We need airlines built on solid foundation –Bristow MD

For 33 years, Capt Akin Oni has been with Bristow Helicopters (Nigeria). He rose through the ranks to become the Managing Director of the firm that specialises in servicing oil and gas sector, including search and rescue (SAR) services as a core part of its helicopter services in most of the countries in which it operates. In this interview with WOLE SHADARE, he speaks on how lull in oil and gas sector has negatively impacted helicopter operations in Nigeria, maintenance of its aircraft in-house and hope for the sector to rebound next year, among other issues. Excerpts

 

How has recession affected your operations?

Recession has had a major impact on our business. For instance, we are operating half the number of helicopters we were operating before. Our revenue is well below half of what we generated in 2014.

The change actually started in 2014 when oil price just suddenly nosedived. The impact of that has been our clients dropping aircraft and reduced activities as well.

What drives activities in the oil and gas are projects and drilling operation. People coming for helicopters are way down. We had to look at doing a lot of things to survive and we need to survive the situation, not just for us.

I am sure the competitors are experiencing the same thing. To see ourselves through this difficult period, we are hoping that things will improve. We are beginning to see a huge shift now when oil is going for $55 and going towards $60, when this thing turn, hopefully next year, we will survive this period and we will be able to go back to where we were in 2014.

The best method for this is the number of aircraft we are operating and the flight hours are less than what we are operating.

In the last one or two years, Bristow have been faced with a lot of labour-related issues, what are these issues and have you been able to resolve them?

 

 

We have excellent relationship with the labour unions.To be frank, we have not had any problem with them. I meet regularly with National Union of Air Transport Employees (NUATE) and the National Association of Aircraft Pilots and Engineers (NAAPE).The recent problem we had with NAAPE had to do with national pilots.

We have always been able to resolve issues with ATSSSAN and NUATE. We had a dialogue on what was going on in our business.We make sure that when we make those decisions, they are part of the process and they get to see and they know that it is, not something done maliciously. Because we engage them, we have done very well.

May be we have not engaged with NAAPE. May be it is something we will do and explore later. We are open to learning in that area. The only labour issue we had was with NAAPE and it has to do with pay parity and I have been in Bristow and in the next couple of weeks, I will be 33 years in Bristow.It was never a thing that was discussed.

We fought for it a long time ago. I am happy to say that I am the first Managing Director who has been able to resolve that problem.After that, we reached an agreement to pay them the same as expatriates.

So, we go through a structure when we look at each category of staff in the engineering and engineering organisation, it is exactly the same with the pilots regardless of where you come from.If you are a Nigerian and a senior pilot, you get single pilot’s If you are a Nigerian engineer, you get exactly the same pay.If you have the same experience level, the same license, you are paid well.

We have substantially increased salaries and arrears by 50 per cent. If you a senior pilot in Bristow today, you earn in the region of N60 million to N61 million per annum.

If you an entry level First Officer in Bristow, you earn well over N20 million per annum. You know the interesting side of it, because of the rotation we have in the system, you are working half the year for that level of pay.So, if you are senior pilot in the system, you earn about $75, 000.

What is the implication of airlines poaching helicopter pilots and those in fixed wing operations considering the fact that ther are many Nigerian pilots roaming the streets?

The poaching in the past is mainly with the fixed wings. I know, for example, a number of my colleagues that we went on the same pilot helicopter course now flying for Emirates and Qatar.

They come into Lagos flying the B777. Most of that has been more in the fixed wing world. We have lost a number of pilots in our organisation who went back to fixed wing and now fly for Emirates, Qatar and other people from the other airlines in the Middle East. In the early days, say ten, 15 years back, there were movements to the UK, Europe.

That has stopped. Our relationship with our pilots today has been very good. This has to do with the labour relations you talked about. It has to do with, they see a career path, they see that as Nigerians they can aspire to be anything in the organisation in the aviation industry.

The whole of the business strategy today, if you look at the top people in Bristow today, they are Nigerians.I run the business in Africa.

The business in Australia, the Far East, Asia Pacific region is run by Dapo Oyeleke. Dapo was in a pilot course after me, but Dapo used to work in the UK, but now, he runs the whole of Asia Pacific region in Australia. The most senior positions in Bristow today are held by Nigerians and that is the measure of what we do here.

A young professional coming to our organisation today can aspire to be whatever he wants to be in our organisation and I want to believe that these guys are a lot smarter than us.

