Aviation: Why we are building an Aircraft MRO in West Africa-Aero MD
The Chief Executive Officer of Aero Contractors, Captain Ado Sanusi, in this interview says the aircraft maintenance division of the airline has opened an opportunity for Nigerian operators and other countries in West and Central Africa to maintain their aircraft in Nigeria. He said goodwill, talent, among others were what made it possible for Aero to set up a reputable maintenance facility. Chinedu Eze brings the excerpts:
Let’s start with what you have done in your aircraft maintenance division so far?
Aero MRO (maintenance Repair and Overhaul) started out of necessity. Everybody knows that Aero Contractors Company of Nigeria had challenges in the beginning. They were under performing and went into crisis and born out of that crisis, we had to innovate and see whether we can do heavy maintenance for our airplanes, which we started in 2017. Luckily for us we got the approval from the Nigerian Civil Aviation Authority (NCAA) and we got the support from our shareholders, which is AMCON (Asset Management Corporation of Nigeria). And so we did the first C-check on the 737 classics and from that point we were not looking back, it was going forward.
And then we started doing more C-checks, more heavy maintenance and since then we have done 3 C-checks. And the MRO has expanded from the workshop to also getting approvals from other countries. We have also gone further to start providing line maintenance for other companies. We have expanded the workshop scope; we have expanded our capability list, both in the helicopter section and fixed wing. In the helicopter section, we have just coupled Augusta Westland (AW) 139 helicopter; that they brought in pieces from Malaysia; we coupled it up in a record time and the helicopter is flying. Even the manufacturers of the helicopter were very impressed. These are all done with our local talents because Aero Contractors company has been in existence for almost 60 years now.
There are a lot of talents that were not tapped and what we did was from 2017 till date was to identify these talents and do a lot of training, harness the talents and project them towards the development of our formidable MRO. And that was what we did for both the rotary wing and the fixed wing. I am very proud to say that almost 90 percent of our maintenance is conducted by local talents. And we have technical partnerships with a lot of MROs around the world, most especially in South Africa and Ethiopia. But the majority of our engineers are home grown and we have entered into another phase which we are employing young engineers to make sure that we have continuity in the manpower development in the entire industry.
You talked about getting approval from some countries to maintain their aircraft, how many countries are they and what does this mean for you?
For the MRO we have gotten approval with Ghana, as we speak we are currently doing audit with Congo CAA (Civil Aviation Authority) and we have also received documentation from Mali. We are also in talks with Niger Republic for their approval. We are also in talks with Cameroon, which we will soon start getting. Now, what does that give the MRO? The MRO now is a regional MRO, meaning that all those airlines have aircraft that want to maintain or they want to do airworthiness directly, they don’t have to fly all the way to South Africa or to East Africa in Ethiopia; they probably don’t have to even fly to Europe; they can just do two hours or maybe 30 minutes to Lagos and we will do the maintenance.
That will bring in foreign exchange to Nigeria. That will also mean giving employment to our local engineers in the country. So we are creating jobs, we are also bringing in foreign exchange to the country and also we are putting Nigeria on the map to show that, yes, we are a maintenance facility in the region.
The CEO of Medview told us that you have signed an agreement to conduct c-check for one of its aircraft. Are you getting the support of local carriers?
We are very proud of our local airlines. Our local airlines have been very supportive. I do not think in my time, in my experience in aviation that there has been this collaboration with the local airlines and between themselves. The local airlines, especially Medview, Air Peace, Max Air have shown interest in developing our MRO as you have heard from the CEO of Medview. We have the airplane and we have already conducted C-check, we just recently invited the NCAA to come and look at what we are doing.
So, we are doing heavy maintenance for Medview, we have also signed agreement to do heavy maintenance for Max Air; that is C-check too. We have always been doing maintenance for Air Peace, we call them base maintenance. These airlines have shown great support for development of the MRO in Nigeria. And I commend them, I commend their CEOs, I thank them, they have positively impacted on the aviation industry in general and in the region.
