By Okuneye Moyosola
Mrs. Tokunbo Fagbemi is the Group Managing Director and Chief Executive Officer of the Nigerian Aviation Handling Company (NAHCO Aviance). During a media parley with the League of Airports and Aviation Correspondent (LAAC) at the Gateway forum, she addressed several pertinent issues in the aviation industry even as she highlights the challenges and prospects of the company under her leadership. Enjoy it:
It is almost a year since you were appointed the Group Managing Director of NAHCO Aviance. How would you describe the experience and what are your goals for the organization?
The journey so far has been focused on meeting and exceeding customers’ expectations. We recently created a unit which is called the Customer Experience Unit. We created that unit to ensure that we could serve customers better. I started on the 20th of December and what we have done in the last 10 months has been to see how best we can improve the customer experience.
Our transformational journey is based on five pillars which are; operational excellence, people and transformation, digital transformation, organic and inorganic growth as well as diversification. We have taken all those pillars and we are pushing them not just through NAHCO the company, but also through our subsidiaries (NAHCO Free Trade Zone and Mainland Cargo Options).
In the last 10 months, we have had Mainland Cargo Options expand into the sea and some inland freight services. NAHCO Free Trade Zone has repositioned and hopefully in December, we will discuss about the new direction itself.
In NAHCO PLC, we have paid a lot of focus on equipment. We have also worked on our infrastructure and facilities. If you come to the cargo area you will find out that we are working on the facilities in the ambiance, basic things like the toilets and we have also look at our processes. One of our key areas of focus is export. I did not really recognize the importance of NAHCO in the agric value chain. We have taken up this passionately and we are pushing. To enhance that focus, we have had to look at processes within our export warehouses and re arranged our facilities to be able to enhance safety and security to ensure that foreign carriers are happy that all the regulations are met. The consequence of this is that we passed all our audits and there is more encouragement for Agric export.
We are also partnering with different stakeholders and different state governments on how best to push Agric exports. We have done some things with IATE and Kano State government all because we want to partner. The source must also know that if you don’t harvest in a particular way or package products in a particular way, even if we handle them properly, they could be destroyed and that has been happening a lot. In one of the meetings that I had with the airlines, they told me about incidents of maggots found in fishes which meant they had to disinfect the entire aircraft. When such products get to Europe or America, it becomes an infestation. We are passionate about that and we are looking for partners and that is why we are talking to state governments and IATE to ensure that people begin to understand how best we can improve the value of the agric export. If more people get it right, more people will be in that business and hopefully, more of them will pass through our warehouses. That is one major journey that we have been able to embark on.
We are also going on a culture transformation process with all categories of stakeholders in this business because they are the most important resource we have. I am proud to say that within NAHCO, we have a lot of people that are extremely dedicated, focused on their jobs and know what to do. We also have commendations from Emirates, Air France and most airlines have commended particular individuals. I am also very proud of the NAHCO team and we are doing more to ensure that we can get better. Without them, this journey cannot be fulfilled. We also have a five year plan which started this year and will end in 2023. This year has been more of investments and putting things in place. Next year, we believe that we will be able to show some more growth. It’s not that we don’t have any growth this year. We will also consolidate and then in the third year, we should be able to show that growth.
We have also been able to reduce our operating cost by being more efficient in what we do, although we have also had challenging moments too. Right now, we are trying to increase our price of cargo handling because we have invested a lot. We are working with the agencies to make sure we have something that is mutually beneficial. Mostly, this is for the shippers and the concessionaires who are the people that we provide that service to. We have a direct agreement with the airlines and the airlines have agreements with the consignees and shippers. It is important that we are able to fulfill whatever is in the contract that we have with the airlines. We are also ensuring that things are done in line with operational standards and with the support of stakeholders like Customs, we are making progress.
We are also experiencing a better relationship with our stakeholders and we hope that the relationship will continue to improve. We can’t do it without building these relationships and ensure that we have their support. It’s all been a story of working together with the tools that we have, the processes and the people to optimize NAHCO’s resources and get better revenue.
NAHCO in the last 9 months has posted a profit after tax of over N900million which is about over 200 million higher than that of last year. Tell us about the innovations that were introduced to achieve this feat?
We have invested more in equipment and as you invest in equipment, you have better efficiency. The newer equipment has less work done and are easier to turn around the aircraft. Our processes have also helped because we have gone back to look at all our processes. Right now, every single Standard Operation Procedure (SOP) and manual has been looked through. We also have the transformation plan that is been driven in KPMG. We are working with KPMG on our transformation plan and one of the things we are also doing is to assure all our staff that it’s not about us coming to sack people; it’s about been more efficient. When looking at how things can become more efficient, people tend to think that it is a layoff. It’s not and we have already explained it. Our members of staff are also beginning to understand that what we are aiming at is to ensure more effectiveness and have better processes. Once you bring in efficiency into processes, you would see it saving cost.
