Nahco aviance: Morphing into a profitable swan

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Ime Akpan

Privatisation works because it exposes companies to the forces and incentives of the free market. Such firms now have to respond to the demands of investors, managers, employees and customers. Combined with exposure to greater competitive pressures, such companies stay afloat.

This is the story of the Nigerian Aviation Handling Company Plc (nahco aviance), incorporated on December 6, 1979 as a private limited liability company of the federal government under the then Enterprises Promotion Decree and sold to core private investors in 2005.

Nahco aviance has proved to be a viable investment, creating a nation of shareholders since its privatisation and morphing from a laid back and an unprofitable government-owned organization into an ambitious market leader and a recognized brand in the comity of global ground handling companies.

ISAGO certification IS THE MOST IMPORTANT FOR ANY AVIATION LOGISTICS FIRM AND IT HAS ENLISTED NAHCO AVIANCE INTO THE PREMIER LEAGUE OF GLOBAL GROUND HANDLING OPERATORS. IT IS SELECTIVELY AWARDED AFTER A LONG BUT PAINSTAKING AUDIT PROCESS. LITTLE WONDER THAT NAHCO AVIANCE IS THE ONLY COMPANY TO HAVE BEEN EVER SO HONOURED IN THE WEST AFRICAN SUB-REGION

It has discarded the most incongruous business model it inherited from the federal government and with more than 1, 700 personnel including expatriates, the foremost Nigerian ground handling firm has three subsidiaries: a) Nahco Free Trade where it holds N10 million ordinary shares of N1, representing 100 per cent of the share capital of N10 million. The operations of NFZ include leasing of plant and equipment, logistics, warehousing, trans-shipment, manufacturing and provision of related services. b) Nahco Power and Energy Ltd in which the company holds N25.5 million ordinary shares of N1, representing 63 per cent of the issued capital of N40.5 million. c) Mainland Cargo Options Ltd where the company holds 4, 000, 000 ordinary shares, representing 40 per cent of the issued share capital of N10 million. The remainder percentage is owned by Nahco Energy and Power Ltd.

*Acting MD, Nahco Aviance, Mrs. Folashade Ode

In 2003, the company handled 7, 782, flights; 9, 967 in 2004; 9, 586 in 2005; 12, 879 in 2006 and 16,564 flights in 2007. These and some other figures have improved tremendously over the years. For instance, the company handled 39, 669 flights in 2015; 37, 209 in 2016 (-6 per cent decrease); 1, 433, 282 inbound passengers in 2015 and 2, 031, 093 in 2016; 1, 665, 819 outbound passengers in 2015 and 2, 104, 990 in 2016. It handled 84, 626, 708 tonnes of cargo in 2015 and 64, 937, 804 tonnes in 2016 (-23 per cent decrease).

NAHCO AVIANCE HAS PROVED TO BE A VIABLE INVESTMENT, CREATING A NATION OF SHAREHOLDERS SINCE ITS PRIVATISATION AND MORPHING FROM A LAID BACK AND AN UNPROFITABLE GOVERNMENT-OWNED ORGANIZATION INTO AN AMBITIOUS MARKET LEADER AND A RECOGNIZED BRAND IN THE COMITY OF GLOBAL GROUND HANDLING COMPANIES

In 2007, the company invested over $4 million on equipment acquisition and proposed to spend $6 million the following year. In 2016, it invested N2 billion on re-fleeting of ground support equipment (GSEs) and inaugurated its warehouse in Enugu as part of efforts to deliver improved services to its clients.

Back in 2008, for instance, most of its equipment had an average age of 20-30 years old, but currently, the average age of the equipment is 2-3 years. From its privatisation till date, the company has spent more than $17 million to expand. And it’s still counting!

Prior to its privatisation, nahco aviance operated in Lagos, Abuja, Kano and Port Harcourt airports. But since it went public, it has become a matchless leader in the ground handling service sub-sector of Nigeria’s aviation industry currently operating in 13 airports, handling more than 35 airlines, more than 75 per cent of domestic airlines, 83 per cent of international airlines operating in Nigeria, and 80 per cent of cargo airlines. The market share is still counting!

Between 1979 and 2005, the federal government had 60 per cent equity held through the Federal Airports Authority of Nigeria (FAAN) while Air France, BA, Sabena and Lufthansa shared the remainder 40 per cent. After the privatisation, the ownership structure changed. Currently, nahco aviance is owned by over 80,000 Nigerians (68 per cent), British Airways (10.7 per cent), Air France (5.8 per cent), Lufthansa (6.0 per cent), Rosehill Group (9.5 per cent) and Sycor Private Investment Ltd (8.93 per cent).

