Nigerian Aviation Handling Company (NAHCO) Plc. restructured its operations recently, transforming into a group and Mrs. Olatokunbo Fagbemi, became the first Group Managing Director, set to steer the company’s ship to explore new horizons. In this interview with Nigerianflightdeck’s ANTHONY OMOH, Fagbemi spoke on issues bordering around effective company management, impact of the border closure and plans to acquire new equipment and much more. Excerpts:
YOU were appointed the Group Managing Director of the Nigerian Aviation Handling Company (NAHCO) Plc last December, what is your overview of NAHCO since you came onboard?
As you know, I was appointed as the first Group Managing Director of the Nigerian Aviation Handling Company (NAHCO) Plc on December 20, 2018. What we have done in the last 10 months, is to see how best we can improve our clients’ experience and everything we have done is in line with that. I have spoken about our transformation journey, which is based on five pillars: operational excellence, people and transformation, digital transformation, organic and inorganic growth and diversification. We have taken all these pillars and we are pushing them, not just through NAHCO as a company, but also through our subsidiaries like the NAHCO free trade zone, Mainland Cargo Option and others.
In the last 10 months, we have seen Mainland Cargo Option expanding into the sea and some inland trade services and NAHCO free trade zone has repositioned and we are opening the new direction in December.
NAHCO itself, which is the Public Limited Company, we have placed a lot of money on buying equipment, we are have also worked on our infrastructure and facilities. If you come to our complex, you will find out that within the cargo area, we are working on the facilities and increasing the ambience like looking into basic things like toilets and others. We have also looked at our processes. One of our key areas of focus is export. One of the things that I as a person didn’t recognise was the importance of NAHCO in the agriculture value chain, but this is something that we have taken up passionately and we are pushing it.
To enhance that, we need to look at the processes within our export warehouse and we have also arranged our facilities to be able to enhance safety and security, ensure that the foreign carriers are happy that all the regulations are being met. The consequence of that is that we have passed all our audits and that is an encouragement for agricultural export.
We are also partnering with different stakeholders and State governments to push agricultural export. We have done some things with the Kano State Government and others all in a bid to move the sector forward. We want to improve the agricultural sector, we want to ensure that people get it right, do the right packaging and branding. The more people get it right, the more people come in and the more our facilities are used.
We are also going on culture transformation process with all our people who are the most important resource that we have. I am proud to say that within NAHCO, we have a lot of people who are extremely dedicated and focused on their job. We have commendations from all our clients on the behaviour of our staff. I am very proud of the NAHCO team and we are doing more to ensure that we can get better from them because we know that without them, this journey cannot be fulfilled.
We have a five-year growth plan, which started this year and ends in 2023. We just started the first year and this year, we have done more of investments and putting things in place. Next year, we believe that we will be able to show some more growths. We will also consolidate and by year three, we should be able to show the growth. But, what we believe is that yearly and monthly, we should be able to show that we are on the right path. Also, we intend to reduce some of our costs by being more efficient in what we do.
We have our challenging moments; right now, we are trying to increase the cost of our cargo because we have invested a lot and we are working with the agents to ensure that we arrive at something beneficiary to all mostly for the shippers and the concessionaires who are the people that we provide that service to.
So, we have a direct agreement with the airlines, while the airlines have agreements with the consignees and shippers. It is important that we are able to fulfill whatever that is in the contract of the airlines that we have. Also, things are done in line with operational standards.
What is your relationship with stakeholders?
We are having good and robust relationship with all our stakeholders. As you know, the Federal Airports Authority of Nigeria (FAAN) is our landlord and we hope that the relationship will continue to improve. We also have good relationship with the Nigerian Civil Aviation Authority (NCAA) and the Nigeria Customs Service (NCS) and others. We understand that you can’t do without building these relationships and improve on it.
NAHCO in the past nine months has posted profit after tax of over N900m, which is about N200m higher than that of the same period last year, what new things were introduced to achieve this feat?
