Kayode Ojo is the Managing Director and Chief Executive Officer of NAHCOaviance. He is a seasoned finance professional with over 20 years experience, covering structured finance, treasury and investment management, strategy and business development, as well as corporate finance and business advisory services. An alumnus of University of Ife where he graduated with a B.Sc Economics in 1985, he has been involved in several landmark transactions involving packaging and deployment of medium to long-term financing for multi-national companies operating in Nigeria. He joined Nigerian Aviation Handling Company Limited (NAHCO) in 2010. In this interview with DELE FANIMOand WOLE SHADARE, he spoke on his company's plan to remain competitive in the burgeoning ground handling business, the firm's diversification policy, among other issues in the industry.TO what extent has NAHCOaviance met with international standard to be an active player in the industry'Thank you. I will go down to the history of NAHCOaviance. Before NAHCOaviance, there was NAHCO. NAHCO itself was born by the combination of foreign airlines and the then Nigeria Airways. The reason why it was born was because Nigeria Airways was then performing ground handling services, which was a model in the aviation industry. Now, airlines generally no longer provide ground support services, those things are factored out to third party. So if you take that in context, we started out as a result of the yearnings of international carriers to have international standard ground handling in Nigeria. I would say from day one, NAHCO has been meeting that standard. Let us fast forward till now, we are no longer owned by the Federal Airports Authority of Nigeria (FAAN) as it were. If you look at our clientele base in Nigeria , 80 per cent, probably 85 per cent will be international community that we service ourselves. Last but not the least and what I tell my colleagues is that if you fly a plane into Accra or Guadalajara, the standards are expected to be the same. If there are not, believe me, way beyond NAHCO, it will be an international issue, so that extent with due respect to the challenges on ground and giving God the glory, I believe that we have been in the forefront of delivery service as an international standard to our clients both local and international.In Nigeria, there are two ground handlers and NAHCO seems to have a huge market share in what is fast turning into a monopoly. Do you not see complacency setting in as a result of lack of stiff competition'First of all, let me correct an impression. Our competitor was privatised three years ago. Obviously where there is capital, returns come when there is efficiency. I can assure you that without speaking for them, they are competing and we welcome competition, competition is good for any industry, particularly a service industry. It makes sure that you are on your toes, so to that extent, it is not a monopoly. We may have a dominant position in certain areas, but we definitely compete with them. There is competition in the market. Whenever you have more than one person offering a service, people have options. So, what we need to do is to step up our game and make sure that the quality that we offer is such that our clients are happy with us and they want to stay with us.Many airlines owe NAHCO. A particular domestic airline is heavily indebted to NAHCO to the tune of close to N4 billion for services rendered. Is this huge debt not to the detriment of the firm as it may affect the quality of aviation ground services and to the aviation industry as a whole'First of all if you don't mind, let me first of all correct the impression. No airline owes NAHCO N4 billion. N4 billion is a lot of money. Our turn over last year (2010) was N6.4 billion. If anybody owes us that type of money, then we will no longer be in business. But it is true that we have airlines that owe us. In the course of doing business, it is almost inevitable that you extend credit. What behoves on you is to look at the credit terms between yourself and your customers and manage the relationship in a manner that your receivables don't push you out of business. To the extent that our business is derived demand, there are people who owe us, but not in the magnitude of N4 billion. May be some years back, we had some airlines that have now folded up. We did the prudential thing then in 2009. Largely, the airlines that we service, we worked with them to make sure that our debts are current and we don't leave it long outstanding and we don't make it too big, otherwise, like you said, it is bad for us and our ability to provide service and ensure safety and it will be bad for them. I think I should also mention that the regulator, the Nigerian Civil Aviation Authority (NCAA) is also very interested in this for the major reason of safety. At the end of the day, we realise that if anything impacts on our ability to deliver service and safety, all of us might not be in business. So, we watch that very closely and we are managing the situation.Talking about safety, with the current challenges in the country, there is a new dimension now; terrorism is something that is situated around the aviation industry. What are the measures you have put in place to ensure that you are on top of the game in the area so that you are not caught napping'There are three ways. One is infrastructure. We placed an order for up-to-date equipment to scan both imports and exports. I will also state this that the regulator is very insistent on operators having the right kind of equipment to make sure that does not happen because it has international impact. Secondly, train our people particularly to what you call insider threats. Two weeks ago, there was a seminar organized by NCAA, we participated and we were actively reviewing our own security procedures to make sure that nothing slips through. With regards to the arms seized. We operate a Customs bonded warehouse and typically, nothing happens here without ourselves and the Customs. Of course, we are law abiding citizens. When the discovery was made, you report through the channels for the record. Obviously, it wouldn't be the day it was seized that it was seen in the papers because you need to go through certain channels. I mean guns do not just come into the country like that. That was how we dealt with that. I want to also use this opportunity to speak about what we are doing in terms of transformation, rebranding and our new warehouse. We met a warehouse that was built sometimes in the 1980s; we have devoted time and money close to N2 billion to both remodel