Hassenstab: I’m optimistic about Delta’s future in Africa

With 4000 flights daily to its destinations across the globe with a codeshare arrangement with Kenya Airways, Delta Air Lines is regarded as one of the biggest airlines in the world. The carrier’s Director of Sales, Middle East, Africa and India, Paul Hassenstab in this interview with WOLE SHADARE speaks of its impact in Nigeria and the West African market, investment in infrastructure and how to sustain its market share among others.

Delta is regarded as the most admired company in the world by Fortune. How do you feel about it?

Paul Hassenstab

We continue to be humble. We couldn’t be more proud of the Delta team for being named on Fortune’s list of Most Admired Companies for the 10th year in a row. This is a huge testament and a recognition of all the hard work, dedication and success. In addition to Delta’s evolving brand experiences, the airline has been consistently recognised for its operational reliability – reflecting the airline’s operational complexity and the exemplary work of Delta people to achieve on-time performance while limiting the impact of disruption to its customers. If you look at the Nigerian customers who travel to the United States, we have great customers in them. Today, we are going to be talking about Nigeria and African markets in general. This is just a general overview. We have an emerging relationship with Kenya Airways on a codeshare basis. We have a great foundation in Africa with seven times a week to Nigeria, daily to Johannesburg, daily to Ghana and three times a week to Cape Town. We have 4000 flights in the United States and the region we serve. People want to travel in style to the United States for business and we have our partners in Air France-KLM.

How has the market been to Delta Air Lines?

This market has been good to us in the last 17 years that we have been here. Our entire ground team here including Nigerian nationals are doing a tremendous job. We also have dedicated airport services for our dedicated passengers and take them through Immigration. We are also involved in community engagement, which is central to what we do. We have done some great work here and achievements with Junior Achievement with breast cancer awareness and working with many organizations that are important to Nigeria. We are very much committed to that. When you think of Delta, we are commercially thinking of what we can offer. We are investing one per cent back into the community. In Nigeria, people have been very kind and I am very happy to have this conversation.

We need to talk about Delta in Nigeria and your global operation. How has it been in the last 17 years? Could you give a rundown of how it has been in the past 17 years of operations to Nigeria? How good has it been for Delta and the challenges encountered operating in Nigeria?

17 years ago, I was not sitting in this chair. Our strategy has been working for us even with ups and downs in the market. If you look at the footprint we have in West Africa, this has been a great relationship and it brings value to Nigerians from the commercial side of it and it is a good one between the two countries and we see a lot of traffic, the successes we have and a lot of support we have in the market.

Delta, African, the Nigerian market is the biggest in Africa, what would you want to be known for in this market as an airline?

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I think we want to continue to be the premium carrier of choice for Nigeria. That is the commercial side of it. We also want to be committed to the community in Nigeria. We are going to have a flight at noon today and next week, we are going to be back working with the community with our partners. It is good news.

Your company operates flights to Lagos, how about Abuja and Port-Harcourt?

Right now, our primary goal is to make our daily service work for us. We love to expand our operations. If you look at Delta, in terms of the wide-body aeroplanes that we operate, today, we have roughly 165 wide-bodies that we deploy to all around the international stations around the world. We just placed a new order with Airbus coupled of weeks ago with new A350s 900 and 1000 and also A350 neo which we equally taken delivery of and I think that will give us the opportunity to expand as the business case in each market but today, our focus is making things work for us.

It is alleged that Delta deploys its oldest aircraft to the Nigerian market, how true is that?

I will take it this way. We deploy aircraft that we need to deploy on a route. Today, we have A330-200 with Delta premium select. As I said, we have about 165 wide bodies. We try our best to deploy our assets to the market and we are proud of that service the A330-200 is the choice of customers.

You oversee the EMA or what are those peculiarities about the African market and what are those challenges about this market called Africa?

This is a great point and maybe I should add that I am into marketing and management; in Europe, the Middle East, Africa and India I have in total 33 stations, and 4000 flights a week. The thing I appreciate the most about being in this position is that I have to travel a lot; my wife misses me during the week and I see her at the weekends I have to travel between India and Johannesburg and back and unlike the European market that is a bit matured with its challenges, capacity during and after the pandemic. I am optimistic about Delta’s future in Africa. We have challenges with things outside of our control but I view every challenge with opportunity. There were challenges but we will continue to serve.

Looking at the competition in this market, how would you describe it because of the Open Skies agreement between Nigeria and the US; two Nigerian airlines equally planning to join Delta on the route. Do you fear competition on this route? What are the things you are doing to up the game? Secondly, two years ago Delta spent $12 billion on products, what other investments are you planning especially on airport infrastructure and some other things that can make you top the competition?

