We commence our Meet The Executive series with an up and close interview with Nigerian aviation veteran, Mr. Trevor Henry, who is the Chief Commercial Officer of one of Nigeria's rising star airlines: ValueJet.
Here is an excerpt of our exclusive conversation with him.
da: Firstly, I would like to welcome you Trevor and indeed congratulate you on being the first Executive to appear on our new Meet The Executive segment at dre aviation. It seems like ValueJet are banking all of the first mover advantages of late.
TH: Thank you. Yes, ValueJet’s marketing strategy is to position the airline as a HYBRID as opposed to the traditional airlines operating in the Nigerian market. Being a new entrant airline in the Nigerian market of 6+ months, we had identified a niche to position ValueJet as an innovative airline different from other airlines.
da: So you recently commercial launched operations, how is business faring, do you have healthy load factors?
TH: ValueJet launched their flight operations on 10 October 2022. ValueJet's first flight from Lagos to Abuja was fully booked and other flights on the day had good passenger loads too. The load factor has had its ups and downs according to the high and low seasonal trends. The first launched promo: “Your first flight is free” was well received and many passengers had positively contributed to the load factor at the time of the promo. Subsequently, on the 100 days anniversary, passengers were able to fly for as low as 40,000 Naira one-way in economy class with 7 kg carry-on baggage, or 50,000 Naira one-way in economy class with 7 kg carry-on baggage plus 23 kg of checked baggage. The two levels of fares are referred as ValueLite and ValuePlus respectively.
da: We have seen fares drop again in the market, can airlines really be cashflow positive at NGN40,000 a sector on the domestic market?
TH: No, not at 40,000 Naira. Airlines need to revenue manage their flights to optimise flown revenue to cover operating costs plus other costs.
da: Let's talk about fleet. You currently operate 3 Bombardier CRJ900s. Do you have any plans to increase fleet in the near to medium term?
TH: The 3 CRJ900 aircraft were the prerequisite for the AOC. In the very near future 2 CRJ700 aircraft will be added, plus 1 CRJ200 cargo aircraft, bringing the fleet to 6 aircraft.
da: Green Africa recently announced an expansion in their route network from Abuja, do you see the Northern routes as potential areas of expansion for ValueJet in the future?
TH: Yes, ValueJet intends to extend its flight operations to include Kano, Yola and to connect Port Harcourt to Abuja in the near to medium term.
da: Do you see Value Jet going regional or international at some stage:
TH: Yes, in the medium term after the ValueJet domestic route network is well established.
da: Something that worries us in our analytics division is that there seems to be a deluge of capacity coming online in the domestic sector, especially with Rano Air to launch shortly, talk of NG Eagle being granted an AOC and preparing for operations and of course, Air Nigeria being primed to launch before the end of the government's administrative term. Do you see this extra capacity and competition a threat to current airline business models currently operating in Nigeria?
TH: Competition is good, providing the new entrants grow the market as opposed to taking a share of what already exists. Nigeria has seen airlines come and go, and perhaps, we may see some go, if the newcomers do not contribute towards the growth of the market by offering new routes and operating on under-served routes.
da: When we heard the name Value jet, we immediately thought LCC, another Green Africa if you will. However, when we look at your fares, you are not the cheapest, infact far from it. Where do you position your airline with regards to the LCC or fully fledged carrier segment?
TH: ValueJet has positioned itself in between the LCC Green Africa and the fully fledged carriers; hence, the HYBRID approach. Yes, the ValueJet fares currently range from 42,000 Naira for ValueLite or 48,000 Naira for ValuePlus with 4,000 Naira increments up to 78,000 Naira and 84,000 Naira, respectively.
da: What sets ValueJet aside from its competitors in Nigeria?
TH: The unbundling viz. seat only and bundling viz. seat plus checked baggage, allowing the passenger to have value for spend. To explain, most domestic flights are 1-hour to 1-hour-30, allowing same day roundtrip domestic travel; thereby, the need for checked baggage is superfluous to these passengers; hence, the ValueLite fares offers a 6,000 Naira saving.
da: Do you think that the AON fairly represents the views and concerns of all carriers in Nigeria? Does Value Jet actively participate?
TH: ValueJet is new to the AON. But, when with another airline, the AON had done well on some fronts. One that comes to mind was the removal of VAT from domestic fares.
da: What do you think are the three most critical challenges facing the Nigerian commercial aviation space today?
TH: The price of Jet A1 fuel, customs duty on aircraft spares and more favourable exchange rates when paying for aircraft spares and servicing of aircraft outside of Nigeria.
da: Where do you see Value Jet in the next 3 years
TH: The projection is to see ValueJet with a mixed fleet of 6 to 10 aircraft to serve both its NG domestic and regional CWA network.
da: What are your views on SAATM, do you think it will be implemented effectively within say the next 3 year period?
TH: At the last count there were 30+ countries signed up for SAATM. The key element is to expedite the implementation of the Yamoussoukro decision that has been an ongoing process for many years. To answer the question, I am not holding my breath.
da: What do you think are the advantages and challenges to SAATM?
TH: The advantage will be the opening up of the African skies to boost traffic flows, increase connectivity, drive economies, create jobs and boost annual GDPs of the member countries.
da: A quick fire round, just a yes or no answer
da: Is the NCAA an effective regulator?
da: Should FAAN be privatised?
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
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?
Trevor was a pleasure to converse with and we wish him and ValueJet more success going forward. We will speak with him again in the near future to get further updates on the ValueJet position and look forward to announcing their fleet expansion as it happens.