There is also an investment in our cargo complex and we are working on every part of it. We have also embraced the maintenance culture and changed our orientation as regards our marketing activity which is placing more focus on customer.
In the last two months, Federal Government has closed the land borders and NAHCO as a player in the logistic value chain should benefit from this development as more cargoes are now coming via the airports. What impact is the closure of the land borders to NAHCO’s operations?
If you are typically using land for the movement of your goods, you won’t use air first. You would go to the sea. It also depends on how fast you want to move it. If it is something that doesn’t need to get there fast, there is tendency that you would go by sea. However, if it is close by, then there is tendency that it would go by air. You have to go back to the customer. Why would I as a customer use the land border? Maybe it was cheaper for me. I know of some people who take their goods to Cotonou by sea and bring it by air. So if I don’t take it to Cotonou by sea, I’ll definitely take it to Apapa by sea, it won’t be by air. The dynamics is from the customer. What took them to the land borders? We are not saying that it didn’t have impact but I know that for most of the people, the alternative is by sea.
Several airside incidents have occurred involving aircrafts and ground handling companies. What is NAHCO doing about this?
We have what we call pep talks. Every morning, there are talks on safety. We see this as one of the ways to train our people. There are trainings done daily, weekly, monthly and yearly. If you are not trained on a particular equipment, you are not allowed use that equipment. These rules are enforced and our Standards Unit is always on ground doing the operations. Their job is just to ensure that the quality control is in place. We also do self-audit. The airlines also audit us.
We are very strict if anybody breaches even the simplest of the procedures. If you breach a small procedure and nothing is done then you will do something bigger. The whole team works together because everybody has realized that if something happens, the company is going to pay. When the company pays, it takes out of whatever we are going to earn as performance bonus. This has also helped because we all want the company to do well so that everyone from top to bottom enjoys.
Been the first GMD of NAHCO which has other subsidiaries, how have you been able to coordinate them?
It is a challenge that we are taking on. Like anything new, it takes a while. Right now, we are in sync. What we do is that we have synergies and we use it across the network.
By the end of this year, when you see our figures, you will see the figure of each subsidiary. There has also been an increase in the performance of the respective subsidiaries this year. We meet regularly and we plan strategies. We synergize our goals and resources.
Just give us till the end of this year and I would be able to tell you exactly what has happened. However, I can say it has been helpful because the subsidiaries are beneficial to the group. They are working separately but what we have done is to ensure that in areas of synergy, strategy and policy. We work together.
You spoke briefly about Agro export and looking at partnerships with different stakeholders. What equipment has been put in place to ensure that the products that are brought are properly stored and how much has been invested?
We have a cold room which is dedicated to export. We have a whole export processing area but it took time for FAAN to give us approval. We were going to build it this year, but it has to go into next year’s budget. We just got the approval two months ago. By the time we finish the Export Processing Centre which is the land just before our headquarters, we will provide more facilities. We are also looking at some form of partnership with companies that can come in to train the operators in that industry.
Earlier this year, you talked so much about planned investments in the procurement of Ground Support Equipment (GSE). The first phase has ended in July. How much has been spent on the acquisition of GSE and in what areas of the operations have they been deployed.
We have spent about N2 billion. They have been deployed in areas like the cargo, high loaders, belt loaders, bouncers, ACU, GPU, ASU. Most of them are in the aircraft handling and cargo. Within the warehouse, we got 4 clips also.
The second phase has started and part of the equipment has come in. We are expecting more all through the next couple of weeks. Basically, most of our equipment is to support aircraft handling and warehouse operations.
There is a challenge in the industry now in terms of relationship between the ground handling companies and this has also affected pricing. What can you say about this?
We have formed an association which is Ground Handling Association of Nigeria. It is something that will be discussed by the people at the helms of that. In terms of pricing, I think it’s not just the ground handling, it’s the environment. We have also been speaking with Nigerian Civil Aviation Authority (NCAA) because we need their protection. Before the changes in foreign exchange, some of the airlines were paying in dollarized form, when the foreign exchange went haywire things changed. We believe that the issue of pricing would be resolved. We have discussed with most of the airlines to let them know that we can’t continue to do that.
Also, I can say that the relationship between NAHCO and SAHCOL is better. We also have better understanding of issues. Hopefully, we won’t see that cut-throat competition as we go on. We will compete on service rather than on price.