What we have done basically, is to invest more on equipment and when you invest in more equipment, you have better efficiency. The new equipment are easier to turnaround and increase your activities. Our processes have also improved. In fact, right now, every single Standard Operating Procedure (SOP) is being looked in. our transformation is being driven by the KPMG. One of the things that we do with them is that every single manual is being looked at to see how best we can use the resources. One of the things that we have done is to assure our staff that it is not about laying off of workers at NAHCO, but about improved efficiency. One you talk about efficiency, some people attribute it to layoff, but because we are pushy, we have been able to use our people better. Once you can bring efficiency into services and processes, you have to see it in cost; otherwise, you have done nothing to improve the system.
One of the things we ensure we do is our maintenance culture. We try as much as possible to adhere to the manufacturers’ guidelines. It is a collation of all that and we have changed the orientation of our marketing activities. We now focus more on customers. I think that is what is yielding the result.
How has the closure of border increased the revenue of NAHCO especially in the cargo area?
If you are typically using the land borders for movement of your goods, you won’t consider air as an alternative. You will rather go to the sea and later air, but again, it depends on how fast you want to move your cargo. However, if it is something that is not so fast, then, the tendency is that you will go by sea, but if it is something that is close by, the tendency is that you will want to go by air. The dynamics is from the customers; the people that use the land borders, what takes them to the land borders, but we are not saying we don’t have impacts on our revenue. We will do the statistics, but I know that most of the people, the alternative is by sea.
What effort is NAHCO making to ensure that contrabands don’t pass through its warehouses?
The fact is that I don’t work in customs, but if a good is intercepted, that is the duty of customs. We only provide the facility for handling. So, when you come in to the export zone for instance, the customs will look at it. We also have what is called the explosive detection machine, which detects explosives and then, we report such to the necessary authorities. We have also got commendation letters from the Nigeria Police for some of the things that our machines have been able to pick up.
But, it is the agent’s job to ensure that contrabands are not exported or imported. If they are caught, it shows that the customs and the National Drug Law Enforcement Agency (NDLEA) are actually doing their jobs. Ours is to provide facilities for exports and imports. The customs are the ones recognized by law to determine whether something is contraband or not. It is not our role and we cannot take up something that we do not have responsibility for, we do not have the training, the knowledge and legally, we can’t do anything on such. What we have is a customs bonded warehouse and customs and every necessary agency is there doing their work.
Just last year, some staff of ground handling companies and other personnel, were fingered in the planting of drugs in passenger’s luggage, what is NAHCO doing to ensure that right personnel are employed at all times?
What I know we did after that incident is that the two ground handling companies had a meeting with the airlines and the ministry. Since the incident that happened in Kano Airport, a lot of things at that place have changed. Recently, Aviation Security (AVSEC) personnel of FAAN intercepted something that would have happened at the same airport.
Everyone agency at the airport is not doing its job more professionally and I think that is the benefit of that unfortunate incident. Out of this, something good has come. But, what we have done on our part is to ensure that our staff must follow the SOP and we are very hard on staff who violates any of the standards. Ground handling is a very precise sub-sector. If you want flexibility, then, you don’t go into the job. We have standard quality and performance in all the airports and they ensure that all is met. When there are shortcomings, we record some of our observations. In a nutshell, all parties have agreed to follow SOP that has to do with passenger facilitation.
We have had several airside incidents that were attributed to ground handling, what is NAHCO doing to ensure that its staff especially those working at the airside are properly trained?
One of the things we do is that we have what is called pep talk every morning, which focuses on safety. There are other trainings that are done weekly, monthly and yearly and everybody does his training regularly. If you were not trained on particular equipment, you are not allowed to go on that equipment. All these things are enforced and our standard unit officials are on ground to ensure that absolute safety control is in place.
