Mbanuzuo: Dana Air Has Survived Because We’ve Been Prudent

Obi Mbanuzuo

The Accountable Manager at Dana Air, Obi Mbanuzuo, in this interview calls for improved regulation in the aviation industry by the Nigerian Civil Aviation Authority. Mbanuzuo is also optimistic that Dana Air, which recently marked its 10th year anniversary will continue to meet the expectations of its customers. Chinedu Eze presents the excerpts:

What has the experience been for you operating in Nigeria for 10 years?
The entire Dana Air family is elated. I personally was not in Dana 10 years ago when they started but I am sure when they started they expected to be here 10 years later but with the antecedents and plans in the industry, it was very serious on-going plan but after 10 years now, after going through everything that this airline has being through, the entire Dana family is elated. There is a feeling that since we have survived these 10 years, we will survive the next 10 years.

What has kept you on, especially operating in a system many described as very harsh environment?
The people that described the environment as harsh are not wrong. Those who are outside the industry may look at it and say what is harsh. We have actually been here for 10 years and it is not because of but in spite of the challenges. We go through day to day operational challenges; we go through the structural challenges, fuel availability, price, the policies, day to day challenges of poor landing aids simply because there is no power, not because the landing aids are not there. However, in some places the landing aids are not there; in some places the power is epileptic. There are agencies’ challenges, with some doing better than others. There are lots of deficiencies in different places. When you say the environment is harsh, imagine a place where you can’t land after 6:00 pm or where maybe a state government has tried to help the system or the environment by providing equipment and then sometimes the people who are supposed to look after them vandalise them. Airports are not places where anyone on the street can get access to, so telling me that someone outside the airport environment has stolen the landing aids is not possible. The people who work there have done that. Somebody has done that so that he gets gratification. There are also inter-agency squabbles, where for example the Federal Airports Authority of Nigeria, (FAAN) says the lightening should be our business and another agency says, ‘no it should be ours.’ We are all affected by these, so when we say the environment is harsh, it is truly harsh and 10 years is not easy but we went through it. All we do every time is we highlight these things, we say what it is. Sometimes some agencies come and harass us and say why we say them but we have to because things will not get better without us highlighting these things.

On the Passenger Service Charge, (PSC) FAAN has given some justifications on the proposed increment. What is your take on it?
If I want to do something, whether good or bad, I will find a justification to back up my point of view. From a user’s point of view, those justifications don’t hold water. If FAAN is properly constituted; the Nigerian Civil Aviation Act says they should have a board and they should issue reports yearly, the International Air Transport Association, (IATA) which is the industry body has a principle which we fully support. The principle says that service providers have to charge under the system known as cost recovery. So, we are in support of FAAN recovering any cost for their business but what we are asking FAAN and all the other agencies is to show us what the costs are. Show us financial reports you have issued in the last five years. I stand to be corrected; FAAN has not issued any financial report in the last five years. What are your revenues, what are your expenses? If these clearly show a shortfall, the airlines will pay to make up that shortfall. FAAN is supposed to charge just like the Nigeria civil Aviation Authority (NCAA) to cover their costs. Show us what your costs are and if that requires us to pay more PSC, we will do so but without doing that, whatever justification they give, doesn’t hold water.

On passenger complaints, there seems to be a gap in communication between the airlines and passengers. Why is this so?
I once boarded a flight in London, British airline. They started the engines and one of the engines started but they couldn’t start the second one. The captain told the passengers that he could not start his second engine so there was a problem. He said the engineers will come on-board and they will look at it and fix it, after which the journey will continue. The engineers came on-board and did all they needed to do. This took about one hour and no one complained. They fixed it and everyone stayed on-board and the aircraft took off. Nigerians, for many reasons are superstitious, religious or simply afraid of something they don’t understand and I will not blame them. This is why we always try to educate people. So, if what happened in London had happened in Nigeria, I bet you that half of the passengers will have left the plane. Flying is the safest form of travelling based on the number of people travelling and the number of incidents that occur. We are still trying to encourage and educate people, which is also why we talk to the media a lot. Sometimes, certain media live on sensationalism. If they don’t sensationalise something, then it is not news. This also sends a message to the public who read the publications and say they won’t go near the airplane. When the people who have the fear of flying read that article, it will even increase their fears. Sometimes the airlines try to give them as much information as possible.

I am also not a fan of ‘operational reasons’ (which airlines often give for flight delays and other issues) as a way of explaining things by airlines because operational reasons could mean various things. For instance, currently in Nigeria, there are a lot of VIP movements that delay flights. By law, the airlines cannot tell passengers that there is a VIP movement delaying their flight. We will be sanctioned if we do this because it is a security issue. Sometimes, we then have to say operational reasons. It could also be a technical problem. In essence, you are making the journey safer for the passengers but once you mention that technical problem, all kinds of discussions will go on.

