, why don’t you just look for a way — . Yes, I help people when they need to but for me I have other thriving businesses that I am doing. That is why anything I do I don’t put pressure on NAHCO. So, you cannot even come to me that this is what you want to do, I will not accept it.
Sir, you said that you saw opportunity in the aviation sector and keyed in. Was it in the ground handling sub sector alone you saw opportunities? Why did you decide to key into ground handling opportunity?
In 2003 or 2004, some people bided for the tollgate and that wanted me involve. It was supposed to be PPP, it is different arrangement; build, equip with toll bars and automatically open the business. I was involved for two to three months and I was tired of the place because of the way the place was being run and I left the place. Yes, I saw that there were opportunities in the aviation industry. I was just looking for a platform to use and as God will have it about four years ago somebody came to that the core investor in NAHCO was going to sell his shares
Was there any time you feel like quitting the ground handling business in view of the meagre profit the company makes?
No doubt about it that I know there was meagre profit and I understood that before I bought and by God’s grace I did not borrow the money I used in buying the shares, so, I was not under pressure. I also saw an opportunity that if a block the wastage in resources even though the profit is small if it is well managed and I block the wastages and I increase my revenue the tendency is there that I will make more money at the end of the day. Like I said earlier, I was not under pressure because the money was my personal money and I did not take loan from anybody. It is a long run and not a 100 metres . I can put up a place and give it to the next generation.
The domestic airlines have many flights compared to their international counterparts who operates one flight a day. Have you mapped out strategies to interface with domestic airline operators in view of the fact that they are also resisting paying the new charges?
The good thing is that they are Nigerians and I believe we can talk to them . But let me just take you back. About three or four years ago, I sat down with the Chairman of Air Peace Barrister Allen Onyema and we were flying to Abuja. I told him “Ol boy we are dying because of what you guys are paying us as handling charges. He said Chairman I know you guys are not getting the correct charges. I think what we need to do is to do more than talking, we need to sit down with them.. He told me point blank that yes, I know you guys have to increase and I was just joking with him. But at that time economy class; may be about N25,000 or N30,000. It is the same Nigeria where Aero Contractor use to pay N50,000 four or five years ago for ground handling. It is on record. How much was Dollar at that time , it was less than N200 . At the end of the day, we may say ware not charging them the same price as we are charges the foreign airlines but if you do something more frequently and you have multiple of them you will be able to manage but unfortunately, the reality of it is the fact that whether you like it or not whether it is multiple or once it is the same manpower that you use every time. If the same size of plane, you have to use the same manpower, materials, machines and diesel is going crazy everyday.
Are the ground handling companies thinking of partnering with one another to deliver services at airports? Or are they also thinking of having a clearing house just like airlines to settle financial transactions among ground handling companies?
We started now on a good note. If this one succeed so many other things will follow and I believe it will succeed. I am a very optimistic person. Sometimes, when I put my money in business, I am very optimistic it will succeed because I am equally a strategist. However, one of the things I ask for from my friends and other people. The best thing is form a separate company like a leasing company, so that we all put our equipment into that company. We do a valuation of our assets so that if NAHCO hires N16 billion or N20 billion worth of assets and SAHCO brings in assets worth N18 billion and above worth of assets into that company, that company deploys. It is no more NAHCO, it is no more SAHCO. At the end of the day even if it is in Sokoto, who ever owns the equipment does not matter again because they have come to a pool. At the end of the day, it is that leasing company that can even go to the market and raise more money when there is need for more equipment and we are both enjoying it. What we need to do is to transfer is to transfer our workers to that leasing company. The equipment company will just be leasing equipment to us. Then we pay our workers ourselves. That is what I think is practicable. It is not like airlines where you can code share easily but if you have a separate entity like an SPV, we will all be directors there, we chose a chief executive, they have workers and they do their business, it also give them opportunity to go outside and raise fund. There are opportunities. In abroad you can have like five to 10 years’ arrangement with equipment manufacturers. So, these are some of the strategies we have been using to survive even in this terrible condition.
Earlier sir, you mention five years strategic planning, of NAHCO , How far have you gone in the five years planning and how many years is remaining for the five years to completed? And in terms of equipment acquisition for 2022?
We lost a complete year because of COVID -19 pandemic. Right now for the past two years to three years we have invested over N6 billion in equipment and for the next one year , we are thinking of investing another N7 billion . So , what we try to do is to be a bit strategic. I just talked with the head of corporate services, he just left here. we have done some forecast of where we will need the equipment because there is no need buying equipment we will not use. What we are trying to is to look at the obsolete one and take them away. Once we take them away, we bring in new ones to replace them.it is not everywhere that need the same equipment and the strategies are even changing. Before nobody carries cargo into passenger plane but now you have almost 70/20 per cent of cargoes that come into Nigeria through Ethiopian Airlines. So, we need to buy equipment that will ease the boarding of our workers unlike the way it used to be. we are strategically bringing equipment almost every day. Right now, we equipment for the next two years that will be coming mostly every month, that is what we have had with our manufacturers. I think seven tractors came in about three days ago, some high loaders are coming. We strategically make sure that in the next two to three years’ equipment are coming every month.
In view of the skyrocketing of FOREX, In what area would want the Federal Government to coming to make easier for you to purchase equipment.
We want government to coming by assisting us to get Foreign Exchange at official rate. Government look at us as a private company, which true and that is why sometimes when we find out that government parastatals what to intervene or interfere in private business, we look at it and say what exactly is going is the problem . Airline owners went to National Assembly, what has National Assembly got to with this. I flew to Abuja Thursday last week, I bought a business class ticket at N124,000, I did I got to government to complain, did I go to National Assembly. It is private sector and it is a matter of buying and selling. If I want, I buy If I don’t want I can go on road or go and get a private jet. Sometimes I use a private jet I pay $10,000, do I complain. So, why are they complaining. It is a matter of buying and selling. It is the forces of supply and demand. For me government should just create the conducive environment and give the necessary support. It is private sector and it is practiced in every part of the world. This one that we are even begging NCAA to approve is not necessary. It takes somebody that has excess money somewhere to put in this industry to be taking this kind of risk. That is the truth of it. There was no way we could survive. We were getting to extent that we could not afford equipment any longer, we could not pay staff well again. The government should just create enabling environment for business to thrive.
Plans for NAHCO staff remuneration
Staff remuneration is paramount. My people will say you can beat your chest when you are very sure of what you are doing. My staff, they should be the ones that should be able to say that. But I can say we are the one paying the best in the industry. No doubt about it. Not only that; even when you are leaving the industry, we pay you 2.6 per cent of what you have earn. Nobody does that in the industry. Apart from that you have your pension, we do profit sharing and there is performance pay. Even me sitting in this office I don’t have these opportunities. Everybody is asking how we have been able to survive. Just lately, we gave them another increase. May be it is my nature; I like people to be happy. I also know that compare to what is going in the country it is not enough. What your salary is doing is to take you home but it cannot actually take of you. It is the country and we believe with technology we can streamline and we can pay more.