We continue our Meet The Executive series with our first ever interview with Mr. Mazi Okonkwo, COO of one of Nigeria's newest and rapidly growing airlines; United Nigeria Airlines.
da: So, Mazi, lovely to meet you, as you are a relative new comer to the industry can you please give us and our followers a little background on yourself.
I am Mazi Osita Okonkwo Executive Director/Chief Operating Officer United Nigeria Airlines. United Nigeria is my first serious encounter with the aviation industry as a business other than being a frequent flyer both locally and internationally. I have engineering and finance training background and have worked as a design and construction engineer on very large scale projects in Nigeria and before venturing into development banking, real estate development and private equity internationally and locally. For over 25 years, I was with Shelter Afrique a regional housing and development finance institution based in Nairobi Kenya with operations then in over 45 African countries. I rose to the position of Acting MD before venturing into real estate development and private equity in 2011 in Kenya and Nigeria. So when the opportunity opened up in 2020 to venture into the aviation industry, I had no hesitation whatsoever to jump into this new field and challenge.
da: Firstly, I would like to welcome you Mazi and to congratulate you on your recent IOSA certification, you really have joined an exclusive club in Nigeria where only a handful of airlines are IATA certified.
MO: Thank you. It is a major achievement for us and I must seize this opportunity to express our profound gratitude to members of Team United Nigeria that worked so hard to enable us to achieve this status, more so within 2 years of our commencement of operations. We also thank the regulators and other collaborators that provided us the required support. We had primed ourselves from the onset to operate within global standards as codified in the IATA Operational Standards Audit, which IATA is a custodian of. We know that this is not an end game but a process which we are committed to upholding during the period and in subsequent audits. We are ready to the reap the benefits and opportunities IOSA certification opens up for us, especially in our regional and international route expansion programme. So watch this space!
da: We understand that you operate a mixed fleet of aircraft at United Nigeria Airlines, some owned, some leased, can you please clarify the status of your current fleet?
MO: Not quite. We actually operate only a fleet of 4 ERJ145 aircrafts for now, all owned by United Nigeria. We have however from time to time entered into short term wet lease arrangements, mainly for A320 aircrafts. da: What are your fleet plans for the medium to long term?
MO: We would like to continue with our ERJ145 fleet and if the opportunity arises expand it because of the operational flexibility it offers us in our peculiar environment. However we also plan to, in the short and medium term, expand our fleet to include larger capacity regional type aircraft preferably of dual class configuration. This will suit our regional expansion and passenger and cargo lifting projections. We are therefore talking to major lessors and OEMs with a view to getting deals that will work for both parties. We are happy with the collaboration and interest from these parties. da: How do you see your network growing domestically?
MO: We are United Nigeria and our plan is to cover the length and breadth of this great country. We are already set up in 9 destinations and 10th and 11th destinations will soon be operational. In a few months, 6 more destinations will follow. Similarly, frequencies to already established destinations and routes will be increased. da: Do you have any plans to go regional or international at any stage?
MO: Yes. It is a necessary stage in our development. Nigeria is the leading economy in Africa and rest of Africa looks up to us to show effective leadership in all sectors. We have seen the progress the banking sector is making across Africa. This should be replicated in other sectors. So United Nigeria is poised to commence regional operations soon. In this regard, we have fulfilled all the statutory requirements for regional operations including obtaining our Air Carrier Permit (ACP) and designation to various countries. Discussions are ongoing with respective CAAs of these countries for further actions. da: United Nigeria Airlines are seen as a cautious and conservative airline, you are also very constrained in your marketing and PR, why is this?
MO: Not necessarily. It is a matter of style and strategy. We are present and active across all channels and social media platforms. We however believe in our actions and services doing the advert and PR for us. Our primary focus is on ultimate, excellent customer service that creates sustainable and long lasting relationships with the travelling public. We endeavour very hard to create, develop and retain trust with our customers. In our marketing, we are real and transparent with our esteemed customers. da: Green Africa recently announced their expansion in the North of the country and the establishment of a second hub in Abuja, do you see any potential in the Northern markets? Any plans to follow suit?
MO: We play our own game according to the terms and goals we have set for ourselves. Like I mentioned earlier we are United Nigeria…flying to unite. Nigeria is our market. Spreading the Nigeria brand all over Africa and the world is our goal. da: Airline profitability and longevity of carriers always remain a concern, how are you faring at the moment, is your balance sheet robust?
