For over fifty years, Bristow Group has been involved in the Nigerian aviation and oil & gas industries through its local Nigerian companies Bristow Helicopters Nigeria Limited (“BHNL”) and Pan African Airlines (Nigeria) Limited (“PAAN”). The length of that commitment to Nigeria is something that the Group is immensely proud of, as is the quality, efficiency, heritage and dedication to Nigeria displayed by each of BHNL’s and PAAN’s employees every minute of every day.
As you may be aware, early last year the Federal Government of Nigeria passed the Nigerian Oil & Gas Industry Content Development Act, with the aim of creating more sustainable, stand-alone Nigerian companies and businesses within the Nigerian oil & gas industry. This is an aim that Bristow Group – as a stakeholder in each of BHNL and PAAN – wholeheartedly supports. Our belief in that aim is why we have supported BHNL and PAAN to train over 200 Nigerian pilots since 1986 (with only the Nigerian Air force having trained more pilots than BHNL and PAAN), and is why, on the engineering side, we have sponsored engineering students through the Engineering Training School at NCAT Zaria and put in place a robust Apprenticeship Programme, which started in 1988 and now produces over 10 Nigerian engineers per year into the two businesses.. Bristow Group recognises the importance to the country and people of Nigeria of developing Nigerian content in the Nigerian oil and gas industry, and we will continue to work towards making that happen.
Despite that however, in April 2010 BHNL lost a helicopter services contract that it had held for over fifty years. Any contract loss naturally results in some re-evaluation of market positions and that has been the case in this instance, particularly in light of the Nigerian Content Act. At the same time, the Nigerian Civil Aviation Authority has also been encouraging the operations of BHNL and PAAN to be more clearly and fully separated, as well as for the respective responsibilities for the maintenance capabilities which each of BHNL and PAAN rely heavily upon to be more clearly distinguished.
The increased emphasis on Nigerian Content and the requirement to fully separate BHNL and PAAN both constitute substantial market shifts. Each of BHNL, PAAN and Bristow Group need to recognise and respond appropriately to these market shifts in order to remain a competitive critical part of the Nigerian oil & gas and aviation industries.
I am therefore excited to announce that Bristow Group, BHNL and PAAN have agreed in principle to make a number of important changes to their operating model, in order to properly and fully embrace those market shifts. These changes are as follows:
BHNL and PAAN will now each stand on its own feet as much as possible, utilising its own local resources, its own local people and its own local assets, whilst Bristow Group (as their international technical support partner) will focus on being responsible for those elements where, as the leading global helicopter operator, it can provide the local entity on an arms’ length basis with a competitive/commercial advantage.
To enable that to happen, Bristow Group has set-up a new Nigerian entity – BGI Aviation Technical Services (BATS) – to focus on providing technical aviation maintenance services within Nigeria, through a unique combination of global expertise and market-leading standards in aviation engineering and technical services with the best aviation engineers and maintenance resources in Nigeria.
Each of BHNL and PAAN are in the process of finalising and signing separate new detailed Technical Services Agreements with BATS. Under these agreements, BATS will support the aviation operations of each of BHNL and PAAN (and potentially other Nigerian aviation companies) by providing them with key aviation technical services, where required – such as maintenance, supply chain, the secondment of expatriate employees, and operational standards & know-how. This will allow each of BHNL and PAAN (as well as any other clients) to have autonomy over its own flight operations, whilst still being supported by the leading global helicopter operator. These agreements are expected to come into effect this year.
To re-assure their clients, and to maintain a commercial edge over its competitors, each of BHNL, PAAN and BATS has also committed to continue to apply and use all key Bristow Group standards & policies, including without limitation its Code of Business Integrity (COBI) as well as its innovative Target Zero safety programme and Bristow Group’s world-leading Operations Manuals.
I am also pleased to inform you that, whilst the above changes are being implemented and put in place, BATS, BHNL and PAAN have also agreed on the following steps to enable each of BHNL, PAAN and BATS to operate freely in the market place as completely separate entities, each with their own distinct identity, in accordance with the requirements of the NCAA:
With immediate effect each of BHNL and PAAN will now have its own dedicated Managing Director, focussing solely on that entity’s business activities. The role of dedicated MD for BHNL will continue to be filled by Captain Akin Oni, whilst Alan Grant has now been appointed as dedicated MD of PAAN. BATS will also have its own dedicated Managing Director. As BATS will be focussed on providing first-class aviation engineering and technical services into the Nigerian aviation market, Nick ‘Tufty’ Travers has been appointed to fulfil that role. I have no doubt that each of Akin, Alan and Tufty are ideally qualified to drive each of BHNL, PAAN and BATS forward to success.
PAAN will now present itself openly and actively to the market as an ‘independent’ 100% Nigerian owned company, flying under its own livery. Bristow Group will therefore transfer its shares in PAAN into Nigerian ownership. PAAN will soon launch a new dedicated website to start that process –
www.pan-africanairlines.com.
BHNL will remain ‘Bristow branded’, flying under Bristow colours & with Bristow Group retaining a direct minority shareholding in that local entity. BHNL will also take new steps to bolster and re-state its market position and, again, a dedicated website will be an important part of that –
www.bristownigeria.com.
BATS will also be taking immediate steps to carve out its own position in the market. That position will be centred around its unique combination of global expertise and market-leading standards in aviation engineering and technical services with the best aviation engineers and maintenance resources in Nigeria to provide first-class aviation engineering and technical services into the Nigerian aviation market. BATS will also have its own distinct logo and branding, and will also have its own dedicated website –
www.batsaviation.com.
Of course, you – the employees of each of BHNL and PAAN – will also be involved in this process. In order to meet the increased requirements of the Nigerian Content Act and fully separate BHNL and PAAN as explained above, each of BATS, BHNL and PAAN will need to have its own dedicated workforce. That process is made easier by the fact that most of you are already employed by one of BHNL or PAAN, although some employees who have assisted both BHNL and PAAN in the past will need to focus solely on assisting one entity or the other going forward. Some people’s employment may also move from one entity to the other, where strictly necessary, whilst there may also be changes to the identity of some employees’ managers and some new reporting lines. Continuity, though, will be a key objective throughout the process.
The transition process will commence immediately and will continue until BHNL, PAAN and BATS have all the required regulatory approvals in place.