My Critics Have Not Even Run A Supermarket   

Published on September 6, 2010 by TheNEWS   ·   2 Comments

BARRISTER JIMOH IBRAHIM, chairman of the Global Fleet Group who recently acquired Virgin  Nigeria told TAYO ODUNLAMI he acquired the troubled airline more out of nationalist and  humane considerations than a desire to make immediate profits. He lampooned critics who  concluded the new Air Nigeria would go the unsuccessful way of the moribund EAS which he  acquired in July 2006. “They have not even run a small supermarket in their lives,” he  remarked

How is the Virgin Nigeria acquisition working, in contrast with your unsavoury acquisition  experience of EAS in 2006?
The situations are different. We did not own enough shares in the first case, so, we could  not implement many decisions at the board level as we were not in control. I believe an  airline should own, at least, 50 per cent of its planes and the remaining 50 per cent should  be on lease. That this belief was not met in the first board does not mean I cannot continue  to push forward. In Air Nigeria, an off-shoot of Virgin Nigria, we have enough shares to  create policies that will make the commitment rewarding. So far, we are encouraged by the  results we are getting concerning the workability of the airline.
My main motivation for acquiring Virgin Nigeria was, and still is that I deem it sad, very  sad that a country as big as ours, with about 150 million people, has no airline to its  name. I believed I could correct that. So, our venture into Air Nigeria was conceived based  on national interest. Imagine how you will feel as a Nigerian when you are in any country in  the world and you see Air Nigeria landing or taking off. You will feel elated, won’t you?  One experience still makes me proud. There was a day I was in Ghana. I was at their airport  with their president who was walking towards his plane on his way out of the country, when  Air Nigeria, in bright green and white colours, was landing. The Ghanaian president stared  at it, looked at me with a smile and nodded his approval. That was a sign of acceptance. The  green and white colours made me proud. What I am saying is that I could have renamed Virgin  Nigeria Jimoh Airline or Igbotako Airline or anything. Nobody would have asked me any  question. I am a nationalist and I believe in this country.

The airline business is capital intensive, especially so in Nigeria with numerous charges,  debts and consequent high mortality turnover. Do these disturb you?
I am not disturbed. People either run into difficulties or they don’t, depending on how they  run their businesses. The policy documents that the serving board gave to the management of  Air Nigeria do not make the business bad or precarious as you have painted. I am bold to  tell you this because our turnaround scheme has what we call ‘the diagnostic report of  problems’. With this, we simply go ahead to fix problems. These are areas that we look at.  Anyway, with due respect to others, I don’t know about any other airline. I know about Air  Nigeria. That’s the one I am running. I know other people are running their own airlines and  I don’t think it’s reasonable for me to say anything about how they are running them, except  they become public companies. When they become PLCs, of course anybody can pass comments,  because then, they are public entities. And again, don’t forget that Air Nigeria is an  IATA-certified airline, the only one in Nigeria/West Africa. In Central Africa, it is still  the only airline that is a member of IATA.
We just received a letter from the London School of Economics which is requesting to study  the process of transformation Air Nigeria is passing through. They want to look at our  turn-around efforts. They will  have a lot to study because we have proven experience in  turn-around. We have been doing it in various companies – NICON, Le Meridien Hotel, etc..

How many aircraft does Air Nigeria have?
When we took over we had just two aircraft working. Now, we have six aircraft that can fly.  Two more will be arriving within 60 days to take the number of aircraft to eight.

Do you lease or you purchase outright?
We have the good name and means to lease or purchase aircraft or whichever I choose. I have  run my chain of businesses within a short time to the point that it is no longer difficult  for me to access credit anywhere in the world. And now, I rarely access credit here in  Nigeria, I do it abroad. I chose to do this for two reasons. First, it is cheaper, and it is  for 10 to 15 years. And you won’t believe it, I get dollars for as low as 2 per cent  interest rate. We can access funds through NEXIM and other big banks abroad. There, nobody  is going to embarrass me by publishing me publicly as a debtor and harassing me to service  my debt. But that is not enough for us to get discouraged about investing in this country.

How many routes is Air Nigeria operating?
We’ve started Benin-Owerri. We ply Port-Harcourt, Sokoto and Kano. One of the things that  give me joy is that when you are in Abuja now, you can actually move to Sokoto three times a  day. Before now, people would fly to Lagos before they can fly to Sokoto. We will soon start  Abuja-Kano. I have even advised them  that the plane going to Kano from Lagos can stop over  at Abuja. We should be having flights to a place like Kano every two hours. That’s the only  way to develop the potentials in the North.

