Last week Medview Airline started flights on the West coast routes, from Accra via Monrovia to Freetown. During its inaugural flight, the airline’s CEO, AlhajiMuneer Bankole spoke on the need for the federal government to support domestic airlines because they project the image of the country. Chinedu Eze presents the excerpts:
What is the cost implication of this route development?
The advantage of flying this route is that the entire countries after Nigeria do not talk in Naira currency they talk in what we call dollar denomination. When you fly to Liberia, for instance, you find out that they use dollar, which exchanges to their local currency 10 to one, where my country is now N490 to $1 and when you come to Liberia and other destinations in the West Coast, the fares and the cost of operation is based in dollars, so it makes it easy.
You can see the flow of passengers from our departure from Lagos. We bought fuel at N250 per litre in Lagos, fuel is still about 58, 70 cents in Freetown, Sierra Leone and that is the game. So you can see us taking fuel from Freetown and taking you with it to Lagos. So what we have done here during the costing is to look at the turn around location, so Freetown is turn around location, when we top up the fuel, we took fuel in Nigeria all the way to Freetown then we top up the fuel to take it back home without any difficulty, so it depends on those who know the business.
Medview seems to be weathering the challenges of operating in Nigerian environment?
One thing in the industry is that you need to have a strategic plan. One, you need to develop routes. The market in Nigeria today being our base, we need to satisfy our people back home. But when you look outwards, we operate Lagos to London, which you experienced. Now, we are doing four flights to London. We want to say here with emphasis that God has been on our side. From the beginning of December last year till today, December 23, 2016, we have been airlifting about 475, 480 passengers. You cannot even imagine where the human beings are coming from. That is the acceptability, I believe. People buy tickets in UK pounds and we are able to pay the service provider in UK and that keeps us going.
So we sit down and we plan, we ask ourselves what is the next agenda because the aircraft are meant to fly. You don’t fly less than six hours, or six landings a day, so this rotation we are doing (the West Coast operation) is just five landing, when this aircraft arrive Lagos it is going to do late flight to Abuja, so that mean the aircraft goes back to bed and in the morning it runs the same game. So that is what the aircraft is meant for, maximum utilisation. You can see the man flying (the captain), his duty time is 12 hours, he starts at 8 O’clock and ends at 6:00 pm. So you do your plan, you put everything into it and they are all happy.
What motivated you to go into West Coast?
In West African nations we are preaching what we call integration; that we are West African people, that we should form a unit of our own. We have about 15 Heads of State and we are united. We want to encourage and improve on trade because it will pay us more doing so. We shall gain more doing business among ourselves than travelling overseas. So because there is increasing interaction in terms of trading, diplomacy there is increase in movement and the people need airlines to airlift them. Presently because of the dire need for airlines, some operators from East Africa come here to provide that need, but it is easier and cheaper for us to provide that service for the people. The operators sell ticket at $2000 for a destination of two hours. Airlines even come from Morocco, North Africa, where are the airlines from West Africa? And we are closer to the people, our people.
There is huge market in West Africa, but the challenge is that Nigerian airlines have not been consistent in these routes. What is the guarantee that Medview won’t stop operations after few years?
That is the example of what we have seen on the domestic routes in Nigeria. We started schedule flight operations in 2012, we have been consistent and you can see that on the ground. That is what you have seen in London, we went there, we did it together and God has been on our side. That is what we did in Saudi Arabia. We run it for 10 years and we are still there. So if we open a route we maintain it, so this route has come to stay because we don’t just open a route we consolidate when we do. You can see passengers on our maiden flight, it took us six months to sit down and plan and that is why we are able to attract passengers on this route and we worked on that. We went through examination. We went through logistics, business development, timing and planning before we posted our staff to the destinations. And one thing about Medview is that we invest more on our manpower and that is why you see them smiling, happy to cut the inaugural cake, collecting Medview uniform in Freetown, so if they are not happy they won’t do what they are doing. They have integrated and they are happy. That is the good work of God.
We have seen airlines come and go in Nigeria. It is as if 10 years is like a benchmark for the airline’s span, what do you think that we as a people and as a government should do to make sure that our airlines exist for a longer time?
The first thing is what the current government should do. Government needs to support its own. It should create the enabling environment to make the airlines survive. Airline is the only product that you have in your country in terms of building your economy that will market you and boost your image outside your shores. You can see me now talking to the Minister of the country, talking to the Prime Minister of Guinea Bissau. I meet every one of them, if not for the airline who will I be able to talk to? So Nigerian government should think twice and see what they can do. Because this is the only window they have to improve their image. They have assured us they will solve the problem of aviation fuel scarcity. We hope they will do something this time.
Of what impact has the crisis in the aviation industry in Nigeria been to your foreign operations?
