How Dana Air stabilised after 2012 crash – Mbanuzuo

Mr. Obi Mbanuzuo, the Accountable Manager and Chief Commercial Officer (CCO) of Dana Airline, spoke on the operation of the airline, the unfortunate crash of June 2012, and the challenges confronting the airline

Could you give an insight into the operation of Dana Air?

Dana Air has been operating since 2008, regulated and approved by the Nigerian Civil Aviation Authority (NCAA). It has been operating domestic flights using our fleet of Boeing aircraft. We celebrated our 7th year of operation in 2015.

Currently, we have six planes in our fleet. I would say 2015 was our year of stability after the turbulent years of 2012 and 2013. 2015 showed the quality that Dana Air has in the market.

We are fully back in the market. The passengers and the public supported us. And based on the service we provided, we have again started picking up the honours we picked up in the past. We won the Best Most Sponsored Airline award, and were in the top 100 brands. So, 2015 was actually a good year.

In December 2015, for the first time, we started operation outside the shores of Nigeria, to Accra, Ghana. The service is daily and is picking up gradually. We expect that by the time we finish the first quarter of 2016, we would have stabilised.

Nigeria, being an oil exporting nation, will find it tough in 2016, and the airlines won’t be immune from what happens in the economy. But we hope to weather the storm.

What other plans do you have for the expansion of routes after the Ghana operation?

In 2016, we expect to reopen one of the domestic stations we have shut down in the past. Regionally, we also expect to extend our operations to some other places in West Africa. At the moment, there are two or three options.

How would you describe the operating environment?

That is why I said 2015 was challenging. The gross domestic product is a driver of what happens to the economy, and what happens in the economy affects the airlines. The economy is like a moving car. People have to travel and have to carry goods and do services. We are service providers. If the economy is not growing, a lot of businesses would shut down.

Two main things affected the airline in 2015. The downturn in oil price had, in a way, a slightly positive effect because that reduced our fuel price. The fuel price is about 35 to 40 per cent of our cost. So, if crude reduces, Jet A1 (aviation fuel) reduces slightly.

The second thing that affected us was the naira devaluation. It affected a clear 40 per cent of our inputs - maintenance, salary for our expatriates, forex for spare parts - all of which are paid for in foreign currencies, while all our revenues are earned in naira. So when naira devaluation happened or started happening from May 2015, it really hurt the airlines. We have been weathering that storm gradually, but it is really persisting.

The issue of Jet A1 has been a recurring complaint from the airlines. How do you think the government can intervene in this regard?

The product is not scarce, but since Jet A1 is not subsidised and we don't produce Jet A1 here, it is all imported. The marketers import and ship it in, incurring in the process, some certain costs. There are demurrage and storage costs, which increase the local price.

The Minister of State for Petroleum has said some of the refineries would soon begin full production, and we would be very happy if our refineries could refine Aviation Turbine Kerosene (ATK), known as Jet A1. So instead of buying at N120 or N130 per litre as it is currently, we could get it at N50 when it is produced here. So that is where the government could come in. There is nothing we could do with the marketers unless our refineries are upstream and we are producing the fuel here. Obviously, when we do, the cost would come down.

Considering the inclement operating environment, how was Dana Air able to stabilise quickly after the unfortunate incident in 2012 when its plane crashed in Lagos, killing many passengers?

After the incident, which is clearly under the purview of the Accident Investigation Bureau (AIB), Dana Air restarted operations. We ensured that our operations were fully within the regulation and fully as specified. Even before we restarted operation, we ensured that we trained everybody, including all the engineers.

The NCAA did a complete recertification of Dana Air, and the airline has also gone through what we call the IOSA (IATA Operation Safety Audit), which we actually did between the end of November and beginning of December 2015.

The first check was in-house, to ensure that our operations are water-tight, exactly as they should be and as the regulations demand, which is why we got our licence, which enabled us to restart operation. Since then, we have kept on delivering safe, quality service. There is the first level service which the customers see, but we make sure as well that the services in the background are second to none. That is how we have managed to get our reputation and passengers back.

What's the extent of loss to the harmattan haze, which forced cancellation of many flights?

The haze is still there. Without giving you a figure, the loss can be quantified in so many ways. To quantify in terms of the GDP of the country, I say, for example, somebody is supposed to go from A to B because there is an event, but because of the weather, Dana or another airline cannot fly, so he doesn't go and that event doesn't happen. So there is a loss suffered by passengers, individuals, states, cities and areas.

Assuming there is an event in Calabar, how are you supposed to be in Calabar? Who will bring money there for the economy of the city? Because of the weather, Calabar has lost. Now, if Dana, as an airline, does not fly, it has lost certain revenue. Our aircraft have been parked on ground, but we have members of staff and have to pay salaries.

The loss is huge to quantify. It is a huge drain on the country as a whole. The country loses money when something like that happens.

When you have the right equipment there will be no problem with the haze. Unfortunately, we don't have the right landing equipment because harmattan haze doesn't mean an aircraft cannot fly. If there is the right equipment, both on board and on the ground, a plane can fly, with the right crew having the right training.

Would you support the call for the concessioning of Nigeria’s airports?

We don't have anything against it, but what may be the apprehension in some quarters is how the concessioning would be done. What are the safeguards that would be put in place to ensure that whoever runs it does it in a proper manner. As a policy, there is nothing wrong with concessioning, but it has to be done properly. A concessionaire shouldn’t be a profiteer; he's there to make the business flow as it should. If you go to many other countries, especially in the West Coast, the airports are mostly privately owned.