What they have done, that singular act of deciding to use Aero MRO is not because Aero MRO will make profit, no. What they have done is to develop the MRO, because now we are talking to their engineers, their engineers can come and do OJT (internship) with us to develop their engineers, give jobs to the local engineers that have just graduated from school.
Recently because of the nature of the job, we have to employ more than 20 engineers to come in to assist with the load of work. Because now the MRO is going to be almost 24 hours a day, so we are going to have continuous shift to make sure that we deliver this aircraft on record time. I am very happy with their decision to use Aero Contractors MRO and I commend them for that because that has gone a long way to break that jinx that Nigerian maintenance cannot be done here; we have to take our aircraft outside the country.
So that trust they have in us, we also will give them the trust by delivering the aircraft better than what they receive from outside the country. Most importantly their engineers will be part and parcel of the checks that we are doing. And also we have a very flexible payment plan. So when they bring their airplane, we discuss because we understand the peculiarities of the environment. So we talk to their bankers and we come up with a very flexible payment plan. Our own aim is to develop the aviation industry in the country; it is time for us to break the jinx that Nigerian airlines don’t last longer than 10 years. We must make sure that airlines do pass that 10 years in the country and we must support the local airlines in any way we can. It is not always about competition.
We must develop the industry so that we can have healthy competition. If the industry is dead then there is no competition, so we have to make sure that the airlines are supported. We will do our own part and we hope the federal government will do their part. For our maintenance facility, we will do our part, as I promised most of the local airlines that I would even go lower than any price they receive overseas to encourage our airlines.
How long does an aircraft stay in a maintenance hangar?
There are so many factors affecting the duration of any C-check. Let’s say the C-check goes perfectly, meaning when we do a non-routine or when we do an inspection on some panels. Let’s say we are doing an NDT (Non Destructive Testing) on a particular spot and there is a crack that means that crack must be rectified. We must go to Boeing, we must get the approval, we must go to NCAA and get approval and then you now do the repair scheme. That in effect can take a longer period of time.
Now, let’s say there is no finding, it is usually between 21 to 28 days, depending the customer providing the rotables. The rotables are spares that we need, so if he buys the spares for us and brings them to us, the act of the C-check itself is between 21 to 28 days.
If the federal government intends to build an MRO, would you advise them to build it on the foundation you have already made?
Well, if the federal government wants to build and MRO it is a welcome development. I think the federal government is now looking at aviation in a different light. I welcome the idea.
The idea I am going to give them is the advice that I have already given, which is, building MRO is not like building a hotel, where you have the building, furnish it, get the hoteliers to come in and your customers will be coming in the following day. Usually, MROs does not operate like that. MROs are built from confidence, from somewhere, from a point. Where is the talent? What is driving me to build the MRO? Is it because I have an airline that I want to maintain my aircraft that is driving me? What drove Aero Contractors into an MRO business?
It was because of necessity; we could not send our airplanes out to maintain them. So we had to develop the MRO, we have to look at the local talents that we have and then build the MRO to support the airline that we have. When we saw that we have supported our airline and very well, and we knew that we can actually sell these expertise to other airlines then we did that. Now, if you say that you want to build an MRO, you must have the thing that is driving you to build that MRO.
So you either say you have an airline that is your customer that is driving you to build that or you must have a reason to say that I have a lot of talents that are very, very good at doing C-check on B737; that the personnel cost is very low. So I can now build an MRO and attract people to work with us.
Most successful MROs in the world were driven by either an airline, which gave vent to many of the MROs in the world—KLM, Lufthansa Technic, British Airways, all the MROs. Now there are other MROs that didn’t have airlines driving them, mostly in America. These ones were driven by talent. I have seen workers who worked in manufacturing plant of an aircraft and they have a lot of local talents around. And they said well, I have local talents, my manpower will be cheap, so let me put up an MRO that I can attract airlines to come. So if the federal government is thinking of doing that; then definitely it is a welcome development.
Now, my opinion on the question whether the federal government should use Aero as a launch pad, it is either you use the talents of Aero contractors because the talents are there or you use the entire company.
