allAfrica.com: Nigeria: The Trouble With Nigeria's Aviation Industry
interview
Lagos — The Managing Director, West African Business Unit, Bristow Helicopters, Mr. Akin Oni in this interview explains the issues crippling Nigeria's aviation industry and how the sector can be grown.
What drives Bristow Helicopters business?
Safety is the driver of our business. In the helicopter business, all parts move and there is always an opportunity for everything to go wrong. Hence, safety is something that we cannot play with, it is the driver of the business.
In the last six months we have been trying to reposition our business and focus on delivering superior value to our clients. Most of our customers are in the oil and gas and we have done a research among them to know how they would prefer we serve them. What came out of it is what we are implementing now under our value proposition - 'the client promise.' We are targeting zero accident, zero down time and zero complaints. The three of these mentioned formed part of 'the client promise' philosophy.
How does local content policy affects your business and aviation industry in Nigeria?
In our industry today, the Nigerian Content Act has changed things. We also report quarterly to the Nigerian content monitoring board since our operations are more in the oil and gas sector. The way that we have been addressing this in the past 26 years is getting Nigerians to take over the business.
The oil industry has been predominantly controlled by foreign entities and foreign companies. The only way we can change that is by growing Nigerians, train Nigerians, so we can replace and control the industry.
Bristow Helicopters have been training Nigerians for the past 26 years and we have continued to do that. I have a target of 2015 to substantially change and make sure that at least 90 percent of the people who work in our organisation are Nigerians. It would be Nigerian nationals at the technical, sub technical and at the management level. We would have Nigerian engineers, pilots and support staff.
We currently have six pilots undergoing helicopter training in Florida, the United States. In the next couple of weeks, another six would depart for the United States. They just came out of Zaria. We started an initiative with Zaria and we are committed to it in our Nigerian content drive and in our drive to build capacity in Nigeria.
Unfortunately Zaria still has not commenced helicopter training despite the promises. But we have engaged Zaria to train some of our helicopter cadets on fix wing. We have trained six in Zaria to the private pilot level. The six, including a lady will join the others in the United States for further training.
But the crisis in the north has affected our plan for the year, we had to move some people back to Lagos but they would go back to Zaria in September. In the next couple of weeks, we will commence recruiting some batch of Nigerian nationals to go for pilot and engineering training. We have about 45 students in Zaria, 10 have left but 35 are currently undergoing engineering training.
In the next selection process, we hope to take at least 20 for the engineering training and the same on the flying side. We are also discussing with Ilorin on using the school for flying training. But for now, the easiest way to train is the USA but we also have a responsibility to grow Nigerian companies hence our discussions with Ilorin and partnership with Zaria.
There is a huge manpower gap. In my organisation, even with the huge effort to train Nigerians, we still hire a lot of expatriates. My prayer daily is that the Petroleum Industry Bill (PIB) be passed because it comes with a lot of opportunities.
What is your training budget?
Last year my training budget was $4.7 million. This year it has increase substantially, I can't remember exactly. But each of the pilots we train in the United States cost us $250,000. Six would cost us $1.5 million. The next six is yet another $1.5 million. Some other huge cost goes into retraining pilots already in the system. If we sum that, we are looking at between $6 million to $7 million in training budget in 2012 for pilots alone. We haven't added engineering. That is why I get extremely sensitive and angry when they are poached. Training is a responsibility that our competitors should also imbibe.
There has been concern about import duties on aircraft/spare parts. How does it affect the aviation industry?
If you import an aircraft say for $29 million, approximately $30 million. The import duty for that aircraft is about 14 percent and that is about $4 million on import duties. That is why a lot of Nigerians cannot go into this business. The high import duties is preventing the entrepreneurs from coming into this business. Nigeria is among the few countries imposing import duties on aircraft. Duties were waved during Obasanjo's regime but it has been reintroduced. But it is bad for our economy. Somebody would have to do the right thing and remove the pressure on Nigerian airlines so they can compete with foreign airlines. Huge taxes and duties remain a burden. Covert $4 million into Naira and see how much it would amount. With that amount, I can put two hangers in Lagos and build maintenance facility.
Any plans to change your fleet?
In the past two years, we started fleet renewal and right now we are in the process of removing helicopters that we have used for a long time and replacing them with new generation aircraft.
In the last 3-4 years, we have virtually replaced our medium helicopters (they carry 12 people). The S92 fleet, the oldest would be about 4 years, the 412s are the older ones and we are about replacing them. An S92 cost about $29 million.
Where do you do your maintenance?
We do all our maintenance here in Nigeria. I studied engineering and I can tell that helicopters are far more difficult to maintain than fixed wings. We do right up to D-Checks in Nigeria. In terms of facilities, I can say, we are probably about the best for helicopter operations and light jets. We have the people, equipments and tools. We also have the necessary backings. We have a hangar for S92 in Lagos and we are building one in Port Harcourt. We have the capabilities. If we need to bring people into Nigeria to do certain things for us, we do that but we never take our aircraft out of Nigeria for maintenance.
What are the specific challenges with Nigeria's aviation sector?
We have been in Nigeria for 55 years. The biggest challenge we see in the aviation sector in Nigeria is infrastructure. Close to infrastructure is financing and huge manpower deficit. We have got to fix infrastructure. The state of infrastructure in Nigeria today is unacceptable. There is no reason for it. The next thing is financing. If you fix financing, you can substantially fix the infrastructure issues. But finance is not so much in the helicopter business because it is financed by the oil and gas sector but it is an issue in the fixed wings. I went to Tanzania last year, they don't have an all singing and dancing airport but it works. We are not asking for the latest and the greatest but let the basics be put in place and let them work. We can do it. We are talking about a maintenance hangar for Nigeria, has anyone asked where we would get the engineers from? We are struggling today looking for Nigerian engineers. We don't have engineers.
So who paid the import duties on teh Caverton fleet for Shell?