This is the first time you are visiting Africa, specifically Nigeria. What is your mission?
The first and most important thing to me is to make sure that the bedrock of excellent customer service, safety and security, is at the heart of everything that we do. So, before we talk about the mission of moving forward, we really have to make sure that we work on those key elements. In the future, even though we know that we operate in a very difficult environment, I believe that the African continent offers a great opportunity for growth. Even though the growth might not be as fast as we expect, the continent still remains the engine of growth. My plan is to offer more frequency on Lagos-London flights. I think the African continent offers a real engine of growth. If we can join businesses together round the world; if we can bring investors here; if we can bring goods and services here and take goods and services away to sell in other markets and also join friends and families together round the globe, then we would be achieving a lot. These are chief, among the strong things we want to see and develop in Africa .
There is a partnership between the British Airways and the United Nations Children Fund. How much of this fund do you intend to invest in Africa, in general, and Nigeria in particular?
I do not have the details or the total amount that would be invested in Nigeria right now at my fingertips.
But if you talk about Nigeria, £26m had been budgeted and already collected under the Change For Good Programme since 1994. Today, we are really lucky enough to announce the sum of £220,000 that would be used to buy insect-repelling malaria nets that are specifically targeting children under five years and pregnant mothers. It is always alarming to hear that for all under-five deaths, 40 per cent of them are malaria related. This is one area we want to assist through the Change for Good programme
Looking at the global economic recession, what plan do you have to sustain the market in Nigeria or simply put: what is the future of British Airways in Nigeria?
We have a strong foot in Africa. The Africa market is important to us. There is a recession, which does affect passenger numbers, and Nigeria is not being unaffected. What we have done is to introduce promotional fares to encourage passengers to fly. We have slashed fares for first class. You can pay one way in first class. We have two in one fare in business class and we have special fare of £599 in economy class to encourage passengers to fly.
Have you experienced a drop in passenger volume in your African operations?
Yes, there is a drop in Africa.
Can you bring that down to percentage level?
We don‘t give away such secrets about passenger drop in our operations.
You do two flights into Nigeria everyday. In what other countries do you do more than two flights and what type of aircraft do you use?
We operate three flights to South Africa a day. Nigeria is one of the few countries in Africa that have more than a daily flight. South Africa and Nigeria are where we have more than a daily flight.
The airline industry globally is going through economic downturn. How specifically has it been affecting the British Airways?
I think there is no question about the fact that there is a global economic downturn. I think it is the more significant economic downturn that we have ever witnessed in the airline industry. There has been a lot of highs and a lot of lows but this is the most significant downturn that the industry has ever witnessed. It is a combination of factors: a number of key economies, like the United States, are in recession. The United Kingdom is in recession and Europe is in it. However, we still got economic growth in some areas. For instance, China is growing, India is growing, Africa is growing; but the rate of growth has slowed down quite a lot. Then, if you look at some of the major economies they have very weak consumer confidence, definitely consumer confidence in the UK is at its lowest. The same applies to the US. We have a banking system that is not working at the moment. It is particularly very difficult in the airline industry. What happened to the downturn in the airline industry has to do with very high oil prices and we have volatile currencies – the pound has weakened significantly against the dollar and Euro – all these factors combined to make it very challenging at the moment.
Interestingly, the rate of decline in British Airways is less than the industry average if you look at the International Air Transport Association figures. IATA is looking at figures globally that are worse than that of British Airways and I think that is early indication of how low passenger turn out is hitting global carriers. There is low premium travel in the Trans Pacific and premium travel within Asia. I think a lot of people saw this as being caused by UK, US situation. However, in terms of air travel, Asia is probably the target. That is where it really shows that it is a global issue. So it is going to be a challenging year, although we have got a very sound financial position going into it and that helped. Fortunately we have put secured financing in place for all the new aircraft we have ordered. That is already financed and probably makes British Airways unique in the world of aviation. A lot of airlines today will find it challenging financing new aircraft. I think we are in a sound position but we have to look at ways to improve our performance, and that is exactly what we need to do. We are very confident that we know what we are going to do and we know that we will do what is necessary to make sure that British Airways is one of the airlines that will not only survive this period but actually come out to make its position stronger in the industry.
How many aircraft do you have and why is it that you deploy old aircraft to Nigeria?
