27 June 2013

Nigeria: Arik Air Stresses Quality Service and Safety, Chairman Says

interview

Lagos — The airline industry in Nigeria has faced many challenges in recent years, including the collapse of several airlines and a crash in Lagos a year ago that claimed 163 lives. As a result, the market "has been reduced to an effective duopoly," the Centre for Aviation reported earlier this year. Other carriers are emerging, but Arik Airlines, which began operations in 2006, is the market leader with service across west Africa and flights between Lagos and both London and New York. Sir Joseph Arumemi Ikhide-Johnson, the company's founder and chairman, described the airline's activities and planned expansion in an interview with Reed Kramer at Arik headquarters. Excerpts:

What is your vision for Arik and how do you differentiate from other airlines in Nigeria and beyond?

We want to operate with the same quality as top airlines in the United States and Europe. We pay special attention to maintenance. We don't cut corners. We operate with new aircraft. We do everything according to international standards. We have a partnership with Lufthansa to handle maintenance, and we're building a maintenance facility that meets international standards.

What is the size and composition of your fleet?

We have 23 aircraft now, including the two wide-bodied Airbus A340-500s for long-range flights. We have 13 units of the 737s - that is our regional aircraft. We have four CRJ-900 from Bombardier, and the two Q-400s from Bombardier as well. We have two Hawker 125-800XP that we use for charter. All these aircraft belong to us. They were financed by the U.S. Export-Import Bank and Export Development Canada.

This month, we are taking two Airbus A330-200s from Pembroke in Ireland.

They are four years old, and we hope to use them for eight years and then swap them for new A-350 Airbus.

We hope the U.S. Ex-Im Bank will approve our application for loan guarantees. We have seven units of 787-9 on order from Boeing and two units of 747-800. And we have eight units of 737-800 Skyline ordered from Boeing as well. Let me take this opportunity to thank Ex-Im because the initial 13 engines - Boeing 737-700 and 800 engines - we bought all of them with backing from Ex-Im. We also thank the U.S. Department of Transportation and the U.S. government more generally for supporting us.

By 2015, we'll finish our payment for these.

You said Arik will retire the current Ex-Im indebtedness by 2015. What about additional borrowing: is Arik Airline able to service its debt?

Yes, we are considering additional borrowing from Ex-Im and other financial institutions to re-fleet. We have some aircraft on order and we will definitely require financing when the aircraft are to be delivered. Arik is able to service its debt. That is why we have finished paying for some aircraft bought in 2006, and that is why we are optimistic that US Ex-Im will support us again, because we are repaying, as, and when due.

What is your reach across Africa today and what plans do you have for panAfrican expansion?

We focus a lot on west Africa. We have a direct flight from Lagos to Dakar. We have round-trip service from Lagos to Freetown, to Banjul to Dakar. We go to Accra and Roberts Field/Monrovia. We used to have 'Savannah Express' going from Lagos to Cotonou (Benin), Ouagadougou (Burkina Faso) and Bamako (Mali) and then to Dakar. But the unstable situation in Mali meant we had to stop that. We will resume as soon as everything settles in Mali.

We are talking to the authorities in Cote d'Ivoire. We want to go there.

We want to go to Togo, but the authorities of Togo haven't allowed it, because they are working with ASKY [an airline headquartered in Lome owned by Ethiopian Airlines and Togolese interests].

In Nigeria, we try to assemble a fellowship with other countries, but some other countries don't reciprocate. We don't believe it's right for these authorities to block our application to operate in our airline, and we're working on this.

And beyond west Africa?

We fly to Douala in Cameroon and to Kinshasa. We're going to Luanda in Angola and to Johannesburg. In 2014, we want to extend our reach and "spread our wings" across more of Africa. We're expecting two units of 737-800, the Skyline. With that, we should be able to go to Egypt and North Africa and then to East Africa and add more frequencies to South Africa.

We go to New York three times a week. To go to New York from Lagos, we need two planes on a daily basis, so with the added A330-200s, from October 2013, we should be going Lagos to New York on a daily basis.

Do you find yourself at a disadvantage to be a Nigerian company operating outside Nigeria?

It's a bit of a disadvantage. Many Nigerians like to fly foreign airlines. If you make a shoe in Lagos, nobody will buy it. If you make that same shoe let's say in Ghana or Egypt or the U.S. they will buy it.

But we think we're winning out. Many thought because it's a Nigerian airline, we can't afford a new aircraft. But we use new aircraft, straight from the factory. They're not pre-owned. We show Nigerian movies and we started serving Nigerian cuisine, along with western food.

We did this to encourage Nigerians [to fly with us]. We also have many non-Nigerians flying with us.

We maintain a very high standard. Our cabin crew and all our pilots are well-trained. We have a partnership with Cranfield University in the United Kingdom to provide ongoing professional training for all our staff, to improve their skills. We're focusing on quality.

What difficulties do you face operating in Nigeria?

This business in Nigeria is a bit difficult. There's a lot of inconsistency. My view is that the Nigerian Civil Aviation Authority (NCAA) needs to upgrade its operations. The aviation industry needs a lot of support from government, and everybody needs a lot of training.

There's a lack of maintenance capacity in Nigeria. A lot of it has to be done in Malta. Our maintenance is handled by Lufthansa - both the Bombardier fleet and the Boeing fleet. They have about 27 German engineers here, and we are training Nigerian engineers. We won't compromise safety. We don't compromise that.

How difficult was for you to get landing rights in the United States?

It was difficult. The United States has stringent requirements. Arik is one of the few airlines in Africa with U.S. landing rights. We are very proud of it.

We want to thank Ambassador Robin Sanders [the U.S. Ambassador to Nigeria from 2007-2010] - because it's under her watch that Nigeria was certified as CAT 1.

[Editor's note:

To achieve a 'Category 1' rating from the U.S. Federal Aviation Administration, which is required for civil aviation landing rights in the United States, a country must meet safety standards set forth by the International Civil Aviation Organization.]

And now we are getting landing rights in Israel as well. We want to fly to Tel Aviv.

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