Let me tell you a secret, before you run a project you must do a cost analysis and you ask yourself, will it be profitable for me to embark on this project? London is six hours flight from Lagos. Medview owns this aircraft; you don’t buy an aircraft out rightly. That is where some of my colleagues make mistakes. It is more profitable to go on lease purchase. You conserve your capital to be able to progress probably in 24 months, save money for other things that will be done at the same time. You own this property, how do we own it? We have mastered our cash flow; we consolidate our naira so that the bank can see something to work with us. So bank gave us loan so that we acquire this aeroplane you are flying now. By acquiring the airplane that way it has reduced our overhead, we are not looking for dollar to pay to anybody. So the cost of this aircraft as it is going now has been calculated and the people flying it are paying for it, as it generates revenues it pays for itself. I am just like a passenger; they pay me the way you pay for flight. You put a cost on this aeroplane, put a cost on the fuel in the plane, and know ho many litres you burn up on this route and we knew very well how much it costs us.
You are able to get the number passengers on your fare because some airlines are charging these people $2000 between here and Ghana. We started with $589; some have dropped to $600 now. So you can see the number for the first flight. When I get to Accra there will be too many passengers that you will not see an empty seat. We have a partnership with European carriers, they trust us, they believe in our integrity and our pedigree over the years. So we have been able to tell them, now in Europe is winter period, they have challenges so they do not operate all their aircraft, so all we do every year is that we lease airplane from our partners to support our operation because Nigerians travel a lot. We have opened Owerri, Enugu, Port Harcourt direct, four times, five times, if you go now you will see Owerri operating right from today (December 20, 2016.) So we have opened a lot of routes, now we have opened Freetown, Monrovia and Accra, so you can understand where we are heading to and by the Grace of God we shall soon start operation to Dubai.
What about the insurance issues the airlines are facing?
The issue of insurance is dollar denominated, Nigerian insurance companies have no capacity to carry the risk. The entire Nigerian insurance companies including brokers, cannot carry more than 15 per cent of the risks and the rest is willed out to insurance companies in European and other countries. So what happened here is that whatever you pay on insurance is equally in dollar, so what the insurance people are doing is a two-way thing. Some of our colleagues had disappointed in paying their premium as at when due in the past, so Lloyd’s is contemplating changes. If they change their action it will give rise to crisis in the industry. You don’t wait until something happens, you need to pay your premium, it is a commitment.
Everything you are doing is a commitment, why I am here today is to go through the inaugural flight by myself. This is my way of life. I fly like this. I go through the experience so that nobody will tell me a story tomorrow. I was here, I knew the people in Monrovia, I saw the people, I know your problem, and I discussed your problem, you can see my manager going around and everything is fine.
So what we have done today is to sign up all these stations. We want you to pray for our country. Nigeria maybe hard today but let us keep praying that something good will come very soon.
You just rewarded your partners and some of your staff for their dedication to duty. From all indications it is only Medview that is celebrating this year. What is the magic?
If you look at the beginning of this administration (federal government), it has been challenging to the level that four of our colleagues in the industry went through a very trying period. Government should put aviation in the front line. For aviation to market government, government must support it because we are the image carriers. Government should do what is necessary to sustain the operations of existing airlines and encourage new ones to join the service. Government should make forex easy to access for the airlines because everything we are doing, including aircraft leasing either by wet lease or dry lease is done in dollars. And when you move a step further you talk of spare parts, maintenance, payment of fuel.
I don’t know why we are blessed with oil and we are still going out to import it and we end up paying the marketer N250, N270 per litre of aviation fuel. This is unexpected. And this goes into the cost of the tickets we are selling. In the past we sell tickets at N10, 000, N15, 000 but it has gone up to N40, 000, N50, 000 and N65, 000. Who bears the brunt? It is the customer. We believe the customers should understand our challenges. We look at all the challenges and we said, rather than going to buy the bags of rice we should do a get together and give praise to God for sparing us this year (2016). Once you succeed in 2016, I pray for this government that the rest of the years should be better. Those in government have to work hard. I believe Nigerians are praying for them, they need to work very hard.
What do you want government to do on the issue of forex in 2017?
The Central Bank of Nigeria (CBN) came out with a design which they call future, forward, spot; what it means is that you put your money for the next two months, three months, four months and you will be given allocation. In doing that you commit all your operational cash so everything has to cease until that two months; that is what it means. But we are hoping that things will improve. So when you look at the business of aviation it is all in dollars and I believe we are now looking at government to tell them what to do. Somebody right there needs to advise them to see aviation as a priority. You can see what Medview is doing in the UK; see what we are doing in Saudi Arabia. Now, we venture into West Africa, you can see the yearnings of the people of those African countries. They are not seeing Medview they are seeing Nigerian airline; that is the pride of the nation.
It has been said that Nigerian airlines operate at a loss; when are you going to turn the table?
The fare has been increased; you put everything on your cost. What is happening now is that we are buying aviation fuel at N260 per litre. We used to buy fuel at N106, so definitely the fares have to double or triple. Check the fare of every airline, Lagos-Yola what it used to be, N20, 000 plus, it can be N65, 000 now. People have to fly and the government needs to help, that is why you can see the challenges, people need to move and it is when people move that the economy is working.
If people are not moving everything will be stagnant, so that is why we are shouting. If the people of west Africa can come here and our own people can go there, then there will be inter-country trade, there will be integration, people bringing money from left, right, center and we move around. But you can see what is happening it is dry, completely dry, so all we need is prayer.