That is untrue. The aircraft we deploy to Nigeria are very sound aircraft that we deploy to our other destinations, including US cities. The aircraft that came from Abuja this morning is going to Brussels. It is the same aircraft. We don‘t differentiate at that. I don‘t know where that rumour started from. We don‘t differentiate and dedicate our aircraft. We integrate all our aircraft. Among our long haul aircraft, which fly to Nigeria, we have 57 Boeing 747-400 and we have 42 Boeing 777-200 aircraft and they fly our long haul network. The aircraft that flew in from Lagos this morning is scheduled to go to Mumbai this afternoon. The aircraft that operated from Abuja yesterday flew in from Tel-Aviv. Aircraft integration in this issue is so complex that it will be impossible to dedicate one aircraft on one route. So, the aircraft you see in Nigeria is the aircraft you will see in all the world cities. That is the way we operate. British Airways has been operating to Nigeria for over 70 years before any of you were born, I believe 70 years from now, when other people will be flying British Airways, the airline will still be coming to Nigeria. It is a very important market and we believe we operate a very competitive service to Nigeria. It is a market that we are absolutely committed to and we understand how competitive that market is; how competitive it has been in the past and how competitive it is today and how it will be in the future. To show we are committed to Nigeria we have been there during good time and we have been there during bad times. And we will be there flying Heathrow- Lagos and Abuja. We have had cause in the past to increase our flights to Nigeria. We will like to increase our frequency but we are, as a commercial airline (fully commercial), we would only succeed if our customers are satisfied with our service. And I believe we offer very good service because we are airline that have a world of customers. We fly to all parts of the world because we are a global premium airline and Nigeria is a key part of the global market.
You had a problem with your aircraft, which forced it to land in Kano from Abuja, on its way to London. The incident prompted Nigerian government to query you. What really happened?
That is part of the allegation- that we use different aircraft to fly to Nigeria, which is untrue. It is easy for people to say this. The fact is that British Airways has very strong business in Nigeria. A lot of people fly British Airways and they keep coming back. I think we do that because we offer good service. When we look at serving Nigeria and operating from Nigeria to London, it is like serving our global network. So, we look at how we integrate our aircraft so that flights from Abuja and Lagos can connect to other services that we have because a lot of the people that we fly from Nigeria are not just flying to London, but flying to connect to other networks. Therefore, we have got to make sure that the aircraft arrive a time that is suitable to connect to other destinations. It is very complex and I think you‘ve got the opportunity to see how complex Heathrow is and we gave you the reasons of why we do what we do.
Has the current economic recession forced you to withdraw your acquisition order from aircraft manufacturers?
It is quite the opposite. In September 2007, we secured finance for all the aircraft that we ordered. So, we are going to take delivery of all those aircraft. In 2009, we are going to take four triple 7-200- the first one will actually get delivered next week (this week). In 2010, we will take six triple 7-300; in 2011 we have no scheduled delivery. We were due to take eight Boeing 787 in 2011 but that programme has been delayed. Those aircraft will be delivered to us in 2012. In 2012, we will get the delivery of eight Boeing 787 and four Airbus A380 and then in 2013 another eight Boeing 787 and another four A380s.
What is BA‘s strategy for coming out of this economic recession? Any prediction on when the recession will be over in the airline industry?
The strategy is simple. We are a premium airline and we will continue to be a premium airline. We have a global network and we will continue to maintain that global network. We hope we will be able to strengthen that global network, but it is going to be a tough environment. Economic conditions, we believe, will remain difficult until 2011. So, we are planning that we are going to have weak economic environment in current 2009 and 2010. The US economy will begin to recover, maybe, midway 2010. UK economy will follow in about six months so that by 2011, we‘ll get back into economic growth. It is going to be tough in the next two years.
Two years ago, China said it was going to order 200 aircraft- which was a very ambitious order. These aircraft will need pilots, requiring China poaching from other airlines. Has China been requesting to offer jobs to your pilots?
This issue has been discussed in IATA. It was one of the concerns raised at the IATA Annual General Meeting that Middle East airlines and China, from the rate they are growing, will have to quickly train people – pilots, engineers, people that work in IT. Some were saying that this was putting them in a significant disadvantage. But things have just slowed down, even in the Middle East. What we have seen is that there are people who retire early from British Airways and take a pension and then go on to work for another airline. Apart from that, we have not seen much of that, at this point, other airlines coming to British Airways to take people. It is a big issue and I know that some small airlines at IATA AGM were very concerned about this. It makes the situation more competitive.