That is a very good question and thank you for the question. We don’t fear competition. Competition makes us better. They make people better. The second part of your question talks about airports which brings me to what I discussed earlier. I will go back to the slide that talks about the airport. The pandemic did not allow for enough throughput at the airports in the United States. I think the investment is $12 billion into the US domestic airports and I think we are going to accelerate our investment. We hope that someday we can host you in Atlanta to have a first hand as we try to build the next generation of the airport experience and to think of what it does look like; you arrive at the airport and maybe have your baggage checked in, tagged bags and go through security, we have facial ID recognition and it is something to see. We are going to be 100 years old next year. We were born in 1925. We look forward to celebrating it. It is a testament to the service. That stands out. We have a model that takes care of customers and that makes customers come back.

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Can you tell us a little about the Nigerian market in numbers?

We operate the Nigerian route seven times a week. We have 3100 seats over seven times weekly. Those are the numbers.

I am talking about the load factor. What is the load factor in the last couple of years in the Lagos market?

I can’t give you the total figure now but if you benchmark 2019 because it was normal with 75, 80% load factor under demand and revenue side. That was where we were and of course, we would like to get that back but today, we are at 75%.

One challenge foreign airlines generally have in this market is the issue of Forex to enable airlines to repatriate their earnings. Delta is not exempted. How is this affecting you?

Today, we are selling in USD only. We have accepted Naira in the past but because of Forex issues, we are accepting only USD.

Does that affect your load factor in any way?

I think the market is used to that. We are comfortable with that position today.

Have you returned to the pre-pandemic level in the Nigerian market?

We are about 75, 80% recovered.

One contentious issue in Nigeria is about high fares by comparing the Nigerian market with the market in Ghana. I need to be educated on this because of a lot of arguments that fares are very expensive in the Nigerian market compared with Ghana with the same equidistance, why is that so? It is also important to explain to us how fares are arrived at.

What I will say is this. Fares are done in terms of demand because of people who had been locked down during the pandemic making travel demand and that certainly has an impact on pricing. I can say that we are competitive in pricing in this market.

Are you looking at collaboration with Nigerian airlines in the area of passenger distribution? You have a codeshare with Kenya Airways. Are you not planning the same deal with any Nigerian carrier to help you distribute your passengers within the country?

We welcome every future relationship. We have a great partnership with Air France-KLM in this market and an emerging relationship with Kenya Airways on a codeshare basis. We are very comfortable with those relationships. Our mission is to make them as successful as possible.

Africa with 54 countries; Delta is doing five. Do you plan to increase this in the next ten years?

I hope to be sitting here in ten years to be doing this again. Our current mission here is to make the market work. We have 27 frequencies. As we continue to take delivery of aeroplanes, we will take a look at some places we can travel to within the world. We are always looking for new opportunities in Africa and everywhere else.

Some time ago, you introduced the premium economy cabin. I don’t know if that is still there at the moment. At some point in the year, you brought the New York route but it appears that has not been there in the last few years, is there any reason for that? You recently changed your schedule to Lagos. You used to depart in the night around 10 pm but at the moment you depart noon, what led to that decision?

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We fly through Atlanta and by Atlanta. We fly to New York. If you want to be the leading carrier to Nigeria, you have four cabin choices and we didn’t have the premium cabin experience which we do now. It is a very good product. We have that choice. We had a nighttime schedule that worked well for some time. For operational reasons and efficiency, we need to move the schedule because the aircraft cannot sit on the ground for several hours here in Nigeria. We had to optimize that equipment. So, at the end of the day, the schedule had to be changed because of utilization and strategy. It has been a good decision and it has impacted demand significantly. We have not seen a material change in demand.

Last time at the IATA conference in Geneva, a lot was said about Sustainable Aviation Fuel. Tell us a little bit about what Delta is doing in that area.

We have shown commitment to SAF. I look at sustainability from three parts of our equipment turning to sustainable energy and our office, recycling and we are also investing in sustainable aviation fuel. We need producers to produce a bit more. We have to have ten per cent of our fuel consumption to sustainable aviation fuel. In the long term, we are looking at hydrogen power which is much longer term. We are very much committed to reducing carbon emissions by 2050. We will get in there step by step by investing through partnerships.

How sustainable is SAF apart from the fact that it is cleaner, how cheap is it compared to fossil fuel?

It is much more expensive than the jet fuel. That is the challenge.

Intra-African travel is less than 10% according to IATA. Africa is not well connected. We are looking at how Delta can take advantage of codeshare arrangements with some African airlines to deepen intra-Africa flight connections. Are you looking beyond KQ and some other airlines to help connect this continent?

In terms of emerging partnerships, I will give you the right figures in terms of connectivity in Africa. As I mentioned before we have an emerging relationship with Kenya Airways, a connection with Airlink in South Africa with regional customers into South Africa from the United States and to give the customers a choice

The airport experience in Atlanta is fantastic. At the moment in Lagos, you are still battling with infrastructure challenges. Are you making efforts to see how you can still make things better for your passengers? Can you tell us a little bit about the airport experience for your passengers?

I will go back to the very last slide we had. You recognize that unique demand for your customers. We have a team that helps with the check-in process to the lounge. We give credit to the local effort and they have to react to the unique situation.

Wole Shadare

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