A Review of the Nigerian Energy Industry

Bristow Nigeria expands, invests in security, training

24 February 2013, Sweetcrude, Lagos – Akin Oni is the managing director of Bristow Helicopters (Nigeria), a company that has operated in West Africa for more than 50 years, primarily providing crew transport services to offshore drilling rigs and production platforms in the Niger Delta area.

Oni has been in the industry for nearly three decades; having started out in the 80s as an aircraft engineer and then trained as a flight pilot.

In this interview with Hector Igbikiowubo, he speaks passionately on developments within the aviation industry in Nigeria and Bristow Helicopter’s effort to continuously add value through training programmes for pilots and expansion of the company’s hanger facilities in Port Harcourt


Rebuilding the aviation economy of Nigeria from your perspective

Specifically, to the industry, things we could not do 20 years ago, we are beginning to do them now. We all know the infrastructure challenge; people see it more in building, especially passenger terminal, but there are other infrastructural issues within the terminals. Does the toilet work? Do I have to wait for hours for my bag to go through the process? These are basic airport infrastructure. Recently, people expressed concern about the runway light. Again that is a challenge in being 10-15 years behind in developing the sector. Concerning the airspace, there are normal things that ought to be done as part of total knot up of the aviation industry that we did not do before, that is beginning to come into the system. Late, yes but nevertheless there is progress in that area. If they continue to invest and remain forward looking as a nation, it will pay off soon, and it is all about competitiveness. So, the progress should be to meet the next target and not for the challenge to catch up with the existing problems thereby depleting again. In the context of our own industry, we are more in the oil and gas service delivery sector, we have seen improvements made in airport comforts in Port Harcourt and in Lagos the Federal Airport Authority of Nigeria (Faan) is really driving this. And we are not lagging behind in developing the Nigerian airspace. Last year we spent amount in the region of $7 million developing facilities in Port Harcourt. We built a new hanger. And we plan to invest another $4 million in another hanger still in Port Harcourt. That is because of the level of confidence we have, and to be relevant in that sector in 10years time, we need those facilities. We are extending our ramp in Port Harcourt; and we are looking for more lands to extend our terminal. The aim is to catch up with opportunities in 10-15years time. Perhaps, if you look at the pace of development in Nigeria in 10-15years time, the current facilities will not be enough to cater for what we want to do. So we are talking to the airport authorities in Port Harcourt to lease more lands. And we are looking forward to build a bigger terminal and bigger facilities to handle the level of work that we see. There, I see a lot of opportunities. In other locations were we operate, they are mainly owned by oil companies but Port Harcourt is our facility and we are investing in it.

Does the ongoing expansion reflect a growth in Bristow’s market share?

The market share I would say, yes it is shrunk but we are also benefiting from new opportunities that come up, that others don’t have the capacity to execute. However, that the capacity that we lost, I would say we lost about 25 per cent of the market share, but we have about 5-10 per cent of that because we have the prerequisite capacity to do the extra work. We usually get the contract that brings about upshoot in our growth. The market share will change, and such change usually occurs over the tender period. So what we lost two to three years ago becomes available for tender in another three years, and based on our timing, if we get this build-up in terms of infrastructure and capabilities, we will be in the right position to win those opportunities when they come up. So, that is the direction we are going. We have accepted the change, we have moved on and we are looking for new opportunities,  and we are going to get back into the market when those opportunities are back for renewal. And that is the industry, except all those in control by the oil companies and it’s tied to their projects. Therefore, we are hopeful of having succour between 2015 and 2016 when the tender market will come up again. At that time we will be appropriately seized for those opportunities, we will have the right people, aircrafts and facilities to be able to win them.

Can you address your plans to expand and the growth in market share in the face of the security situation in the country?

