Dana Air’s Accountable Manager and Chief Operating Officer, Obi Mbanuzuo in this interview with Chinedu Eze, x-rays the aviation industry and calls for the commercialisation of nation’s airports. Excerpts:
How was your maiden flight to Accra?
The maiden flight from Lagos to Accra kicked off a new era for Dana Air. Since 2008 we started we have been operating domestic service and we still intend to open more domestic routes; but we have started sub-regional flights; so the inaugural flight was a landmark for us.
Load factor on the outbound flight was encouraging. We would have started the flight earlier than we did but we have logistics issues which we have sorted out. When we arrived in Ghana the reception was wonderful and today (December 14, 2015) I noticed that people have started booking in Business Class for the Accra flights. I believe in the next couple of weeks we will have more passengers on the route.
Now, let’s look at the number of Nigerian airlines that operate to Accra from Lagos. I know that there are a lot of businesses between Nigeria and Ghana and that many Nigerian companies thrive in Ghana. But when you look at the capacity and the market, do you think there could be equilibrium that could make the route profitable for the operators?
Yes and I can tell you why. It is like Nigeria; the business point to point market is the flights between Lagos and Abuja. A lot of people travel to Abuja because it is the seat of government and people have one thing or another to do with government. So it is also in the West Coast; the biggest market in the West Coast is Lagos-Accra. A lot of Nigerian businesses have headquarters in Ghana and vice versa. Most of the big banks in Nigeria are also represented in Ghana. Nigeria and Ghana are English speaking countries. But one thing that made us take a decision to make Accra our first point in West Africa was the fact that despite the capacity already existing on the route, our customers still ask us to start service on the route. So we have yielded to this demand and we believe that despite the competition on the route, we are going to succeed. If we don’t believe that we will succeed we will not go there. We are always open to healthy competition.
It is said Dana has the best in-flight service in the domestic routes but many Nigerians yearn for the airline to change its aircraft type. Do you have the immediate plan to re-fleet?
If you go into the US and wish to travel inter-city you will find out that 60 to 70 per cent of the aircraft in use in their domestic service is Macdonald Douglas (MD) aircraft, which Dana is using. Sometimes you may not notice it is the aircraft in use because of the modern interior. But we have made concrete plans that we shall start getting delivery of more aircraft in 2016. There is a lot of discussion on-going including with the bankers. We as members of Airline Operators of Nigeria (AON) have been discussing with Central Bank of Nigeria (CBN) on how airlines could get long term financing at very low interest rate. Dana Air is seriously working towards re-fleeting.
Besides, the fact that we want to meet the taste of our customers, we are also looking at the economy of it. The MD aircraft are very good but we spend more money to maintain them. The older an airplane is the more expensive it is to be maintained. We know how much we spend to maintain them but they are very reliable, I can tell you. Our on-time performance is partly made possible because of the type of airplane we operate. They are very reliable airplanes but very expensive to maintain. The engines burn a lot of fuel so they are no more environmentally friendly. So for many reasons we are working hard to ensure that our plans come to fruition.
Looking at the domestic market, air travellers are still less than one per cent of the nation’s population. How can airlines boost its number of travellers, knowing the huge potential and what are your challenges in this area?
I had worked in aviation in Europe and one thing that happened that exploded the market there was low cost airlines like Ryanair. Every year Ryanair carries about 100 million passengers. The secret is the marketing strategy of low cost carriers. But low cost does not necessarily mean offering very cheap fares but the service. What our government needs to do is to free the airports and make their management flexible. As people know today, only Lagos, Abuja, Port Harcourt and to some extent Kano airports that are profitable, the rest are depending on these four for sustenance. But if, for example, I put a manager at Ibadan airport and give him the freedom to canvass for airlines to operate there and give them incentives; such manager can come to Dana and persuade the airline to come to Ibadan and list incentives that could attract us to Ibadan. Even the governor of the state can offer incentives that will attract airlines operate to the airport. So the airports should be commercialised in order to attract more patronage.
Ryanair can say we are flying from London to Cologne but it may not fly to Cologne airport, but a small airport very close to the city. The airport could persuade the airline to bring passengers there and it would give the best service to the airline it may not get elsewhere, including very low charges. This is because when you bring people they spend money and grow the region economically.
