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Aero Contractors Airline: A premium brand in retreat?

Aero Contractors Airline: A premium brand in retreat?

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By DANIEL ETEGHE

It is still a surprise to many; and they are still left to wonder! That what was once a brand which, just like its business of flying, had soared to dizzying heights over the decades, had suddenly developed some fatal faults which made its wings begin to flap, the altitude began to drop; and like a scene from an horror film, the corporate eagle began to plummet; and now, it’s almost at ground zero! Aero Contractors Airline, hitherto a premium brand in Nigeria’s aviation sector is, today, a shadow of its old self in a corporate evolution that has lately assumed an undulating historical trajectory.

At inception in 1959 and for several decades after Aero Contractors carved a niche for itself and rose to stardom in Nigeria’s competitive aviation industry through high safety standards, reliability and exceptional customer-friendly services for all of which it was reputed. It thus did not take long before this airline shot itself to the leadership position in the industry.

Historically speaking, Aero Contractors was initially wholly owned by Schreiner Airways B.V. of the Netherlands. In 1973, however, it became a company with 40% Nigerian holding which rose to 60% in 1976; and in January 2004, Canadian Helicopter Corporation, CHC bought over Schreiner Airways and also acquired 40% holding in Aero Contractors while the majority 60% share holding remained with Nigeria’s Ibru family.

In service offering, the airline, over the years, metamorphosed from rendering air chartered services to church missionaries throughout the country and to the Niger Pools to transport betting coupons to Lagos, to offering diversified services to the then embryonic oil and gas industry by ferrying seismic crew in the Delta area of the River Niger; and later ventured into schedule operations both on the domestic and international schedule passengers services in 2000, flying to 13 destinations with its Boeing 737-400, Boeing 737-500 series and De Havilland Dash 8-Q200, De Havilland Dash 8-Q300, De Havilland Dash 8-Q400 aircraft, respectively.

For most of its first 50 years of operation in Nigeria, Aero Contractors was adjudged to be one of the best airlines flying in the Nigerian airspace, enjoying both recognition and patronage and attracting to itself much deserved accolade from both near and far. At some point, it was reputed to have not less than 18 aircraft in its fleet!

In all of those years, Aero Contractors was strongly consistent and was consistently strong on several brand building initiatives which helped to position the brand as a major player and to make it stand out. The airline was known, appreciated and celebrated for its affordability. It also kept faith with its slogan, ‘The reliable way to fly’.

At some point, it innovatively came up with very cheap online booking rates for passengers who could plan their trips and book ahead. Aero also engaged its passengers through promotional fares and giving away of free tickets to encourage current and prospective passengers to keep patronizing the airline. All of these were aside well planned and strategically executed advertising campaigns which made Aero to be almost second to none in its class. And, when it comes to Corporate Social Responsibility (CSR), Aero Helicopters has provided aviation and logistics support services to the Oil and Gas communities in Nigeria and the West Coast over the years.

Most importantly, in its over 50 years of operations, Aero Contractors has played a key role in the growth of the Oil & Gas sector of the Nigerian economy through its provision aviation transportation as well as championing the local content development policy with pro-active training of nationals as Aviation professionals like Aircraft Engineers, Technicians and Pilots.

Continuing its metamorphosis and historical trajectory, Aero Contractors Airline became wholly owned by the Ibru family on July 1, 2010. This is sequel to Canadian Helicopter Corporation, CHC’s sale of its interests in the airline to the highly regarded family. This development became a turning point for the company for the good as well as for the bad and for the ugly!

On the one hand, the airline became a wholly Nigerian owned company which, on the surface, was very exciting. But, beneath the surface, things seem to have taken a turn for the worse since that time. It is becoming more and more apparent that the fortunes of the company has nosedived and the airline has been oscillating from one crisis to another which, in turn, has negatively affected its ability to deliver seamless travel experiences to its customers. It is needless to say that the brand equity of the carrier has emaciated over the recent years.