But I don’t think that it is good to start up an MRO without looking at the talents. Without making sure that you have the required number of B1 engineers, avionics engineers and identifying what you want to achieve in your workshop? What is the capability base that you want to achieve, the required number of power plant engineers, what do you want to do in your engine shop? What kind of repairs do you want to have or are you willing to invest into a full engine overhaul shop?
These are things I think the federal government will be looking at when they are doing it but if they come to look at Aero, we have it in a small scale because the company has been maintaining its aircraft for the past 60 years. Right from light twin aircraft to twin autos, Bombardier Dash 6 to Dash 8, 300, 400 to private jets, Hawkers, Falcon and the rest. So there is a lot of talents around and infrastructure that has been grown for the past years to support that kind of vision. So I think it will be a good idea to look at what Aero has and build on it.
The first Boeing B737 aircraft you maintained how long has it operated now?
In June 2019 it will be 18 months, so that means it will be due for another maintenance.
To what extent has the ability to maintain your aircraft improved your fleet and also your finances?
It is amazing because when we started we were flying one aircraft and based on the fact that the aircraft was going to be due for C-check, so that means we are going to have zero aircraft and we could not take the airplane out because they were calling close to a million dollars for maintenance. So we could not take it out, we didn’t have the money to take it out. So the only way we could do it is to look inwards and start maintaining the aircraft locally.
And that singular act of looking inwards helped us to have a C-check conducted locally and then we could conduct three more C-checks. Now we have four airplanes flying from one we initially had. So it has boosted that act of doing C-check locally, it has boosted our flight operation to four airplanes, we used to less than eight to 12 flights a day, now we are doing 32 flights a day. So you can see how it has boosted the flight operation and then, of course, our revenue has increased. We were carrying less than 8000 passengers in a month, now we are carrying up 25,000 to 30,000 passengers in a month. So it has actually boosted our revenue and it is key to our turn around.
You have also increased your routes. How many destinations have you added?
When we started we were doing only Lagos-Abuja, Abuja-Sokoto, Sokoto-Abuja, Abuja-Lagos. So, we now gradually increased to Lagos-Port Harcourt and Port Harcourt back to Lagos. We increased to Lagos-Abuja, Abuja-Port Harcourt, Port Harcourt-Abuja. We increased to Lagos-Warri, Warri-Lagos, we increase to Lagos-Asaba, Asaba-Lagos, Lagos-Uyo, Uyo-Lagos, Lagos-Abuja, Abuja-Yola, back to again. We have increased to Warri just recently and then Warri-Abuja, Abuja-Warri and Warri-Lagos.
We are maintaining our Sokoto flights, and; of course, we have introduced Kano, so we do Lagos-Kano and Kano-Lagos. We have all that and we are increasing gradually, we don’t want to grow out of proportion, we want to grow with exactly what we can maintain.
Let’s talk about the rotary, the helicopter wing; has Aero expanded that area of its business?
The other part of Aero Contractors, which is the charter business that provides helicopter services to oil and gas, has also gone far. Both within the maintenance and the operation side, we started with one helicopter in 2017 and now we have five helicopters operating.
We intend to take it all the way to 10 helicopters operation by the end of the year. Very soon we will launch the five helicopters operation in Port Harcourt probably by the end of this month. We are also happy to announce that we assembled a whole AW139 helicopter in record time and the helicopter is also flying and it is the youngest helicopter in the industry now and it is about five years old. We are looking at doing a roadshow for oil and gas to say that Aero Contractors is back to provide safe, reliable logistic support to the oil and gas companies.
We are in talks with some local oil and gas companies and also with some international oil and gas companies to provide support for them logistically. Bear in mind that we are the leading oil and gas logistic company in Nigeria in the 1970s and 1980s and the beginning of the 1990s before the company started underperforming in the 2000s and then entered into crisis. So this turn around project we have done is a transformation where we will pay more attention to this very important aspect of our business strategy, which is the oil and gas. And that is what actually is going to complete our turnaround process.