For example, why is a flight carrying passengers without all their luggage? Very rarely can an airplane carry the maximum amount of payload they can lift together with the maximum amount of fuel. The airplane has a maximum take-off weight which it can reach with both maximum passenger load and fuel load. If it reaches maximum passenger load, it cannot carry maximum load (luggage). So, in that case, some bags will have to be left behind or you then have to reduce fuel. Sometimes, there is no fuel in the destination airport; so, you then have to take maximum fuel, which means you have to leave something behind. It is either you leave the human beings themselves or you leave some of their bags. In Dana Air, we always prefer to tell the passengers that they may have to go without their loads. It might be difficult to convince the passengers but things happen. Things will happen, flights will get delayed but the question is how do you deal with that problem?

Not long ago, we had a problem in Owerri where the aircraft had a technical problem. We didn’t just have to tell the passengers it was a technical problem. We took all the passengers to a hotel. We paid their transport from the airport to the hotel and we took them back the next morning, because the engineers worked all night to fix the airplane and first thing the next morning, all passengers travelled. I am sure they will have loved to be in Lagos that night but we needed to take that decision for safety reasons. The aircraft was fixed by 7:00 pm but because there is no runway lights, our captain said for safety reasons, they will not go. The plane could have taken off, but there were several ‘what ifs.’ So, the airline will always try to give the passengers as much information as possible without alarming them. In five to 10 years’ time, we will probably come to the point where we tell the passengers that we have an engine that is not starting and they need to give us an hour to fix it, after which we will take off and everyone will be happy.

Since 2015 the new administration came up and made it compulsory that aviation agencies that generate revenues must pay money into federal government coffers. Those monies are not brought back to develop the industry and there are so much infrastructure deficiencies. Is it that they are not sensitive to these issues?
Those are some of the policy things I spoke about. By law, the 2006 Nigerian Aviation Act set up all the agencies such as the Nigerian Airspace Management Agency (NAMA), NCAA and FAAN. These are independent agencies and they should finance themselves. But the government comes in, probably trying to reduce corruption or increase their revenue intake, sets up Single Treasury Account (TSA) system, where everyone pays into one account. The money goes in and doesn’t come back. With the PSC, they are trying to pay for the Chinese terminals; the decision to take up these Chinese terminals should have been taken by FAAN if it were a properly run airport company. FAAN should be able to finance itself from its own revenues. If it needs huge capital inflow, it can go to the bank to finance it or go to the Chinese but this is FAAN’s decision as FAAN and not someone in the ministry calling the Chinese and getting FAAN to pay back.

FAAN never decided to go to the Chinese; someone sat down and made that decision. The agencies should be able have financial autonomy, so that we the users and airlines know what we are paying for. The decision is distorted as agencies pay into somewhere, not sure of what they are paying. In the past, we heard of bullet proof BMW cars being purchased and as elections approach, people will be told to produce certain billions. We are the ones suffering. As far as I know, NCAA does not have a board currently constituted and I’m not sure if FAAN or NAMA does. As far as I know, the airlines have to sit on some of those boards but there are no boards. We could also sit down and demand what we really want but because it is done in such a way that the airlines don’t contribute or see what is happening, then all of these go on.

How do you evaluate the regulation of the industry by NCAA?
What is happening currently is that the regulator regulates only the airlines. The regulator should regulate the industry; they should regulate NAMA and check to see if NAMA does its air traffic control well. The autonomy we have currently is that those regulators sit down on the same board, they eat eba and soup together and come down to the airlines and knock off our heads. They don’t knock each other the way they should. If the NCAA properly regulates FAAN and NAMA, these two will do much better than they do. This also relates to financial autonomy. FAAN gets enough revenue to run its business, although there are 22 airports, of which only three are viable. However, if FAAN, with all the revenues they get, still say they want to increase PSC, then what about the one they currently collect? If they say they want to pay the Chinese, is it FAAN that called the Chinese? The loans are there, it is just following the right thing. The regulator should simply regulate the system, the airlines, pilots, engineers and Air Operator Certificate (AOC) amongst others.

What is the situation with Value Added Tax (VAT) removal on importation of aircraft spare parts? Is it now effective?
The situation is much better now but again it requires proper executive approval. What I mean is that tomorrow someone else should not come and change it. There is still no proper gazette. The current administration has given instructions that this is what should happen but in the books, nothing has changed. The way it is now is if the Minister is changed or the administration changes, things will change. This is not the way things should be. Things should be documented and put properly the way they ought to be. When the Comptroller General of Immigration was changed, things changed. Even at this level, a new Comptroller General of Customs came, things got more difficult. It took some time for things to get ironed out. This is not the way things should be. So, things are better now with importation of spare parts. We need things to be put down in paper to back us up so that if something changes, we have certainty of what is going to happen.