Security remains a huge cost for us. The reason for that is we are scared because of the happenings up North. And people believe somebody may attempt to do something down south. So, if you look at our facility in Port Harcourt today, we have beefed up security; we have several baggage scanners and metal detectors. We didn’t have those things before. You don’t just buy two, you have to acquire four. We had to take on more people, and we have to do security checks at different points before one board the aircraft. So, substantial amount of money goes into security on a daily basis. This is the reality in Nigeria today and the reality in the world generally. Fortunately, when the late President made that decision (of granting Amnesty to militants), he made a huge change in Nigeria which has not been fully recognized out there. Without that, today, we probably will not be operating in Port Harcourt, we certainly wouldn’t be operating in Warri, and neither would companies be in operation in Warri. It would have been extremely difficult for anybody to get anything done. Amnesty made a huge difference to Nigeria and it is a pity that nobody has really sat down to quantify what that did. I see the programme has made Port Harcourt become the vibrant place it used to be again. Although I haven’t seen much in Warri but it will happen. We certainly feel it; I can go to Port Harcourt, we can move our expatriates around, previously we couldn’t. They were in the bus and went in-between the accommodation which was heavily fortified. We have seen that change, but could that have happened without the amnesty. Impossible! Impossible! We were receiving bullets in aircrafts back then. We have got pictures of bullets that went through our aircrafts. There were several areas that we couldn’t even fly into back then and everywhere we flew into we had to do a reconnaissance. We shouldn’t be flying in conditions like that, we are commercial operators.

Earlier, you talked about expenditure on hangar expansion. How much level of Nigerian content implementation was achieved?

These are infrastructures built in Nigeria; the hanger, etc. I will never be satisfied with the level of Nigerian content. In our industry, to get an appreciable level of Nigerian content you really need to build an aircraft in Nigeria. In the oil industry we are talking about ownership of the assets, what they are beginning to do is that they are building pipes in the industry, plants. What we should be talking about is building an aircraft in Nigeria even if it is assembling a helicopter.

How far are we from building an aircraft in Nigeria?

A long way off, the only way I could see that happening is in a sort of joint venture. We are talking about 30 aircrafts to be bought, but I wouldn’t do that without pushing for an assembly plant, even if it was for the very basic aircraft that could be used as a regional carrier. I wouldn’t invest that sort of money without pushing for this, the Chinese do it. That way, we set standard for aircraft to be used in Nigeria. If buying the 30 aircrafts is true, I would insist that we use the platform to put something on ground here, because we learn in that process. And the multiplier effect that the people are going to enjoy is huge. Basically, we are a long way from building aircrafts in Nigeria.

…Even if we are, do we have the capacity?

We don’t have the people, let’s be frank with ourselves. There are a lot of reports by aviation personalities on building maintenance facilitate in Nigeria to work on large aircrafts, but we do not have the people to support that maintenance facility. I can say that openly because in Bristow here we are far ahead of any other operator in-country because we invested here and with the number of people that we have trained. Every other investor knows how much we spend in this area. We spend a lot at Zaria training pilots. This year it is $8 million on people going out to attend training and retraining; our pilots are attending course on helicopter taxiing and operation. So, that one side of it and if I look at the number of Nigeria who are involved on that, at the moment we have 18 Nigerians in Zaria undergoing engineering training. We have just selected a whole lot for training in Zaria If we open a maintenance hangar today, the only way we can make that work is if we bring in experts. Yes, we have to start somewhere, but there will still be that gap and there has to be that training process, that mentoring process to bridge that gap. There have to be aggressive courses to ensure Nigerians are trained in that process and it doesn’t go out

What happened to the crop of experts in the era of Nigerian Airways?

They have aged. If you are lucky, you will still find a few who are below 60.

By implication, at a time, Nigeria stopped training pilots?

That is the fact, everybody stopped. I went through the training school in 1986-87, since then the hype was lowered it stopped. If you look at the young pilots today, they could not learn from the expertise of the crop of experts then. Thus, we effectively cut off a large chunk of the society of those who could do the job but cannot afford the cost of bottom-line training. For us it costs about $250,000 to train a pilot and the Helicopter is more expensive. For the fixed wing, it probably costs about $150,000 to train a pilot – how many families can take a chunk of $150,000 to train a child. But Nigeria Airways did that in the past, they sponsored people in Zaria and to other parts of the world. But the then Nigerian Airways pilots, they were trained under the government’s scholarship programme. If you don’t have a scholarship today and you have to bootstrap your way through the training, it can be very expensive. Some families have sold homes and other valuables

The last time we spoke you complained about losing pilots to other competitors, what is the current situation?

