Fagbemi: NAHCo plans to retain 65% market share

Mrs. Olatokunbo Adenike Fagbemi is the newly appointed Group Managing Director of NAHCo. In this interview with WOLE SHADARE, she speaks about her vision for the firm, the incessant labour unrests and plans to invest heavily in equipment as the first step towards repositioning the company. Excerpts

When NAHCo was doing so well, SAHCOL was literally lame; SAHCOL is coming up after being privatised and they seem to be diminishing NAHCo. There seems to be animosity in your rivalry. Why did Lufthansa withdraw their shareholding in NAHCo?

I think we need to go back to the history of the two companies and I have a fair idea of both. NAHCo was set up by the foreign airlines. There was a service gap when it was set up by the foreign airlines. By that time, Nigeria Airways had Skypower Aviation Ground Handling Company and they handled Nigeria Airways and it was the leader in aviation business in Nigeria. On the other hand, there was a department in FAAN that did ground handling, so, the foreign airlines were not getting as much values. So, Sabena, British Airways, Lufthansa, KLM – all of formed that company. They had 40 per cent, 60 per cent was to FAAN and that was how NAHCO started. Most of the people that came on the foreign side were going into ground handling. SAHCOL was set up strictly for Nigeria Airways. On the domestic, it was SAHCOL forte. If you cast your mind back, the airlines on the domestic route were doing self-handling. That was SAHCOL’s business.Then, the issue of creating subsidiaries in Nigeria Airways for them to become autonomous. A more autonomous SAHCOL was a more business focused SAHCOL and trying to get businesses for itself. SAHCOLs growth started in the late 1990s and the business environment was growing. More airlines were coming, so the cake was getting bigger. As NAHCO was getting bigger, so also was SAHCOL. There is no doubt that customers have left from NAHCO to SAHCOL. Also, you have customers leaving from SAHCOL to NAHCO. It is the basis of competitive environment. When you say it is animosity between the two , I don’t think so. It is issue of competition. There are areas we need to get the CAA to work on and areas where we need to cooperate. They learn from us and we learn from them. There are areas in which we cooperate. We have to worry on issue of anti-trust in the area of price determination. This environment is free trade. So, Sabena, British Airways, Lufthansa, KLM – all of formed that company. They had 40 per cent, 60 per cent was to FAAN and that was how NAHCO started. Most of the people that came on the foreign side were going into ground handling. SAHCOL was set up strictly for Nigeria Airways. On the domestic, it was SAHCOL forte. If you cast your mind back, the airlines on the domestic route were doing self-handling. That was SAHCOL’s business.

Then, the issue of creating subsidiaries in Nigeria Airways for them to become autonomous. A more autonomous SAHCOL was a more business focused SAHCOL and trying to get businesses for itself. SAHCOLs growth started in the late 1990s and the business environment was growing. More airlines were coming, so the cake was getting bigger. As NAHCO was getting bigger, so also was SAHCOL. There is no doubt that customers have left from NAHCO to SAHCOL. Also, you have customers leaving from SAHCOL to NAHCO. It is the basis of competitive environment. When you say it is animosity between the two, I don’t think so. It is issue of competition.

There are areas we need to get the CAA to work on and areas where we need to cooperate. They learn from us and we learn from them. There are areas in which we cooperate. We have to worry on issue of anti-trust in the area of price determination. This environment is free trade. However, there has to be a band that I think we need to get the regulator to come in such that we do not compete in a way that affects safety and security because that is the most important thing when it comes to air transport. We need the regulator to ensure that there is a band that is clear.

On the issue of Lufthansa, there is no problem with Lufthansa. Lufthansa is still one of our best clients but if you cast your mind back, a few years ago, most of the airlines began to divest from ground handling. It had nothing to do with Nigeria and it had nothing to with NAHCO. It had to do with decision taken at the headquarters for these airlines to say which business do we invest in or the one they should not invest in. Each one of the airlines left NAHCO on those decisions that were made at corporate level to exit ground handling not only in Nigeria but all over the world.

If you look at Dnata; Dnata has picked some of these airlines’ businesses. Dnata is an arm of ground handling owned by Emirates. British Airways are not into that any more. So, Lufthansa in 2016 took that decision and leaving NAHCO was a corporate decision taken in 2016 that finally came into effect in 2018. In terms of what does it do to our image, I don’t how a decision that was taken in Frankfurt, UK, that was taken for every country should be an issue if there is no mischief in telling that story or mischief in receiving that story. If Lufthansa had issues, they won’t be doing business with us.

