Getting foreign exchange to run our business is difficult – Mbanuzuo

Obi Mbanuzo is the Accountable Manager for Dana Air. His wealth of experience has helped to add value to the airline. In this interview with Nigeriantravelsmart, the consummate administrator spoke on various issues plaguing the aviation and how Nigeria is not tapping from the enormous aviation potentials

Dana Air has shown over the years that it meant business and despite the challenges of the past, the airline seems to have broken a new ground. Could you tell us what the airline has been doing lately?
We are Nigerian airline and we want to be everywhere. Our new route is Owerri. We are expanding gradually as we focus on our operations. You will recall that we first operated to Owerri in 2014 but ceased because we had to take one of our aircraft out for maintenance. The airplane is back so we had to re-open the Owerri route. We look at the domestic market, where there is demand. We have customer feedback all the time. Every seat has a customer feedback form. We read every feedback, good or bad and we reply. What also count for us is the fact that we change our menu every two weeks and keep them fresh. Our service on board is the best in the country. We collate all these, sit back and access our areas of service and where is profitably reliable. Owerri is one point we felt it is a big enough market. Some people in Rivers state, Bayelsa, part of Enugu and Anambra state use Owerri as their point of travel. Dana Air is in Owerri to stay. We are doing well on that route and we lift over 110 passengers on board and we just started three weeks ago and we are quite happy with the performance of that route and it will only grow from strength to strength.

Airlines are in serious dire straits, what is the way out for them, especially now that the economy is in recession?
Getting foreign exchange to run our business is very difficult. We require it to do business and it has become very difficult to come by. Times are hard. It is not easy at all. We are trying our best. Airlines business is capital intensive, everything in aviation is dollarized. We import everything we use, from the spares parts to Jet fuel, which is not refined locally. Even in the good times, all these were imported but the cushion effect in the past is that at least the local currency, which we traded, was a bit stable but of recent, the naira has collapsed so what we pay for both spare parts and maintenance has gone up the roof and this affects what customers pay as well. Aviation has the potential to contribute at least four of five percent to our Gross Domestic Product, (GDP) in Nigeria, which is the biggest economy in Africa. If maintenance was done in Nigeria, we will not have wasted money abroad but now we have to spend almost a million dollars on each air plane. The money is coming from the naira that we are trading. So, it is very difficult for us. We are a private business, once the policies are correct, we will make heads way. So, we need government support in the sense of making the right policies. Recently, Ghana reduced the price of aviation fuel by 20 percent but the government here says it is deregulated but the currency is dropping every day. We should be looking at the Nigerian economy.

How has this policy flip flop affected your operations and how have you been able to remain in business?
We want to see a Dana Airline that will be here for another 50 years just like Aero that has existed over 50 years now. Airlines do not owe because they want to owe. Sometimes it is because some of those charges are duplicate charges. Why do we do reconciliation? This is because they do not know what we owe. We are only surviving in spite of the economic challenges. Aero is the oldest commercial airline and they are finding it difficult today because of some of the unfriendly policies we have. Dana Air has wide range of skilled staff and in terms of customer satisfaction, we are always on the top and we make sure we get very skilled people and we give them enough training. A lot of parastatals because airlines are resources place you go and grab. They do not look at the background to this.

You talked about policy of government not making it possible for carriers to thrive, could you please throw more light on this?
Aviation fuel takes over 40 per cent of airlines’ revenue. There is a need to refine jet fuel locally. Currently, a lot of the supplies are imported. There are import problems, which is causing scarcity. If we can refine locally, there will be excess supply to satisfy demand. Secondly, government should make that zero percent on import work so that when something lands from Abuja, Kano or the Sea Port, the airline should have their parts in less than five hours. The policies on maintenance should be such that we could get our parts and equipment in and out into the country. There should be nothing that stops Dana Air from taking a land in Lagos and building a hangar. But because the policies do not work, it is not viable.