In Nigeria, airlines are looked at as cash cows. They are charged landing fee, navigational fee, passenger service charge, but if the country has the policy that encourages the airlines to boom aviation contribution to GDP will increase. So government must have to change its policies to promote profitable airline operation. Currently aviation contributes very little, 0.8 per cent of GDP. With that kind of boom you will see that more people will fly.
Air traffic in Nigeria is seasonal, high during celebrations, but what happens during the low seasons?
That is what happens all over the world. The big international carriers make their money in summer and now (Christmas season). The other two quarters are loss making periods but they just try to break even. But as an airline we don’t depend on the seasonal markets, we try and balance everything. But the important thing is cost, what is the cost of your operation. Sometimes you cannot increase your revenue. It follows the principle of demand and supply. You may see this is a high season because it is Christmas; if there are 200 planes flying from Lagos to Owerri you will find out that the airlines cannot increase price because there are a lot of supply. We still work on our yea round business, striving to make our operations sustainable throughout the year because we cannot depend on seasonal market.
Nigeria is so unpredictable that even during the seasons the market may not be there. For example, when the election was moved earlier in the year it jolted the traffic market, from high traffic to very low traffic. Nobody travelled during that time.
Since after 2012, what has been your average load factor compared to the past?
We are almost where our traffic was before 2012. We are very close to 80 per cent; not because of the Yuletide season, but because there has been continuous progress. Things have been up since September. 2015 has actually been good for Dana because we have been recording well over 70 per cent load factor. 2013 was the year we struggled to stand and the next year was better. 2014 was a stabilisation year.
Would you say that competition in the industry is hostile?
I don’t think so. I like competition; honest, clean competition. Airline A says I will provide this service; airline B says I will provide the same service, so the customers should make their choice.
Are you here for the long haul?
Yes. Dana is here for the long haul. Last week we sat with our bankers and we were making projections, 10 years down the line; our plans in terms aircraft acquisition and other plans. We are part of the Dana Group and Dana has been here for years. Sometimes people mistake us for a foreign airline but the core team, including the directors and other major stakeholders are Nigerians. So it is wholly indigenous and that is a testament to what happened to us in 2012 and where we are today.
There was a recent incident recorded by Dana flight from Uyo where the fuel tank was not covered and it affected the balance of the aircraft while airborne. What is your evaluation of your technical team?
We have very efficient technical team without which the Nigerian Civil Aviation Authority would not have given us approvals. Technically we have improved significantly from the past and we have learnt our lessons. In aviation we have what we call fail safe. Most aircraft have three hydraulic systems on-board. One system handles breaks, one handles flaps and the other handles another thing. They all have backups so that when you lose one you depend on the back up.
On the incident you are referring to, the aircraft is designed in a way that before you close the fuel cap the pilot has to press a button inside the aircraft. But in this case somebody pressed a button and the person on the ground thought he had closed it. If you ask me as Accountable Manager, the pilot cannot be indicted in any way. In fact, the pilot should be commended. Yes, it was an oversight but as soon as the pilot noticed it he decided to land in the next nearest airport which is Port Harcourt. I know that some other airlines would have headed to Lagos because that was our destination but he decided to land in Port Harcourt.
I was informed immediately it happened. It took him about 10 minutes to get to Port Harcourt. We were all informed even in Port Harcourt where he landed. That was why 20 minutes after his lading there they were back in the air. Like every airline will say, safety is our priority. But we go further than that to ensure that we maintain safe operation. When the flight landed in Lagos the pilot immediately issued the Mandatory Occurrence Report to NCAA, which sent inspectors to come and look things over. There was really nothing technically wrong with the airplane, but we had to follow the rules.
How do you indigenise your expatriate pilots in terms of making them understand the Nigerian airspace, airport locations and the turbulence prone areas in the airspace?
We have expatriate pilots but we have more Nigerian pilots. We recently employed 15 Nigerian pilots. As I speak to you six of them are in South Africa doing training and they would be back in Nigeria on December 22 and the second batch will leave for South Africa on December 16 for training. We do have Nigerian and expatriate pilots. Expatriate pilots are only brought in because of experience. We rarely have ab initio expatriate pilots. When we bring in expatriate pilot he flies 50 hours with safety pilot to learn the Nigeria’s airspace.
How have you been able to retain loyal customers despite what happened?
It is because the service we provide on board has not been matched by any other airline. We do our best to maintain on-time performance, but that does not mean that we don’t fail to keep to time sometimes, but we have been able to maintain on-time for over 80 per cent of flights. So we have good on-time performance and good service.
