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Nigerian Aviation Can Compete with the Best of this World

Built from the ashes of the dead Nigeria Airways, hitherto the national carrier, Skyway Aviation Handling Company PLC (SAHCO), an aviation handling company, is occupying an enviable position in the business. Now in its about 10 years as a privatized entity, having been bought over by Sifax Group, under the privatisation programme of the federal government, the company’s story and that of its investors, is not of regret, but fulfillment. SAHCO’s Managing Director/Chief Executive, Mr. Basil Agboarumi, in this interview with Kunle Aderinokun and Bamidele Famoofo, speaks about the prospects and challenges in the aviation handling industry, particularly, the effect of Nigeria’s economic slowdown, just as he provides insights on the company’s operations, its recent introduction to the capital market and aspiration. Excerpts:
How has Nigeria’s economic slowdown affected SAHCO’s operations?
Let me start by explaining what we do as an aviation handling company. You know that the aviation sector is the backbone of any economy. What we do is to the other players in the economy. Without aviation nothing much will happen in the economy. Like l tell people, l say everybody needs aviation. Whether you are a banker or even in the maritime industry, everybody needs aviation to get things done. Aviation is the propeller of the economy. Without aviation there is no economy. So, when you look at it, you will realise that there is a connection with the economy. Policies are formulated sometimes that affect the operations of the sector. You would remember that in 2016, the economy entered into recession and a year after, we were told that we are out of recession. But during that time, aviation was badly affected. Some people who used to travel by air decided not to travel by air any longer while some who engage in import and export of goods also held on especially during that period of time when foreign exchange was not stable. People who are in business would want to know what foreign exchange would be the next day before they take decision.
Due to the economic challenge in that period, l can tell you that a major airline, who wanted to come into the country to do business pulled out. Some others also pulled out and that affected travelling. All that was a loss to the aviation industry at the time.
Last year also government tried to come up with a national carrier, which some of us in this part of the world believe we should have, but it did not come out as a success. There were projections, which we had that did not materialize as a result of the setback caused by the recession. But generally looking at things from 2015 to 2018, one can conclude that 2018 was better than the previous three years because things were more stable in 2018.
How did your company find its way around the challenges ?
At a point, l have understood that to do business successfully in Nigeria, you need a very large heart. Our kind of businesses, especially when it comes to providing ground handling services for airlines, is a tough one in this part of the world. Last year, l can tell you that we decided to do certain things in term of expanding our businesses and that has to do with bringing in new equipments to enhance our operations. Before now, we have been importing equipments but last year we decided to import more modern equipments which cost us a fortune. Let me put it this way that what we would spent to bring in three equipments in the past was not even enough to import one this time around. Yet, we must bring in this equipment to be able to continue to render quality services to our clients.
It was tough, but we just have to squeeze ourselves to get it done. As l talk to you now, some of the equipment started coming in from December last year. We are commissioning few of them very soon. Yet some are still being cleared as l talk to you now. It was a tough business decision, but as painful as it was, we needed to do it to continue to be relevant in this kind of business of ours. I can tell you that it has not been easy doing business in this particular sector of the economy. I tell people that when you talk about the aviation sector or the airline business, the success begins from the ground because if there is failure on ground, we cannot be talking of success in the air. And because airline is timely we needed to do everything to make sure that we render quality services to avoid delay on ground which may affect every other aspect of the flight. So many things could cause delay. It may be the inability to provide quality equipment that will help deliver quality service at the ground level or being unable to provide the expertise that is required. That is why we have continued to equip ourselves to ensure we continue to render quality services to our clients.
Given the picture you have painted about Nigeria’s aviation sector, would you say SAHCO is competitive?
You see there is nothing like Nigeria aviation. And l can tell you that we compete with the best anywhere in the world. The only thing is that what we have to go through to compete is where the issues lie. I tell you, we are rated as one of the best anywhere in the world. We go through the same certifications. For instance the handling companies have what we call the ISAGO certification. We are also audited by external auditors which IATA has to send from other parts of the world. We had auditors come in here. In fact, there was a case in question recently when an auditor, who works for one of our major clients; he is in charge of Middle East and Africa. He came in here for audit, but sometimes l needed to find out their independent feedback about our operations.
So l asked him and he asked me if l wanted to hear the honest truth about our report. I told him he has done his job, but we must talk outside the books. He said in Africa and Middle- East, he has not seen a ground handling company like SAHCO. He told us that there is only one ground handling company in Middle East that he tried to match our services with. But he said we still stand out from that ground handling company because the people at the top in SAHCO are more easily accessible to customers than what is obtainable in the Middle East and particularly the ground handling company in question. Yes, what we do is that apart from the fact that we are professionals and we try to offer professional services, we still attach a face to the services we render to our clients. We don’t joke with relationship here. He observed it and he spoke about it to us. So when we talk in terms of matching our services with others, we go out and we see what is obtainable elsewhere and so when we import equipment, we go for the best. I know the kind of regards the manufacturers of these equipment have for us, because they can see in us the courage to go for best. Even some, who are based where the equipment is manufactured does not have the courage to go for the best, and yet we do.
What changes have happened since the Sifax Group took over the operations in SAHCO Plc a few years back?
First, having been here for quite a time and also knowing what has happened in the country those periods, l would say SAHCO is blessed to have had someone like Dr. Taiwo Afolabi, who through Sifax Group bought into SAHCOL (now SAHCO Plc). To me, l see it as a blessing. On many occasions l have said God just loves this company because you need to understand where we are coming from. SAHCOL used to be an offshoot of Nigeria Airways. Of course Nigeria Airways is now history. Now you have a company that came out of that ashes and was dying, because at a point, government felt it could no longer run with the burden. So, they did something about it.