the warehouse, modernise it and extend the size a little bit. This comes of course with modern gadgets to ensure there is security, close circuit television cameras, a lot of things, the use of automation as opposed to manual because it is more easier to detect and deal with these things when you have an automated system, not something that relies on human beings. We put that in place and we work closely with both the Federal Airports Authority of Nigeria (FAAN) and the NCAA because at the end of the day, its industry responsibility and I dare say it's a national issue to make sure that we are on top of our game in terms of security.You talked about infrastructure, we want to know your assessment whether you are comfortable with the state of facilities at our airports, particularly the carousels. FAAN recently accused NAHCO for the delay in getting passengers' luggage and not the facilities. How true is this allegation'It is an issue that affects us all. However, our approach is to work with FAAN because like I mentioned before, this is a collective responsibility. We are aware that FAAN has placed orders for new equipment. We are aware that the date of arrival may have been shifted to first quarter of this year and in fairness to them, they have carried us along because they provide the infrastructure, we provide the software and the two have to work together. We would continue to work with them because it impacts on the public and I think there is a joint responsibility on our part to make sure that the public are well served and like I always say, people coming into our country have a good experience. We collaborate with them even in the area of security patrol, whatever we can do as good corporate citizens to make sure that things flow around the airport. Like I said, we have very good rapport with current leadership of FAAN to make sure that we are able to deliver what you call a seamless airport experience.In what ways has this lack of good infrastructure at our airports affected your operations' Could you please specify areas that you feel your business has been hampered as a result of this'To be fair, if we start from the Murtala Muhammed International Airport , we know that this airport is so many years old. It was built in the 1970s and the capacity for which it was planned has been exceeded several times, that in itself places pressure on the infrastructure that is available. We are also aware that the minister has put in place plans to build, expand, not only in Lagos, even Abuja airport and I know for certainty, they have even closed one terminal. It is going to be a bit of inconvenience for a while, but I want us to be a bit patient because a problem of over 35 years cannot be solved in three months. It does affect us and there is no gain saying for the reason I mentioned. Single volumes have increased and you are still delivering the same service on the same infrastructure. But I want to believe that by the end of second quarter of this year, when we see this improvement take place, we will have a much better airport experience. Let me say this also, the industry, which we operate is not as if we can make a phone call and buy certain equipment on the spot. If we are patient, we give time for these things to come in. We will keep up the pressure on us as handlers as well as the providers of the airports infrastructure so that we are ready to give that experience that people greatly desire.The coming of Swissport into aviation ground handling business has been on for quite sometimes now and considering the war chest of the firm, there are indications that NAHCO may be under serious threat from the firm, how prepared are you for this huge competition' Some of your equipment are said to be obsolete. How much have you invested in new equipment'When the company became privatised in 2005 and officially in 2007, a new board came in and middle of 2010, we set up a transformation agenda. That was to drive particularly equipment, our own people and by extension service. On the heels of the transformation, we also came out with the bond issue last year. Our first bond issue was N5 billion but in tranches. The first tranche was N2 billion and that tranche was for acquisition of equipment in 2011. N2 billion was roughly $14 million to $15 million. Those equipment are coming in first quarter of this year. In 2010, we also spent about $7 million and 2009 about $6 million. So, if you cumulate these figures, we are getting new equipment. You are right, we met equipment that were very old, but this new drive is not only to replace the old ones but add new ones to cope with the competitive pressure. The other thing I want to mention is that part of our bond issuance programme actually states there that we have a budget for expansion. That is also to position ourselves and to consolidate our position. I must emphasize here that competition is good. We are not just interested in maintaining the monopoly but what we are interested in doing is delivering the right service to our customers. We are positioned to deliver service such that people stay with us and like our service. We have the equipment, we have the people. One of the things we did in 2010 was to devote a huge amount to training because at the end of the day we deliver the service to the people such that people have better airport experience. So, if you add up the capital investment, as well as investment in the people and our own strategic focus, we are positioned not only to retain the people that we have, even to win the new customers that are coming in.How far have you been able to leverage on your brand'We do have plans to leverage on the brand but I want to sound a note of warning here. With due respect, it's your field; we are not a fast food consumer goods company. A billboard will not help somebody sitting in Frankfurt that operates Lufthansa to take a decision to use me as a ground handler. What we have focused on is professional adverts. We are in the ground handling conference in Barcelona, our presence was felt there. We were at the conference in Amsterdam, our presence was felt there. Local events that will lead to our industry, we are always there. Of course, we can always do more, particularly when you talk about corporate social responsibility. Maybe we are of the humble opinion that we don't have to make so much noise of some of the things that we do. We even collaborate with FAAN with regards to providing transport to do patrol round the airport. We sponsor yearly golf tournament in Kaduna, we also support NGOs.
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