MO: We have actually done quite well and as projected, despite the tough operating environment including the global Covid-19 pandemic. But there is always need for improvement. We started with a very strong balance sheet and are committed to remaining strong through sound operational and financial management. Our directors have a long term view of the market and do understand the cyclical nature of the market and country. Yes, we can manage the usual risks associated with the industry but not the crises the country inflicts on itself from time to time. Having said this, I must add that Nigerian operators are some of the most resilient operators in the world. Some international operators have tried Nigeria and we know the outcome. In this regard, we must continue to urge for support for our operators who have continued to operate in this very difficult environment. da: Do you think that overcapacity may be creeping into the domestic market? Especially with current operators expanding fleets and also Rano Air entering the market shortly?
MO: Over capacity in Nigeria? Not anywhere near that. There are many airports that barely receive one flight a week. The more the merrier and opportunity to grow and expand the market. Look at what Uyo has become and you know why. Air travel remains the exclusive preserve of the upper class which should not be the case. The more carriers you have the easier it is for the middle class, students and so on to access air travels. It will also allow operators to cover other underserved and newly opened airports.
da: Can carriers really be sustainable at NGN40,000 fares for a 1 hour sector in Nigeria?
MO: There is really nothing wrong in having N40,000 in the inventory. There are promotional, special and discounted fares at various prices and times. These are normal tools in the marketing box. The critical measure is the average fare and revenue per available seat realised. Once an airline is working within its breakeven point they are free to charge whatever they like or even offer free tickets from time to time. I am confident however that we have serious hands manning the commercial desks of our airlines. da: Has the Forex scarcity issue subsided of late? Is it still an issue for United Nigeria Airlines? MO: Forex scarcity is not only an industry issue but also a national issue. Yes United Nigeria, like most airlines both local and international, is still facing this problem. da: Last year, the domestic ground handlers in Nigeria increased their rates nearly 3 fold. How did this affect United Nigeria Airlines? Do you think it was fair or do you think the duopoly went too far in the pricing regime?
MO: It impacted us seriously. While increases are normal in the economic environment we operate in, a 400% increase in one go is not justifiable and injurious. It was quite insensitive for anyone to have contemplated this quantum of increase. Anyhow, discussions have continued with ground handlers and we believe that things would settle at a place where all concerned would be happy. The idea always should be to create a win-win for all parties. The airlines should not be seen as the milk cow. da: How is the Spring Alliance going?
MO: Spring Alliance will require further work and development. We are talking and will keep all interested parties informed of the progress we are making. I must however say that we were quite elated by the interest Spring Alliance generated with the feedback being that it was long overdue. What we need in this market is ‘co-operation’ for the good of the customers. da: Some would argue that the Spring Alliance is nothing more than a passenger reprotection contract and you had those anyway with other carriers. Was the Spring Alliance over hyped?MO: Not necessarily but people are entitled to their opinions. The good thing about this market is that there are many experts and views and you can pick and choose what you like. Seamless reprotection is good for the customer which is what matters. da: Has the availability and pricing of Jet A1 stabilised recently?
MO: Availability has improved significantly except for some out stations where infrastructure is basic or lacking. Prices have also stabilized and in some cases falling. They are however still quite high for our operations. We hope they will continue to fall. da: Where do you see United Nigeria Airlines in a year from now?
MO: All over Nigeria. West and Central Africa and much more. da: A quick fire round, just a yes or no answer da: Is the NCAA an effective regulator?
MO: Yes, of course.
da: Should FAAN be privatised?
MO: No. If however you mean some airports, may be. FAAN is still needed for regulatory and other functions.
da: Do you think rogue airlines operate in Nigeria, by rogue we mean airlines that cut corners and seem to find a way to circumvent industry processes and accountability?
MO: No. Not under the current leadership of NCAA.
da: Do you think a number of the less well managed airlines will begin to fail in the next few years due to increased competition?
da: Do you think there should be more regulation in the sector.
It was an absolute pleasure to talk with Mazi Okonkwo and we wish him and United Nigeria Airlines team more success going forward. We will be in touch with Mazi on a regular basis to see how the carrier is progressing. We look forward to the airline expansion across Nigeria in the coming months.