We are putting more effort on getting back as one of the leaders in the provision of oil and gas support and logistics. We have gone beyond the shores of Nigeria to get that, we are in talks with a company in Ghana to provide helicopter support for their growing oil and gas. We are also in talks with other countries to see whether they will like us to come and provide logistic support. We have the expertise; we have decades and decades of experience in provision of oil and gas. So the business is looking at that aspect and it is going to be a key factor in our turn around process.
Have you started accessing aircraft spare parts through the Free Trade Zone?
On the free trade zone, the federal government and the Ministry of Transportation have helped us a lot to achieve the free trade zone status, which I think has gone far. We are in talks with already licensed holders that have free trade zone permission. We are in talks with the Nigerian Aviation Handling Company Plc (NAHCO). We want to come under their umbrella, so that they will assist us in bringing aircraft parts, tooling under the free trade zone agreement.
In the next few weeks I believe we will make an announcement with an existing company that has the free trade zone license, which we are also under the free trade zone. This is a very good future for us; it will help us a lot with our customers, especially those within the West and Central African region.
You always feel that Nigerian airlines have very limited opportunities because beyond domestic operations, nobody is sure of regional and international routes. What particular help would Nigerian airlines need in order to profitably operate international and West Coast destinations?
West Coast I will say has been profitable; it is just a matter of using the right aircraft. If it is not profitable nobody will be flying West Coast. If not Asky that is connecting all the West Coast, we will not be flying. Definitely you must have a good business plan and then you must study where the traffic is going and how you are going to connect to the traffic and then you must use the right aircraft for the right route so that you can have high yield and you can make profit on the route.
West Coast definitely is a gold mine if you use the right aircraft and the right timing. But there are a lot of things that can be done to improve the West coast travel and to improve the profitability of West Coast. One issue is to unify the charges. If you unify the charges, ASECNA (airspace management agency for French speaking countries in West and Central Africa) coming to NAMA (Nigeria Airspace Management Agency) and other countries that have their individual air navigation service providers should all come together under the auspices of West and Central Africa and you unify the charges. If they unify the charges and agree on it in conjunction with the West African airlines to make sure that it is a win, win situation.
We are not trying to kill the air navigation service providers; neither are we trying to kill the airlines. So we are coming together to make sure that both air navigation service providers and the airlines understand that they are going to work together for the betterment of the aviation industry in the sub region. So they will have to agree on particular unified charges and the unified charges, I think, should be at the minimum on a cost recovery basis. So you don’t want them to be making huge profit at the expense of the airlines dying. Because the air navigation service providers will not have anybody to work on.
If we have a beautiful ASECNA and a wonderful NAMA and other navigation service providers and you don’t have an airline, then what happens? So they have to understand that the air navigation service providers, both NAMA, ASECNA and other countries should understand and come together and do it in such a way that they have a common way of agreeing in on unified charges. You don’t need the government to do that, Euro control and the European airlines have done that.
Why European airlines are not complaining too much on the Euro control charges is because they came together and they have agreed on the charges and they can absorb easily. And I think that should be the main aim or issue that both airlines in west and central Africa and ASECNA and NAMA and other major countries that have service providers should do. Then of course we talk to the airport authorities and see what is obtainable in other countries. And the airport companies should also emulate what is happening in other countries. I mean if you want us to attract more traffic, the airport companies should improve their services and infrastructure.
Are you saying that if FAAN is changed to Airport Company it will make it more effective?
Not only changing the name, changing the name is very simple. Of course, by one act the name would have been changed. But the mindset and the culture of the entire workforce must be changed. So there must be a paradigm shift. There is only one regulator in the industry and the regulator is the Nigerian Civil Aviation Authority. All other players in the industry are service providers or investigators.
So it is either the accident investigation which is investigation everybody, including the NCAA or the regulator that regulates everybody including FAAN; but I think those are the total mindset or the total paradigm shift that we need to have in the industry. And I don’t see it to be something that can be done within two or three months, it is going to be gradual because we have come all the way from civil aviation department to build it all the way to a ministry and then from the ministry it gave birth to parastatals. And now I think after it has given birth to parastatals it is time to make sure that those parastatals understand and do what they are supposed to do and then make the aviation industry grow.