I don’t mind losing expatriate pilots. It is painful. So, if I lose a Nigerian-trained pilot that is almost like a knife in my back. And we’ve lost a lot to the to the competition, but presently that has been taken care of. We have seen a change, because the grass is not exactly green on the other side and they’ve found out. We have seen a change because we’ve had to do some soul-searching; we have engaged the people – pilots and engineers. So, the attrition on turnover has gone way down. I will say in the last six months, we haven’t lost any pilot to the competition which means we are doing something right. Though we haven’t put our finger on exactly what that is, It is not about pay, however something has changed. They now see a career in this. We are doing the interviews now where we select the candidates for ab initio training, we make sure we select the right people; we are finding a bunch of very smart Nigerians with first class degrees and we are asking ourselves are they doing this because they need a job or because they love to fly. That is the next level of challenge. Obviously, there is a lot of negativity about Nigerians and the educational system but somewhere out there the educational system still works because there some qualities you look out for. On failure rate, last year we had to send only one person home. He just couldn’t fly, though he is good mentally.

How would you rate general safety in the aviation industry?

Well, people are extremely sensitive about it, but how do you measure that safety. The fact that somebody has an incident or accident does not necessarily mean they did not run a safe operation or that the entire system is not safe. Nevertheless, when we visit an organization we look at their systems and the people managing the systems; their behaviours: are they jumping down the staircase? Or are they engaging in those things that point at safety, cutting in on organization? On the airline, we don’t have options yet, it is either Aero or Arik Air; others are just coming into business. Aero had an issue while Arik Air has proven itself. As to the others in the industry, the best way to measure safety is to get statistics from the Nigeria Civil Aviation Authority (NCAA). It is too wide a measure. I think they have improved substantially though, because everybody is watching, even when I get to the airport I try to watch how things are being done.

What is the ratio like, between Nigerian pilots and expatriates in Bristow Nigeria?

Currently we are tending towards 40 to 50 per cent. If you count the number of Nigerians undergoing training right now in the USA, we have 10 Nigerians nationals undergoing training. A batch will come in between May and July, while the next batch will be towards year end. At the moment we have pruned down the number of people who are going next to 20. We hope to get out of tis number about 15. First they will get to Zaria where they will get training on fixed wings; they will do 15 hours. After that, we then send them to the States where they will be trained on Helicopter. In the past we just sent them direct to the States where they did everything, but now in Zaria they learn the basics of flying and it is money being put into the system. We are about signing an agreement with the international aviation school in Ilorin where 10 other students will probably be sent for training. With this I think we are probably in the ratio of 40 to 50 per cent, I can’t be precise at the moment. If you remember the last time you were here I said Nigerian pilots were about 25-30 per cent and that was because we lost a lot of Nigerian pilots. However, we are on track for our 2015-2016 targets to have about 90 per cent of the pilot population as Nigerians if we retain them. And with the retention that we have now coupled with a hope that nothing drastic changes in the aviation world, I think we will be on that path. The next challenge for us is as we are bringing these young people in, how many can the system absorb.

Are Chopper Services included In the intervention fund, and how much problem does finance pose to your operations?

Yes, chopper services are included in the intervention fund, but we did not participate. The financial challenge is quite huge. There is a capacity issue with the local banks to lend and there is the credit rate issue. And this is the complacency of the excesses; we are asking the Nigerian airlines to compete in the global market space where they have to source at rates that are not up to 20 per cent; when a competitor like British Airways obtains credit at a rate less than five per cent. There is no way you can compete with that. And their access to funding is wide and open. That is a major challenge we have in Nigeria-financing an airline and aviation operations. There is no way you will sustain business in aviation with 20 per cent interest rate. There is a joke from Richard Branson on how to become a millionaire ‘you start out with a billion dollars and somehow you are so interested in the airlines business and you go into it and before you realise it, you come out a millionaire.

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1 comment

  1. Sweetcrude Reports via Facebook Reply

    We salute the tenacity of purpose exhibited by the management of Bristow Nigeria and urge other foreign companies doing business in-country to borrow a leaf from them.