Sanusi: How We Plan to Revamp Aero Contractors
The new Chief Executive Officer of Nigeria’s oldest airline, Aero Contractors, Captain Ado Sanusi says his management has fashioned out a blueprint to turnaround the airline. He spoke to Chinedu Eze. Excerpts:
The Asset Management Corporation of Nigeria (AMCON) in 2011 took over Aero, but from 2011 till now there is no sign of reviving Aero, now they have taken over Arik, people are very pessimistic, what is your take on it?
I will not agree with you 100 per cent that there is no hope for Aero Contractors with AMCON taking over. Of course you knew very well that Aero Contractors was underperforming; had gone through distress, went through crisis and now we are into the crisis management and hopefully we should stabilise and then start the recovery process. This is a normal process a distress company will go through for a turn around. You see it underperforming, going through distress phase then it goes through crisis, then you do a crisis management, then you stabilise it and then you go into recovery phase. Now, if in the crisis management phase you do not get the right personnel to do it, it might delay the recovery process. I do not think you should blame AMCON for delaying the recovery process. AMCON position always is to save the industry to make sure it does not collapse. If the crisis management of that particular company that is in distress takes a bit longer or they make their wrong decisions at a particular point, that is something to discuss about.
But in a process where a company is underperforming, has gone through distress, has gone through crisis phase and now it is in the crisis management, it is either you allow it to go to failure, which means it is liquidated and sold and it rests in peace. Or you manage the crisis, stabilize it and then you start your recovery. So if you are looking at companies, I believe that Aero Contractors is on its way to recovery. Of course the crisis management may have taken longer but the understanding is that for every company there is a unique way to recover from its problems that it encountered.
What are your plans to rejuvenate the airline, working in tandem with AMCON?
First, what you need to look at is that you are already managing a crisis, you have high personnel cost, you have high cost of operation; you have very limited capacity, that is two aircraft in the fixed wing and one aircraft in the rotor wing. So you have to look at the crisis that you are in and see how you can manage it. What we did was first of all study it for the first 21 days when we came in and we decided that definitely personnel cost must be reduced to reflect the number of aircraft that we have both rotor and fixed wing. The next step was to identify the business module of the company, which will bring revenue. So you have oil and gas, you have Maintenance, Repair and Overhaul (MRO) and then you have the mainstream airline. For oil and gas we have only one helicopter. We do not have so much even for the fixed wing, then for the MRO, it was dwindling revenue that it was providing. The mainstream airline only has two aircraft. So what we had to do is to consolidate everything, streamline the workforce in reality with what we have. Aero Contractors is making revenue but we cannot put all the revenue we are making into personnel cost.
We have to make sure that the brand-Aero Contractors that is known for safety must be maintained at all times. So what we did was reduce the personnel cost and look at the revenue we have and plough it back into maintaining that safety standard of Aero Contactors. I am sure you have heard in the media that we have cut almost 60% of our workforce. We did that not because the revenue was not there, no, the revenue was there but to take the whole of that revenue, which is what the workers wanted or some of the workers wanted and plough all that revenue into personnel cost, forgetting the safety aspect and the critical items that we need to work on. So we took that difficult decision to reduce the personnel cost, and we managed to exit about 60 per cent of our workforce considering that there is the maintenance part, which must be well staffed.
And then also going back to the core competence of Aero Contractors, which is oil and gas; we are paying attention to oil and gas to make sure that we serve the oil and gas community. We are also placing emphasis on the mainstream airline business. Now we have two aircraft, from one aircraft when I came and in the next two to three weeks we will have three aircraft. We intend to take the fleet to six. On the helicopter side we have one now, in the next two to three weeks we will have two helicopters flying and we intend to take the fleet to six before the end of the year. So that is the stabilisation mode that we are in, for the recovery, we intend to go into lease agreement with a lot of leasing companies to see how we can recover. Of course my mandate is to make sure that we move the company from where it is to a sellable point where people can invest; investors can come with their money and then recover it. And I believe that it is a very good venture for people to invest in because Aero has an amazing positive brand name.
You know when Arik was taken over by AMCON; there was this allegation that you backstabbed the Chairman of the airline by quickly taking over this Aero job, despite the significant position you held in Arik?
Well, there is nothing to defend. If anybody is very conversant with court rulings, court orders, appointment of receiver manager, and taking over of companies then there is very little to say about it. But if people are not conversant with those processes and procedures then of course there is room for allegation, finger pointing, accusation and all of that. But I think it is a very simple thing; everybody knows that it was by court order that the takeover of Arik was done. They came to the compound with a valid court order. I was not even in the compound at that time, they served it to the company lawyer, the lawyer read it and said it is valid. I came to the compound and I asked the company lawyer and he told me that this is a valid court order. And exactly what I said as the then Deputy Managing Director of Arik Air, was that we have been served with a court order and as responsible corporate citizens, we will abide with the court order.
I also said Arik has the right to challenge this court order or to appeal the court order or to do anything in court because this is the rule of law and everybody is given a fair chance. So that is what I said and that was the role I played. Pertaining to the offer of Aero Contractors job, you see in life I believe there is time for everything, there was a time when I joined Arik and there will be a time when I will leave Arik. There was a time when I was brought into this world; there will be a time when I will leave the world. So there is a time for everything in life and when you realize there is a time for everything and you believe and put all your things in the hands of God then you will not have any problem.
I was offered the job of Aero Contractors way before the takeover process. And I confided in my boss, the MD, I told him, I confided in my Chairman, I told him, I confided with my family, I told them and I also prayed about it because it is a decision I have to make, I was not born in Arik. I left somewhere to come to Arik, so I told everybody, of course it was a decision I had to make and after a long period of trying to make that decision, because the offer was made to me, I can remember, I think towards the beginning of the year but it was made to me, I did not hide it, I told the Chairman, I told my boss, I told everybody. And I took the offer before the takeover, and as I said, God has a destiny for everybody and we pray that we know the destiny and that we are not chasing shadow, that is my prayer for everybody.
The present government talked about three key issues in the industry, which include airport concession, the establish-