Nahco aviance’ offers passenger facilitation, cargo handling at its network of customs bonded warehouses in Lagos, Kano, Abuja, Enugu and Port Harcourt using the galaxy computerization system; aircraft handling; aviation training which provides training support for Nigeria’s aviation industry especially in ground handling competences through a 34-day intensive training programme in ramp and cargo operations and passenger services, IATA DGR Category 3 (initial and recurrent) and IATA Cargo Introductory; crew transportation for airlines’ crew/passengers, business people, dignitaries as well as private jet owners

The company’s vision is to be the preferred aviation handling company, globally competitive, adopting world-class practices. It mission is to provide distinctive aviation handling services supported by efficient resources and adaptable technology leading to added value to its stakeholders while striving to ensure that its customers’ expectations are constantly exceeded, its shareholders obtain maximum returns and “we remain socially committed and contribute significantly to the overall development of the aviation industry” and not forgetting its core values which are safety, integrity, reliability, innovation, and respect for the individual.

That nacho aviance Plc is a success story is exemplified in its 2006 admission into the international alliance of aviation ground handlers’ world-wide (Aviation Alliance) in order to profitably reposition its business and compete favorably in the international market. Consequently, the company was elected to serve on the Board of International Aviation Handlers Association, Africa (IAHA Africa) at its meeting in Marrakech, Morocco.

At the 2016 Global Risk Awards held in London, the company was tops in the most competitive category ‘Excellence in the face of adversity’ and beat Arcelor Mittal (UK), Leicester City Council (UK), Roy Hill Holdings Pty Ltd (Australia) and Council Services and Chancellery University of Newcastle (Australia) to clinch the coveted award. The company was also voted overall winner in the public/technology/healthcare/transport and aviation industry category at the 2015/2016 edition of the Nigerian Risk Awards.

In the course of its operation, the company has scored many firsts: First full-fledged ground handling company in Nigeria; first ground handling company to be privatized and listed on the Nigerian Stock Exchange; first ground handling company to be ISAGO (IATA Safety Audit for Ground Handling Operations) certified in Nigeria.

ISAGO certification is the most important for any aviation logistics firm and it has enlisted nahco aviance into the premier league of global ground handling operators. It is selectively awarded after a long but painstaking audit process. Little wonder that nahco aviance is the only company to have been ever so honoured in the West African sub-region.

THE COMPANY’S ROLLER-COASTER RIDE TO SUCCESS IS MADE POSSIBLE BY HIGHLY MOTIVATED STAFF WHO ARE REWARDED FOR CUTTING COSTS, REDUCING RISK AND MAKING MONEY. STAFF ARE BEING TRAINED AND RE-ORIENTATED. IN THE RECENT PAST, SOME STAFF WON AWARDS IN DIFFERENT CATEGORIES

The registration is aimed at improving safety and cutting airline costs by drastically reducing ground accidents and injuries as well as reducing time.

With the ISAGO registration, the company’s operations have received IATA’s pass mark on safe operations and minimum accident records, thereby saving airlines the trouble of frequent audits of ground operations.

Nahco aviance is also the first ground handling company to get the European Union (EU) validation on safety (Ra3) in Nigeria; first ground handling company to get a 32-tonne main deck loader in Nigeria; first ground handling company to have IATA certified training centre in Nigeria; first ground handling company to handle international airlines at the Enugu international airport; first ground handling company to handle Concorde and B747-800  and Boeing 787 Dreamliner aircraft in Nigeria; first to build and operate a warehouse to handle 290, 000 tonnes of cargo per annum; first to sign MoU with the Nigeria Air Force (NAF) on training in Nigeria; first to become a member of the African Aviation Training Organisation (AATO); first to secure licence outside Nigeria; first to be awarded free trade zone (FTZ) licence; and first to commence a 24-hour cargo operations from the Lagos airport.

As a global player, nacho aviance is a member of many international organizations including International Air Transport Association (IATA), Aviation Alliance (aviance), Airport Services Association (ASA), International Air Cargo Association (TIACA), and Association of African Training Organisation (AATO).

Its membership of the alliance has provided a veritable platform for the company’s re-branding of programme which cuts across organisational culture and orientation, corporate uniform and brand name.

The company’s roller-coaster ride to success is made possible by highly motivated staff who are rewarded for cutting costs, reducing risk and making money.

Staff are being trained and re-orientated. In the recent past, some staff won awards in different categories.

The company’s acting managing director Mrs. Folashade Ode has tasked the staff to up the ante, be vigilant and dedicated to duty.

She announced that the board had mapped out a phased plan to reconfigure and re-align the top management as part of the reorganization process to re-position the company for better performance and growth.

“The re-organization is part of the board’s response to the ever-changing market conditions, the overall nacho aviance growth strategy and to demonstrate the board’s resolve to improve performance and pursue the business sustainability and growth agenda going forward,” she said.

 

 

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