You do your maintenance in-house rather than ferry aircraft overseas for maintenance, which costs so much. How are you able to do this? How much have you been able to save by curtailing capital flight considering the fact that Nigerians have been yearning for aircraft maintenance facilities?

We do all our maintenance in the country. We save a ton of dollars in doing the work in the country. At the peak of our activities here, we always had two helicopters in the hangar undergoing deep cycle like the D-check.

We don’t take them out of Nigeria, we do them here. We do our D-checks here. Either one or two of medium aircraft or large aircraft are done here and this is the reason we built our facility here.

The hangar there is dedicated to the D-checks. If you look at the cost of spare parts and actual labour on the aircraft, the larger machines cost in the region of a million dollars to maintain just one or to turn around. Effectively, that is money that would have gone out of the country, but is retained within the economy.

All our machines will be in the region of $600,000 or possibly more to maintain and it made us very competitive, the fact that we are not able to ferry aircraft out of Nigeria to go to maintenance facilities outside of the country.

We have also developed capabilities in Nigeria to do that and that is why Nigerian College of Aviation Technology in Zaria has been very good for us. We sponsored seven of their instructors to the United States.

We are the biggest beneficiary of that because they go back to Zaria. We put in about 20 or 22 nationals through that and they are back in the system.

It is not going to happen overnight; within five years, they will gather experience and will be in a position to replace older people in the system. So, maintenance cost, for us, has been largely reduced because of the capability we built in Nigeria.

On diversification, it was reported that you shifted to fixed wings type of operations. Is that still in the offing?

We don’t do schedule operations. We would like to do that; obviously that is the direction we are going. In our diversification, we are looking at building capability in routing Nigeria and to the rest of West Africa.

At the moment, because of the level of activity, what we do is none scheduled, we are focusing on providing fixed wings services for our existing helicopter operators so that when they come into Lagos or Port-Harcourt, they connect into our helicopters to go onshore and when they come back from offshore, they connect to the fixed wings to come into Lagos.

We have noticed that they have moved most of the oil and gas companies offices to Abuja. We would like you to connect from Abuja to Warri or Port-Harcourt; that is what we have done.

We are going to stay within that oil and gas and support services structure, to build the non-scheduled operations. It is not new to us, don’t forget that.

We used to do this for Shell when the company used to operate its three Dornier jets. So, we have just reintroduced that, but this time around, the aircraft is owned by Bristow as supposed to be owned by Shell.

What aircraft are you going to use to develop the fixed wing operations?

We are likely to use aircraft similar to the one we were using before, that is the Embraer 135. We expect to get additional Embraer 145’s to develop that for our unscheduled flights for the oil and gas industry and corporates.

It is something we are developing and that will be part of the bigger diversification we are looking into so that we are not solely tied to the strings of the oil and gas industry. Having been in the business for 32 years, I can say that things are pretty bad for now.

There has never been anything like this. I have never seen Bristow or competition go this way. Look at Aero Contractors. It is a sign of the times, but my prayer, my hope that next year; and it is beginning to show and I hope it continues in the north ward direction and with solution to the Niger-Delta problem, the whole place will open up again.

There was a time the Nigerian Civil Aviation Authority (NCAA) suspended your Sikorsky helicopters that were involved in two successive accidents. Do you still have confidence in the aircraft type because I know you have sizeable number of the aircraft type?

We have confidence in the Sikorsky fleet. We worked with NCAA on what we call return to service where they looked at every nook and cranny of the aircraft.

However, we remain at alert and would remain alert until the final report comes out, because it has not been published. I will be deceiving you if I say I know about what happened.

The Accident Investigation Bureau (AIB) is still working on it with the NTSB in the US and also Sikorsky. We are hoping they are going to come up with something very shortly.

Your aircraft had two accidents almost at the same time and that scared some people including your clients. How were you able to reassure people that you operate safely?

We don’t want to accept that it does happen. We don’t want it to happen to other people and we don’t want it to happen that we will develop systems in place, in-depth. Before we ever get to that point, we will see it.

We have been able to reassure our clients that we have had a run of bad events, but we have done a lot of work. We have brought them into our organisation and show them many things we do to ensure safety and we have continued to engage them on daily basis.

But internally too, we remain on our toes that whenever everything is normal, it is time to be conscious of why everything is normal and that has kept us on our toes. The structure and the system we have in place are there to ensure it never happens again.

You have spent so much money to train pilots and engineers and each pilot gulps over $250,000 to train, is your airline not scared that some of the people you trained can be poached?