We also have audit, where we do self-audit. For instance, we can visit British Airways to know there challenge with us and how that can be tackled. The airlines also audit us and we are very strict when anybody breaches any of the procedures. We don’t joke with them because if you breach a small procedure and nothing is done, you will do something bigger. The whole team works together because everyone remembers that if something happens, it will affect the whole company and it will affect their bonus.
Being the first Group Managing Director of NAHCO, how can you rate the performance of the group so far?
It is a challenge that we are taking on. If you are taking on something new, it takes a while. By the end of this year when you see our figures, you will be able to rate us well. For example, we have taken our logistics subsidiary and change the way the accounting is. There is intrinsic growth, but then, you may not see it now.
One thing I can tell you is that it has been beneficial because the subsidiaries are beneficiaries to the group, even though, we work separately. The banks for instance, have group of companies, but in the areas of synergy, strategy and policy, which will ensure you have better growth, you work together.
What is your company doing about the alleged high charges on your business by FAAN?
If you look at the charges, they are gazetted and they are recognized by law. Once it is gazetted, you have to obey the law. We have taken the charges as part of our costs, we won’t want them to be increased or use punitively against us.
The law says 5 per cent of our income is due to FAAN, we will do everything to ensure that we meet that as at when do. The expectation also for service recovery charges and others that we pay, that we get that kind of service from FAAN. What I will say is that we have found a more responsive FAAN, but we can do more.
For instance, in the past two months, we have been having issues with power supply and we have been getting regular updates on what they are doing. We are abreast of what they are doing. We are being told what is happening. Even, the baggage area, there are meetings every month where FAAN is telling us what they are doing on it. I think because of the responsiveness that we have, we are able to manage the issue better, but we will want things to happen faster. However, if the charges can be reduced, we will be happy, though, we know they are gazetted charges.
How far as NAHCO gone with its cargo export facility especially with the acquisition of equipment?
We have a whole export processing area. It took time for FAAN to give us approval, so, we going to build it into 2020 budget. We just got the approval about two months ago. By the time we finish with the expert processing centre, we will provide more facilities.
We are also looking at some forms of partnerships with companies that can come in and discuss with the people that are in that industry.
The first phase of your business growth plan ended in July 2019, how much were spent on the group support equipment in the first phase of the exercise?
We spent about N2bn in equipment acquisition in the first phase of our plan. In cargo, we have high loader, bulk loaders, bowsers, Auxiliary Power Unit (APU), Tugs, Aircraft Tractor (GPU) and others. Within the warehouse, we have got forklift also.
The phase two of the programme has started and we are expecting more equipment to start arriving in the next couple of weeks. Basically, most of our equipment is to support aircraft handling and boost our operations. Those are the equipment we have brought and those are the areas we have supported.
Right pricing is a major challenge among ground handlers in the Nigeria aviation industry, what are you doing about this?
We have formed an association in the sub-sector known as Ground Handling Association of Nigeria, which is something that will be discussed by the people that are at the helms of that. In terms of pricing, I think it is not just the ground handling alone, we have been talking with NCAA because we need their protection also.
I think when the foreign exchange changed, some of the airlines were paying in dollars, but when the foreign exchange went haywire, that was not factored in and it caused a major challenge. But, it is something that we believe that we will resolve. We have discussed with some of the major airlines on the need to do that.
But, between us and the Skyway Aviation Handling Company (SAHCO) Plc, I believe we have a better relationship and better understanding of issues. But, at NAHCO, we compete on service, rather than in pricing.
With all you have laid out, what percentage of the market share is controlled by NAHCO?
What I can tell you is that you should look at our figures, which are published and in the public domain. The answer is in the public. Anyone can claim any figure, but since we are in the public view, it is easy for you to know.
The standard in the industry is for competitors to form partnership in order to improve their services, what are you doing in this aspect?
That is the standard all over the world. In fact, in some countries, you don’t even have any equipment as a ground handler. You just come together and when you need it, you just take it. It is not out of the world. It is the standard ground handling practice. If you need an equipment, you go to another ground handler to get it and vice-versa.