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Airports should run on independent power — NAHCO boss

By BusinessNews Staff on May 12, 2014

The Managing Director, Nigerian Aviation Handling Company Plc, Mr. Kayode Oluwasegun-Ojo, spoke with UDEME EKWERE on the problem of electricity at the nation’s airports and the challenges of leading a 35-year old airport grounding handling firm

How has the Federal Government’s infrastructure upgrade at the airports affected NAHCO operation?

We operate in all the international airports in Nigeria, and I will speak specifically of the Kano airport. The infrastructure upgrade at the airport in Kano, where we incidentally also have improved our facilities, is part of the reasons why we have the return of international flights to Kano. We handle Turkish Airlines and last year, I am glad that I was part of the team that received the maiden flights.

Kano is the first international airport in Nigeria and we are glad to be able to see activities come back to what they used to be there.

The second area where we have enjoyed this infrastructure upgrade is at the Enugu airport, which also does international flights. We would like government, through the Ministry of Aviation to continue the progress being made in terms of infrastructure upgrade. We would also want the government to look at other areas, such as the conveyor belts, the issue of power and probably consider having an independent power project just for the airports under this new power privatisation dispensation. I think it is something that will significantly help the industry as a whole and of course all the operators.

Recently, there was a faceoff between your company and the Nigeria Customs Service; what is the position now?

It was in September last year when our warehouse and that of SAHCOL were shut down by the customs because of procedural issues around the warehouses. What has happened after that is we have sat down with the customs and other stakeholders including the agents, and signed a Memorandum of Understanding, stating how we would operate; what we would do and wouldn’t do; and I am happy to say that from that time till date, we have been operating using those things that we agreed as a guideline.

One thing that is important is that when you operate a customs bonded warehouse like we do, there must be a level of cooperation between ourselves and the customs. That is something we have enjoyed for over 35 years and we are still enjoying it. We work hand-in-hand with them to make sure that things are done properly and by international standards. We also make sure that neither the customs nor the ground handler loses out to any other stakeholder.

Many companies in the aviation sector have not strictly adhered to the corporate governance standards. What is the situation with NAHCO in this area?

We are up to date in this area. For instance, our ISEGO certification will be four years this year, and I can tell you that we voluntarily decided to invite IATA (International Air Transport Association) to tell them that we would like to be ISEGO-certified; it meant that we had to open up ourselves to a lot of standards; a lot of rigours and when we got it, we decided to retain it. And we will be going for another two years in the next few months. So, we hold ourselves to very high standards that are internationally accepted and this, we have tried to maintain in our 35 years of existence. We cannot compromise on safety of the passengers and we cannot compromise on security. These are things that are internationally accepted; we keep to those standards.

What has kept the company going, 35 years after its establishment?

We have insisted on certain standards, which we have tried to follow as much as possible; high standards of corporate governance, for example. I joined the industry from another industry, but it was a competitive transparent recruitment process. It is very rare for you to recruit an executive director by that kind of methods. But I make bold to say that my appointment as chief executive officer was strictly value-based, and we endeavour to follow through with that. One thing that privatisation does is that since capital is not sentimental and also seeks returns, we, as a company, have always looked out for the best in our given circumstances in Nigeria and I think that is what has been responsible for the level of success we have achieved so far.

As a company quoted on the Nigerian Stock Exchange, what is your relationship with your shareholders?

The first objective of running a quoted company is to preserve value; and the next thing is to build value. On the issue of preserving value, I would say the company has always paid a dividend. We haven’t declared a loss and I think that is something that makes shareholders satisfied. Of course, as human beings, we would always want more, which brings me to the issue of building value. After privatisation, one of the first things we did was to take a look at how a company operates, understand the cash flows and then begin a deliberate investment drive to build value in the balance sheet. And that is what we have done. There is value in the company. The company is 35 years old. So, if we meet a company in its 30s, we should be able to take it into its 40s and leave it for those that are coming behind. I want to believe that the performance of the company in the stock market in terms of dividends, bonuses and the responses of the market is probably an indication that the shareholders are satisfied with us. We are also striving to do more for them. We have not only a large shareholder base with over 70,000 shareholders, we also have institutional shareholders, airlines, and all these people keep up on our toes.

What is the company’s market share?

There are over 30 airlines that come into Nigeria, and we also know the number of airlines that operate domestically. Therefore, it is easy statistics to know the number that we handle. We are still a leader and we control up to 85 per cent of the market.

In terms of innovation, we were the first to offer ourselves for the IATA certification, and subsequently, others have followed. We were also the first to expand, modernise and rebuild our warehouse, and again, others have followed. I believe that’s leadership.

Aside from our corporate governance, which is something we take seriously as a publicly quoted company, we had several of our staff members commended by airlines for acts of integrity. These things have helped us to retain our leadership position, and we have to keep improving. In the next 10 years, we see ourselves retaining our leadership position in Nigeria, and expanding to the West, central and possibly other African locations.

What are the challenges that the business has had to grapple with so far?

We have general challenges which are things that affect businesses in Nigeria as a whole. For instance, operationally, poor infrastructure and epileptic power supply are some of the things we have had to contend with. We cannot say that we are in an Island as those things do affect us too. We are, however, hopeful that with the privatisation of the power sector, things will improve significantly. This is something that has a direct impact on our business. I will also say that as a leader, you are a target of everyone, that is a challenge that we contend with on a day to day basis. But we believe that we have what it takes to remain a leader.

[Punch]

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