We used to be very worried about poaching. In fact, we approach NCAA for assistance, but then it was poaching from our competitors. We also did some soul-searching as to why do we spend $250,000 of training a pilot and we allow them to go?

We introduced something like bonding. Ultimately, if you create an organisation the people aspire to work for and they see a career path and they see that they have been treated fairly, they see that they are being paid fairly and when they see that when you look at the rest of the industry, the pay is above the rest of them, I think you will keep people and you don’t have to worry about poaching. I can say that our retention in the last five to seven years is very good. We have not lost any of the people we have trained.

We found out that people that we have trained in our programme genuinely stay. I believe the reason we have been able to keep them is because we created a fair system where we pay properly.

We don’t delay their salary. They see a career path, they are trained adequately and they know that they can aspire to the top in Bristow, not just here but globally. 2016 has been a difficult year for aviation in Nigeria.

Airlines shrank their operations while assess to forex is so difficult for many airlines. What is your projection for the sector next year? The growth rate for aviation in Africa is either four or seven per cent.

The opportunity in Africa to grow aviation is huge. I think we have limited the growth through restriction of Bilateral Air Services Agreement (BASA).

I would like to start an operation tomorrow that would go to the rest of West Africa, to Morroco, Tunisia and other countries in North Africa. Sometimes, if you want to go to Equatorial Guinea, you would have to fly to Paris and then fly back to Malabo or you go we don’t want it to happen that we will develop systems in place, in-depth.

Before we ever get to that point, we will see it. We have been able to reassure our clients that we have had a run of bad events, but we have done a lot of work.

We have brought them into our organisation and show them many things we do to ensure safety and we have continued to engage them on daily basis.

But internally too, we remain on our toes that whenever everything is normal, it is time to be conscious of why everything is normal and that has kept us on our toes.

The structure and the system we have in place are there to ensure it never happens again. You have spent so much money to train pilots and engineers and each pilot gulps over $250,000 to train, is your airline not scared that some of the people you trained can be poached?

We used to be very worried about poaching. In fact, we approach NCAA for assistance, but then it was poaching from our competitors. We also did some soul-searching as to why do we spend $250,000 of training a pilot and we allow them to go? We introduced something like bonding.

Ultimately, if you create an organisation the people aspire to work for and they see a career path and they see that they have been treated fairly, they see that they are being paid fairly and when they see that when you look at the rest of the industry, the pay is above the rest of them, I think you will keep people and you don’t have to worry about poaching.

I can say that our retention in the last five to seven years is very good. We have not lost any of the people we have trained. We found out that people that we have trained in our programme genuinely stay.

I believe the reason we have been able to keep them is because we created a fair system where we pay properly. We don’t delay their salary. They see a career path, they are trained adequately and they know that they can aspire to the top in Bristow, not just here but globally.

2016 has been a difficult year for aviation in Nigeria. Airlines shrank their operations while assess to forex is so difficult for many airlines. What is your projection for the sector next year?

The growth rate for aviation in Africa is either four or seven per cent. The opportunity in Africa to grow aviation is huge. I think we have limited the growth through restriction of Bilateral Air Services Agreement (BASA).

I would like to start an operation tomorrow that would go to the rest of West Africa, to Morroco, Tunisia and other countries in North Africa. Sometimes, if you want to go to Equatorial Guinea, you would have to fly to Paris and then fly back to Malabo or you go to Frankfurt to fly to Malabo. There is no link between Nigeria and Malabo.

The opportunities in West Africa with the rest of the continent are enormous. There is an IATA report that goes into details about opening up the regional routes. That is the true story and that is the measure of the opportunity.

Where we struggle is that we are exposed to the dollar and that speaks to our economy. When our economy improves, we will see that GDP growth. Airlines travel is tied to GDP. Once we see that change, there will be a change in aviation.

We need to build airlines on solid foundation; it is not the fly by night operators. It might mean going to joint venture with foreign companies. They will come and invest in the economy, but I don’t think this is a business where you run a one man show; you need to open it up to several investors, spread the risk. There are opportunities in Nigeria. We don’t have a national carrier.

We need to operate and challenge KLM and others who come into Nigeria. When your money is involved, my money is involved; I will be checking what the management is doing.

The moment you introduce government into it, you create complexity and we don’t have the structure in Nigeria. I see huge opportunities in aviation in Nigeria and Africa.

I see a lot of opportunities in the oil and gas industry, but that will only happen when we get out of the recession in Nigeria and the glut of oil in the world market.

We don’t know what Russia is doing, we are going to start drilling again, we are going to start looking for people and looking for aircraft.

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