Things got so bad that the Asset Management Company of Nigeria, AMCON had to take Aero Contractors over on February 5, 2016. Since the take-over, two leading aviation unions, the Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) and the National Union of Air Transport Employees (NUATE) have, in a document submitted to the Asset Management Corporation of Nigeria (AMCON), pointed accusing fingers at the proprietors, the Ibru family, as having contributed in no small measure to the deplorable condition of the airline and its declining fortunes.

Among other things, the unions alleged that Oceanic Capital, a consultant to the airline acquired seven planes in which only six were delivered and then were leased back to Aero Contractors Airline through Oceanic Leasing Company at $12million each. The unions claimed that rather than the $12million claimed by Oceanic Capital, the website of Arizona, the firm from which the aircraft were acquired put the price for the purchase at $4million each.

Despite AMCON’s take-over and injection of a total N20billion, the airline has still been going through financial difficulties.

Also, Aero Contractors that was once respected for its on-time departure started having delays and cancellations of its flights thereby disappointing the traveling public most of whom lost their various appointments because of the airline’s inability to deliver qualitative services to them at the right time.

Up till now, the asset management company has been having a running battle with workers of Aero Contractors and the unions over its planned sack of workers which has lately been effected. According to AMCON since the reduction of the airline’s fleet to three, it was necessary to reduce the workforce in line with the number of aircraft available.

Earlier, President of ATSSSAN, Comrade Benjamin Okewu, said that the union was negotiating redundancy with the airline because of the number of its aircraft which had reduced and most of them had gone for C and D checks. Okewu alleged that the airline did not have the forex to bring back some of its aircraft.

Aero Contractors had been worst hit in 2013 and 2016 when the airline was forced to ground its flight operations across the country and on its international routes.

In March 2013, industrial action grounded flights for 18 days, in a dispute over outsourcing and reduction in staff strength. The strike, which held from 13–28 March, grounded Aero’s active fleet of (then) nine aircraft, and was reported to have cost the airline at least N10billion in ticket sales.

In September 1, 2016 Aero Contractors suspended its flight operations again claiming that it was forced to ground its operations because of the harsh economic conditions in the country. According to the company, the decision was as a result of the current economic situation in the country, which has equally affected other airlines, some of whom had suspended operations or pulled out of Nigeria.

But since its resumption of both domestic and international operations, Aero Contractors has been finding it hard to bounce back to those glorious days when it was the preferred airline in the country.

Speaking on why Aero Contractors is regarded as a failing brand in the aviation industry, General Secretary, National Association of Aircraft Pilots and Engineers (NAAPE), Comrade Ocheme Aba, said that the failure of Aero Contractors Airline was due to lack of corporate governance on the part of the management of the airline.

Aba further stressed that since AMCON took over the airline, it had refused to invest in it, noting that all that Aero Contractors needs right now is money to keep it up in the sky.

He said: “My personal analysis is that they suffered from poor corporate governance. Once the original owners left and the Ibru family took it over, the airline went overboard and I think that was the beginning of the problems that the airline has found itself. So in one phrase the problem of Aero Contractors is lack of corporate governance.”

“On the N20 billion that AMCON had invested, it was done when they were playing hide and seek with everybody but since they took it over, they have not invested and they have refused to invest but without investment, there is no magic that you can do to turn Aero around because it just needs capital, if you put in money there, Aero will be up in the sky.”Aba noted.

A passenger, Mr. James Orupe who spoke about Aero Contractors airline said that the airline was currently trying to find its bearing in the aviation industry.

Orupe noted that he was a regular flyer, stressing that he had flown with Aero Contractors on several occasions adding that in recent times, the airline is grappling with some issues which have made it difficult for them to compete favorably with other airlines.

He said: “Aero Contractors Airline is trying to find its bearing in the aviation industry at the moment and in terms of competition, I think it may be difficult for them to compete favorably at the moment”

“We all know Aero Contractors Airline in those days but over the years the airline started having incessant delays and cancellations of its flights coupled with some of the myriad of issues affecting the airline that we read in newspapers”, Orupe added.

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