In the cause of your presentation, you mentioned the core values but didn’t give us the figures of your investment in equipment, your human resource and what the expected revenue is?

I will not tell you some trade secrets. We are still fine tuning the plan; this is why I told you that there are certain things I will not tell you for now because we are still being audited by KPMG but we setting up programmes management to drive many of our plans. We are also looking at growth within the region of five to seven times, which is audacious but very achievable given the plans we have. In terms of investments, I can tell you what we have done so far. In the last couple of months, we invested about N1.9billion in equipment. You will begin to see the equipment arrive by the end of first quarter of this year. That is the first set. By the end of the year, we would have spent about N3.6 billion in equipment. Hopefully by September, we will have the next sets of equipment that would have come in. We are going to have a master plan. What we are doing immediately is to ensure we refurbish what we have in terms of facilities. We will refresh them, to make them look better like our buildings, warehouses and all that. We will improve on all the processes within the system. That is all we are doing. On our people, I can’t tell you how much we are going to invest because we are also drawing up the peoples plan.

It is not news that NAHCo has lost some customers – some two or three years as a result of internally challenging issues. What steps are you going to take to bring back these customers that have left?

On the loss of customers, I am sure in business, you lose customers. I wouldn’t say it was due to internally challenging problems. I have not studied that much to be able to tell you that it was due to that. What I will tell you is that we will do everything we can do to retain the ones that we have. We will do everything to attract new customers. We want to set new standards, bring professionalism into air service business and we know that as we bring professionalism, customers will come to us.

How are you coping with price war between you and your competitor?

In terms of price war, I can’t tell you what the other is charging because it is based on agreement but right now, we are in the business where our customers are stronger than us. Some of them are the airlines. That is the problem we have with ground handling business globally. They are strong customers. Those strong customers also are in the cost-cutting mood. That brings a lot of pressure to us. One thing I have come to discover is to ensure that pressure on price does not come about and compromise safety and security in the provision of air services. We will champion everything to ensure that the pressure on price does not compromise safety and security.

How does incessant change of Managing Directors affect NAHCo?

You had three MDs in four years We have changed our structure. We now have a group managing director. The essence of the employment was no more valid. When you have changes, it depends on how it is perceived but what I am doing as much as possible, I talk to everybody. I find out what is happening. I am also open about everything. One of the things we are doing is selling down the vision, mission and the new cultural changes to everyone. A man can leave when he chooses to leave. Idris has left. He resigned. How do we move for ward, those are the challenges I have to solve?

What is your market share in aviation ground handling business in Nigeria?

In terms of market share, I have been told that it is about 65 per cent and one of the things that I have always challenged is to ensure that our figures are correct. What I will tell you is that we will maintain leadership. In terms of going into the realm of power, the diversification took place 2015. It is not a new thing. What has happened is when we started to do the business review, there was a company we had set up. It was into energy.

That company had capital ceded into it. What we want to do is drive that capital that it becomes a very good investment. On MCO, which is our logistics company, what we have done is that we are going into areas that will provide logistics services at a level we won’t be in competition with our clients. Still on power, there were many things we are looking at when it was set up, what were the opportunities when NEPA was being unbundled.

The company did not make any success at that but we have that company. It has been set up. We are looking at how we can play within the current regulatory framework. There are several options. We are at the drawing board right now. We are looking at different options. I am working with the DISCOs. I assure that company is coming to life. Money has been put in that company and it has to come to life.

The former MD had a battle with unions concerning labour issues, leading to protests in this place on condition of service. What are you doing to ensure that the vision you have incorporates this?

This is a unionised environment. The best we will do is to manage the union. As far as I am concerned, I think if the truth is told, decisions are better taken. Everything is on the table. If you know how much we make, then it is from what we make that we can move on. We have issues with our people and equipment and all these things require investment. We have to put those monies inside. If I move on to the condition of service; I think the negotiation for the condition of service started in September and went on for a while.

There were different perspectives playing out within the organisation. I don’t know the issues that happened with the past MD but I can confirm to you that all the basic issues on condition of service, we have practically solved them. There is nothing that is outstanding with respect to the condition of service. We know that people always use different situations to relate to other different issues. We have our issues with the unions. I have the confidence of the union. I have their words that we are working together and to make this organisation thrive.

Are you looking at expansion beyond Nigeria in your ground handling services?

You are a visionary. It is part of our vision. It is just that we are trying to keep some things close to chest. It is some of the things we are looking at.

Wole Shadare