What if the passenger flow is not encouraging?
It will be encouraging one day, eventually. We are not operating to start making profits  right from the start of business. It is the desire to make profits immediately that kills  many businesses; they believe once they open shop, they should declare dividends  immediately. You cannot start this year and expect to declare profits the same year.  Corporations are not run like that. You don’t give birth to a child and expect the child to  start walking the same day. He will walk gradually. What we are doing now is to put all the  structures in place, structures that will make things happen. Whether one is making profit  now or not does not disturb anybody who wants to give you credit. Whoever wants to give you  loan will still give you loan. In fact they run after you with loans depending on how you  run the company and other factors. I’ve not read the auditor’s reports at Air Nigeria but I  doubt whether we have made any profit since I took over. However, we shall definitely start  reaping profits. And once we are in profit, we are in profit forever.

So, how do you service the loans when you don’t make profits?
To service a loan is not a problem. If you call the managing director of Wema Bank, he will  tell you that I pursued him to come and take his cheque. But you see, you don’t expect me to  borrow and in the first year, I will pay back. That is not possible. I don’t mint money.  This is where the CBN got it all wrong. You cannot say that because I borrowed N1bn and it  remains N500mn, I should pay it in one day because your economy is in trouble. If you had  your facts right from the beginning, you would have known your economy would be in trouble  before you did the lending. This is one area on which I am not really happy with CBN. The  system is not really working fine.

How fast will Air Nigeria be turned around?
Two years. We should be able to finish the first phase in the first year. In the second  phase, we’ll be documenting policies for the board to work with and preparing new booklets  in accordance with regulations of the relevant agencies.

Would it be a policy at Air Nigeria to buy or bring in only brand new aircraft?
Since the acquisition we have been adding new aircraft. We have two brand new Embraers. And  we have another brand new one coming in, an E-170. But it doesn’t matter whether a plane is  brand new or not. What’s important is the maintenance culture. I once had one very  interesting experience. We were coming to Lagos from Sokoto in my 15-day old brand new  aircraft. About two minutes to landing, one of the fuel pumps packed up. But of course there  were two engines, so the pilot moved on. Even if the two engines pack up you can still move  to the nearest airport. Engineers worked on the plane and in their report to me, they wrote  that some particles probably entered the engine and blocked it when they were moulding it.  So, it was a minor thing. In fact, when you buy a brand new plane, the danger is in the  first 400 hours. Very, very dangerous. I know a businessman, when he bought his brand new  jet some years back, his door was not closing in the air. The danger in a plane manifests  mainly when its engine is brand new and during taking off and landing. So, it’s even better  to buy a second-hand but sound aircraft than buy a brand new aircraft, because in a new  aircraft, any unforeseen factory problem can happen in the first 400 hours. It could be  pump, electronics, etc.

Are you continuing with Virgin Nigeria pilots and the entire crew?
This turnaround will not call for sack of any staff, except for those that are fraudulent.  If we find you involved in fraud, you get dismissed on the spot.

How long will it take to complete the branding of Air Nigeria, as some of its aircraft and  other items still bear Virgin Nigeria?
It’s early days; we have enough time to do all those things. It’s not a one-day affair to  sort all those things out. The important thing is that Nigerians know that it’s no longer  Virgin Airline, it’s Air Nigeria.

What’s your stake in Air Nigeria?
I can’t disclose that to you, it’s private. I’m not compelled to say what my stake is. Again  it’s not a PLC, so nobody can ask me questions about what my stake is or what my profit is.

Media reports then said 49 per cent. You may be the core investor, but if you don’t own an  unassailable controlling interest, isn’t there a possibility of the lack of control you  spoke about in EAS re-occurring?
No no no. We are in control here,  but if you are expecting me to break down the  shareholding structure, no. It’s not a PLC so I am not compelled to divulge my stake.

The airline had a big name, the big Branson image before you took over. You didn’t create  the big name, did you?
Well, it had a name but the name was not enough to keep it alive. It was a dead airline.  Everybody knows that. It was debt-ridden. We cleared a N38bn debt. What name did you have  with N38bn debt hanging on you? But we were well received in the industry by the regulator.  Demuren (director-general of the Nigeria Civil Aviation Authority) will ground your plane if  you are not worth flying. He will not compromise it. If it has to do with administrative  problems, I can assure you, give him a telephone call and he will waive some things. But he  will not compromise on things like safety. That helps us investors. If he’s very strict with  us on safety, it means that there won’t be likelihood of any accident. It means our  investments are safe.