The process of privatisation was what they took. We had so many companies that bid. After the first stage, both the preferred bidder and the one that was next were unable to pay. And suddenly government through the BPE came up with what they called the willing buyer, willing seller option .I was in that room that day when all of them were to submit their envelopes, and Sifax Group submitted N5.25billion and they were able to pay within the stipulated time, and they took over. At the time they came in, SAHCOL was a company nobody wanted to do business with.
As at that time, it does not have what it takes to provide the services that airlines needed. Meanwhile you could not fault the ingenuity of the staff as we had very passionate people, who are committed to their work even without government providing what was required to work. Then the Sifax group came in and it was like a miracle that happened in the company. The first thing Sifax did was to make massive investment in the company. All my years of working in this industry, l have not seen that kind of massive deployment of investment. The volume of brand new equipment pushed into this company within the first three years was massive. And that was like the game changer in the company.
As at that time too, we were not an ISAGO-certified organisation. We put in for that and got certified. Massive training was also taking place at the same time in the company. As an individual, for instance, the training l got in the space of two years after Sifax came in was massive. They brought in trainers from abroad to provide training for everybody. There was a software we did not have that made us not to be competitive, we got that also. So, for the first time; airlines started coming to do business with us.
Before the coming of Sifax, we did not have a corporate headquarters where we operated from as we operated from porta cabin. But we now have this place today. As at that time, we did not have a warehouse, where any airline will want to have its cargo .But now, we have a very modest warehouse that l must let you know is among the best is Africa and the best in West Africa.
These were the blessings that Sifax Group brought to us. Since that time, it has been from one glory to the other as we have more and more airlines leaving the competitors to do business with us. Apart from the aforementioned, another good thing that happened with privatisation of SAHCOL was Sifax retaining staff of the company. Usually people are afraid of job losses, but in this case more jobs were created. As at time of privatisation, we had about 900 staff, but as at today we have about 1,500. Since Sifax took over, we don’t have the reason to owe salaries as staff are now paid as and when due, even during the recession. Since that time when Sifax took over, salary has also grown.
Beyond the benefits the Sifax Group has brought to SAHCO staff, will you say Sifax has taken a wise investment decision acquiring this company?
Well, when you talk about Sifax, I like referring to Dr. Taiwo Afolabi as he is the only face of Sifax that is visible. If you look at all his companies, you will see that they are truly indigenous. If a company like this were to be in other hands, you would have seen many foreign faces and expatriates, but that is not the story. So, he is one man that believes in investing in Nigeria. And of course you would have asked, what happened to companies that have been privatised before? You know that people just buy the companies and they strip their assets. Dr. Afolabi is well spoken about everywhere. He is a man with a good heart. He said this is his own way of giving back to Nigeria. l can tell you that after many years of investing in this place, rather than take money from the company, he would rather re-invest the profit. He is not like most Nigerians you are in a hurry to make the money. His intention was to build and that is what has taken us to where we are today.
So back to your question, his decision was a very wise one, rather than say it was a wise investment. He had other options to put his money elsewhere and that is why l said his decision was a blessing to this company.
SAHCO recently approached the capital market . What prompted the company?
I knew we would get to this. It’s good we are talking about it now. I will explain. In 2009 when SAHCOL was being privatised, there was an agreement and that was part of the agreement. In 2009 100 per cent of SAHCOL was handed over to Sifax with the agreement that after a period of time, a certain percentage of the shares of the company would be sold to the Nigerian public. Also, a percentage will go to the staff. Meanwhile, before now, we have been under the watchful eyes of BPE. Every year, they come in to see how we are doing .The final one was in 2017 when current director general of BPE visited this place and he could not believe what he saw and he said it was time for us to let go and we agreed to give out the shares meant for the Nigerian public, though we could have argued that the stock market was not ready for such capital raise at the time given the lull in activities in the market then. But being an organisation that does business with a high level of integrity, we just had to let go.
Then the process of taking it up started and that was how the IPO went through. What we agreed was to take out 49 per cent for the Nigerian public and the staff of SAHCO. The staff is entitled to 10 per cent while the public have the rest.
Now, the decision to go public via IPO will change so many things about your company. How prepared are you for this change?
Even before the IPO, we were prepared. We have taken ourselves to the public even before we were asked to do so. We have already organised a retreat for the directors and staff because we know that there are things we need to imbibe before we go public. We have been prepared for the next level even before the IPO came on board. We have already seen ourselves as a public quoted company so that from the board, management and staff aspects, there will not be any problem.
Are you saying investing in the shares of SAHCO will be beneficial to the shareholders?
It is the best decision anybody could take in this dispensation. There are equipment we are about to launch and there are some that are still under production. I was just told that some of them will be ready before the end of this quarter. So, when the airlines know that you have what it takes to give them the kind of services they need, then they are comfortable with you. Like l said, the clients also know that we are not just their handlers, we are a partner with them to achieve success.
Having achieved this much, where do you see this company in the next 10 years?
Like l said, everybody in business wants to grow. No matter the growth level you have achieved, you must continue to grow. That is why someone, who is the richest in the world still would continue to do things that would make him richer. One thing we try to do as an aviation handling company is to provide safety and that we will continue to ensure. We will consolidate on safety. We are promising safe ground handling service. We know what to do. We will also continue to align ourselves with international best practices to serve our clients better. Since aviation is timely, we will keep giving our clients quick ground handling services.
The SAHCO of 10 years to come is that company that will give you an excellent ground handling services which the customers will always come back to enjoy. Those are the three things we are promising: safe, speedy and excellent ground handling services.
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