How best can you educate people that new aircraft is not a guarantee for air safety as some reports allege?
The reliability, serviceability and air worthiness of aircraft is basically a function of the maintenance input to the aircraft. The age of an aircraft is not a factor for air safety. We all know that recently, a three months old aircraft crashed. To be honest, there was very little the pilot could do because unfortunately, they weren’t even aware of the system that was fighting against them. There is a new system that the manufacturer put in the aircraft called MCAS that they weren’t aware of. However, new aircraft have certain advantages. Whenever a manufacturer produces a new aircraft, he produces it because they want certain advantages and the most critical one is fuel consumption because this is one of the huge and biggest inputs airlines make into flying an airplane. There are more reliable systems and parts on that airplane. You see that for the first 10 years of that airplane, you find out it doesn’t need huge heavy checks such as the D-check, which cost about three to four million dollars. That is why some airlines have a business plan of buying a new aircraft and after 10 years, they get rid of it, when they get to that period where they need huge amount of inputs. For instance, Dana Air is in the market looking for funding for airplanes. If it was in the United States, Europe and some parts of Asia as well, I will probably get someone who will fund a brand new airplane for me for over 20 years’ period with at most two to three percent interest rate.

So, it makes sense, to get a new airplane and after 10 years, get rid of it and get another airplane. In Nigeria, interest rate is 21 percent and no one wants to go more than 10 years. In fact, for 10 years, they are already screaming. So, you find out that it is difficult for an airline to keep up with payments on that interest rate for 10 years. Dana Air has survived because we have always tried to be very prudent and we take our time. Nothing stops me from going to buy a new airplane tomorrow. They are people currently ready to finance us at those huge interest rates but we may not be around in five years’ time if we pay those rates. When you get a good airplane that has had all its troubles worked out; for instance, the MD83 is well known and the engineers know every bit of it and we make sure the maintenance is done as at when due.

For us, they are very reliable airplanes. Yes, they take more fuel, I agree. As you are aware, we flew some Boeing B737 for a short while from Asky, we had all the inputs, we bought the fuel, and we paid for the maintenance. So, we had something to compare. That airplane burns half the fuel our MD83 burns. The MD83 is an aircraft we know, the parts are available and cheaper, although it might cause us a bit more in heavy maintenance. When we send one for C-check, it cost us almost $1 million and takes between one to two months to get back. On the other hand, a new airplane will only need maybe 20 days’ ground time. It will be a bit cheaper because it hasn’t got to a point where we do corrosion prevention works in the aircraft. But because it is well known, it is actually a very reliable aircraft for us. American Airlines still fly almost 200 of the same airplanes, at the same time purchasing new aircraft.

Their MDs are fully paid and they are no longer paying anyone for it. Same thing with ours, as they are fully owned by the airline; our aircraft costs are minimal. As I always tell people, look at the maintenance that the airline is doing, that’s all. Maintenance is the most important thing, not the age of the aircraft. Once you look after an airplane the way it should be looked at, then there is nothing that stops that airplane from operating. British Airways Boeing B747 that comes to Nigeria today, we happily get on-board every day; most of them were purchased in the late 1980s. They will possibly continue to operate this because of passenger demands.

How have you sustained your in-flight service and how do you intend to even improve on this?
When we stated we said that our USP (unique selling point) will not be the aircraft or the hard product. Some airlines emphasize the hard product. We said our USP will not be the hard product; we will make the soft product the USP. The way I relate to the passengers, my service in-flight, my on-time performance amongst others are really what has been our focus. We are currently looking at re-fleeting the aircraft. We know that every new airline that comes in here always looks at what we are doing and copy us. We have catering suppliers for example, who tell us new airlines want our kind of services offered to them. We take it as an honour that people could deem it fit to copy what we are doing. We will continue doing it.

Most of the accidents are caused by human error. Why is this so?
No aviation accident is caused by one particular reason. There is always a chain of events that lead to an accident. We call it the Swiss cheese model. You know Swiss cheese has holes in it and when all the holes line up, at a point, the activity could be stopped. So something can stop the accident from happening. No accident happens because of one thing alone. Yes, something started something but at each point, something could have been stopped it, which is why all airlines run something called a Safety Management System (SMS), which is a system that highlights the hazards and how you can mitigate the risks. So, you try to reduce the risk. Flying is a risky business but you always make sure you reduce the risk to the lowest acceptable level. This was why in 2017; we have aviation without any fatalities. Unfortunately, this year, we have had some very bad ones but what we always try to do is to reduce the level of risks. Very rarely does any airline say they are the safest. But generally, safety is a given. Everything you do should be geared towards safety. You must always have that acceptable level of risk. I have this airplane and I should know what could go wrong and how to mitigate it to ensure that doesn’t go wrong.

How do you feel marking 10 years in the industry?
We feel good. We know some other airlines did not get up to five; some didn’t even get up to three; so it is a huge achievement that we have recorded operating in Nigeria. We are about the third airline to clock 10 years. I must say that the system is harsh for scheduled airline operation so we should be congratulated for being able to brave the storm and remain in operation.

For us to have sustained our operation for the past 10 years, we must be doing something differently. And one thing I will say is that we have followed our own plan. There will be people who would want to push you one way or the other but we have maintained our own plan. We believe in doing things gradually, one by one and that is why we have been able to last this long.

We have faced the pressure to re-fleet but we did not succumb to such pressure. In 2016 we were very close to financing aircraft but the economic situation in the country then. So what we do basically is to follow our own plan and not other people’s plan.