Airlines and aviation agencies have been at loggerhead over charges. Why do we have crisis when it is the turn of airlines to pay up what they owe?
. From an airlines’ point of view, I believe that five percent should be completely done away with because we pay the regulators for everything that we do. We pay for aircraft registration, pilot licenses, approvals of manuals and approvals of simulators, amongst others. There is a contentious issue of five percent on tickets sales. The Nigerian Civil Aviation Authority (NCAA) says it is from the five percent on ticket sales it finances itself. I am a supporter of the independence of the regulators and advance economy supports that regulators should be independent from government so that they do their job properly. They have to fund themselves somehow. Any service that the airlines needs from regulators, they pay for it. If we want to get a pilot’s license approved, we pay for it and that is how it is done in other countries, you pay for certain services. Apart from these charges, five percent on ticket sales deducted. The five percent does not exist anywhere else. The five percent is hard work of the airline. If I do my customers service properly, marketing and do my staff training, amongst others and I charge my passengers, it is my hard work, not the regulators. The five percent on ticket sales is shared among Nigerian Airspace management agency (NAMA), but NAMA also charges every airline separately from the percentage taken from the ticket sales on navigational aids per kilometre. They have a second charge called the terminal navigation charge, for using the radars. So why impose double taxes? what is the need for the double taxation? In foreign countries, aircraft manufacturers can manufacture aircraft with a particular maximum take-off weight. You could purchase the same airplane with maximum take-off weight of 100,000kg but another airline and purchase the same airplane with maximum take-off weight of 120,000kg but he will carry a bit more weight. Take-off and landing are charged by weight. Dana has five airplanes with different take off weights but the Federal Airports Authority of Nigeria, (FAAN) has charged us all the airplanes at the maximum. We are in dispute with them for overcharging because they go to website and start charging but FAAN has agreed to it. So, there is a lot of that double taxation. If I pay taxes and I see where my taxes are used, I will be happy to pay taxes but if I do not see where they are being used, then we have a problem with that. The day we can see where our money goes, nobody will complain of anyone owing. The airlines are prepared to pay once it is transparent and we will pay once everything is clear.

What is the update on the compensations of families affected by the plane crash?
We insure the aircraft itself, the staff, the pilots and cabin crew. Every passenger that buys a ticket on the airplane is also insured. Every year as the law requires, Dana Air buys enough insurance to cover our liabilities, such as the passengers, the luggage, passenger injury or life. In respect to the accident, the insurance is handled by the insurance company. What we do till now is we liaise with the insurance company; ensure that every question from the families of those affected are answered. The insurance companies have lawyers that work for it. Dana air is saying documentations have to be done. Immediately an accident happens by law, without questions, everybody gets paid a certain amount. Currently, it is $30,000. That was done for all the families, everybody got paid that first part by the insurance company. Going further, families then had to fill in certain documentations, who is the actual next of kin? All the families that did the necessary things, such as doing the necessary registrations, getting all the probates, they were paid. Those doing legal proceedings, the insurance company had to stop any further action until the legal proceedings were completed. For everyone who completed their processes, who have no legal impediments, they have been paid.

What are your projections for the rest of the year?
We survive and work in our environment and whatever shocks the economy will face, we will always have plans. The current and biggest shock in the economy is the naira devaluation because this affects us the most. We are closely watching what happens with the new FX policy and we are making plans on how we are making plans on how we can survive going forward. Our hope is that going forward, things will get better. We had a very tough July because of the fuel scarcity but one thing that stood for us is that while airlines were cancelling flights, Dana Air operated 95percent of its scheduled flights. Those with delays, we made sure we got messages out to customers and customers understood. There were very little disruptions or bad will from customers. We kept passengers informed and made sure people were fed and watered when they needed to be. Part of Dana Air’s standard operating procedure is that after a one hour delay, everybody gets delay parks, after two hours, if people are tired and do not want to fly again, they get their monies, 100percent. Going forward, this August is looking bright and we thank our customers for always understanding. We hope that going forward, things will get better.

What routes does Dana Air ply presently? Are there new areas you want to commence flight?
Our foot print in Nigeria covers Lagos, Port Harcourt, Uyo, Owerri and Abuja and in three years or less, a few places in the Northern part of the country will be covered. We had plans to go into the North Eastern part of the country but we had to stop because of insecurity but with better security, we will cover two or three locations in the northern part of the country and we will move further.

Categories Interviews