You said you paid about N38bn debt. What’s the debt profile now?
Zero to banks.

Zero? The belief out there is that all airlines, including Air Nigeria are hugely indebted  to one institution or another.
Most Nigerians have negative thoughts. When I started, they said ‘he can’t do it; will it  ever work?’ Yet they have not run one company before, not even a small supermarket. People  will air their views, but they don’t mean anything to me. Some of the things I do, I do them  for humanity and the nation. I am well made already. I came from the village and wasn’t born  with any company, neither will I leave this world with any. If I like, I will shut down the  company and what can anybody do about it? That doesn’t mean my home is shut down. Many of  the businesses we venture into have long-term prospects, they don’t possess any immediate  gains whatsoever. Rather, they gulp money we can conveniently employ for selfish interests.  The important thing is that we’re serving humanity in the process.

How has the Air Nigeria project affected any of your other businesses? Has it not affected a  project like The Mirror  newspaper, for example, which was expected to have hit the stands a  long time ago?
From day one, I made it clear we will need a year to two to turn around the old Mirror. We  are quite ambitious about the new Mirror. We are coming up with a Mirror that will have six  locations where it will be printed simultaneously. So, setting up one location is like  setting up a newspaper. Setting up six locations at the same time, that’s huge! The first  three machines have been installed. Work is in progress on the last three. And the Mirror  will hit the market by October. By then, we’ll have a minimum of four machines out of six  functioning. We’ll be printing about 120,000 copies a day, because each location prints  about 20,000 copies.

Again, has it not affected expansion plans for Energy, your oil & gas brand?
We have 200 stations that we have branded Energy.

But as has been observed by this magazine, not all the stations are functioning.
The issue of whether fuel stations are functioning or not has to do with supply.  Unfortunately, we’re not in control of that. NNPC supplies petroleum products to us. For 200  stations to be functioning every day, you need 100 trucks of fuel. If you have 50, it means  some stations will not function. At most of the stations, we sell a truck a day. The  Victoria Garden City station sells two trucks a day. So, if I have 20 of the VGC stations in  place, I’ll need 40 trucks to feed them every day. To move out 40 trucks from Apapa, if not  for Fashola now, would have been quite impossible. So, how do you go about it? That is the  reason why we stopped at 200. Otherwise we will probably be at 500 stations by now.  Otherwise, if you buy them there won’t be enough products. Sometimes we have only 20 trucks  a day, to share to 200 stations. They will exhaust that meagre supply before 12 p.m. and  close. Global Fleet’s dilemma is that of over-capacity building, against capacity  utilisation, which is good in business.

When are you declaring your governorship intention?
People have been misinterpreting issues. Yes, I joined the People’s Democratic Party, but  there are reasons why I joined it, apart from governorship ambition..The PDP, I believe, has  been able to run the economy via government. I’ve been in the opposition all through and  think I should, as a businessman, join the ruling party. That’s one. Also, some of my  colleagues, in government circles, present me to government as anti-establishment and very   pro-Buhari. They will say things like me giving N500mn and more to Buhari, as well as tell  other numerous lies against me. And these government people they are saying all these to are  human beings. They hear all these and form negative impressions against me. So, I had to  correct those impression. Now, with me firmly in the PDP, those controversies will be over.  No president or governor will believe you now if you go to them and fabricate lies against  me..The issue of any governorship ambition will depend on if the incumbent governor in Ondo  State performs well in serving the people. I have no reason to be in government if he  performs. If he doesn’t, I will do everything to ensure he leaves the place. He’s my friend,  but the more than three million people there desire government’s attention. They need good  roads, good hospitals and schools. So, if he performs, no problem. If he doesn’t, whatever  the ticket will cost me and the office, I will sacrifice.

Would you say he is performing now?
In fairness to him, I’ve not really assessed him. But the last time I went to Akure, I was  not impressed. The roads were bad. People are killed everyday on those roads. But then,   he’s just one and a half years old in office, so let’s give him time. Perhaps he is still  settling down.

Tags:  Air Nigeria, BARRISTER JIMOH IBRAHIM, Global Fleet Group