The Managing Director and CEO of Leading Edge Aviation Services Limited, Victor Mbachi, in this interview with Funmi Fabunmi, discusses challenges plaguing private charter firms in the aviation industry
What’s your assessment of the private jet charter market in Africa and Nigeria?
The private jet charter market is a huge one in Africa, but I’ll say to you that it’s still untapped so far. But I would say the charter business is still thriving, hovering around 50-60 percent capacity utilisation. Meanwhile, there is much that can still be done. Europe and other parts of the world are way ahead of Africa. To put it in context, out of the 60 percent charter markets in Africa, I would say that Nigeria only has about 20 percent of it. South Africa is leading while Kenya is running very hard to catch up and overtake Nigeria. But of course, one of the challenges we have is that we don’t have the enabling environment for private jet charter in Nigeria. So, the new minister has a lot of work to do. He has to give attention to business jets and private jet charter for us to be able to compete.
What do you think the minister can do to help this aspect of the aviation industry?
The minister is quite new. He needs to go back and look at the roadmap that was left by his predecessor and then, if there’s nothing for the private jet charter or for the business aviation part of the aviation industry, he needs to carve a niche for business aviation. That way, everybody gets a share of the pie, right? And that for me, I think, sits with the minister for him to be able to give a course for business aviation in Africa or in Nigeria, precisely.
Would you say economic downturn affected the private jet charter market?
Pre-COVID, I would say no. But post-COVID or during COVID, we had a lot of challenges. We had some upsides and downsides. During COVID, we discovered that we could do what is called passage sharing. Pre-COVID, people just would have to charter an airplane all alone by themselves.
But during COVID, we got to a point where passage charter now evolved. So, you pull about 10 people together to go to Abuja, you get everybody on the same airplane and they pay a fraction of the charter fees. Unfortunately, that fizzled out as soon as COVID left or post COVID. As soon as the system was open, a lot of people went back into their shell, flying all alone and trying to do their things.
That is an impact by COVID. Economically, there’s also been a lot of challenges with operators trying to source for spare parts, right? We don’t have a sustainable system where you get spare parts easily for repairs. That’s a downside and another area where the minister needs to look into.
A major concern is that business aviation has mainly been dominated by High Networth Individuals in Nigeria, which shouldn’t be. But now we see a few corporate organisations entering the space, because they have meetings at different locations and they can take advantage of it. But I hope that in the next few years the space will be opened for all.
You said something when you were speaking about spare parts. How daunting is this challenge and what is the real problem?
Well, the number one challenge is sourcing for parts. I’ll tell you there’s a wide gap between owing aircraft and maintaining it as it’s hard for maintenance companies to source for parts from outside Nigeria. Don’t forget, all these aircraft parts are not readily available in Nigeria. So, if your aircraft has a snag, for example, you would have to source for the parts from one of the OEMs or from one of the parts shops around the world. And then by the time you get it in, if the part is not coming into a free trade zone, you have to pay a huge cost to customs to be able to get your parts cleared.
So that way you have the aircraft sitting on ground and it’s not utilized for a long time until the parts arrives and maintenance is done.
What has made Leading Edge unique in its offering in the aircraft management and charter business?
Beautiful. So, I’ve been in aviation two decades already. The first decade I stayed more on the commercial side. I worked with Arik Air, Virgin Nigeria. I also worked with NAHCO and the likes. And then about 10 years ago, I moved into the business part of aviation where I started with EXECU-JETS as the pioneer head of operations.
And that opened me up to a lot of opportunities. Everything happening in leading in EXECU-JETS was pioneered by me. And that gave me an opportunity to see that there are more opportunities in the aviation business in Nigeria. Nine years after I joined EXECU-JETS, I decided to take a walk to start up Leading Edge Aviation because I saw more opportunities.
We had more opportunities to upscale business aviation in Nigeria. So, Leading Edge has come to stay. We started operations in October 2021, we’re barely two years old, but we’ve made so much traction. We’ve made a name for ourselves. Interestingly, in 2022, we won the private jet charter company award that was hosted by the Nigerian Aviation Award body. So we’re doing so much with the charter. We have corporate clients, we have individuals, and then we’re looking at exploring more in the markets of business aviation.
Do you think the cost of managing a private jet on behalf of your client has gone up?
I would say yes. There has been a lot of impact, particularly with the Forex. As soon as we had some challenges with the Forex and all that, everything went up. The cost of securing parts- if you have 2 million Naira to get a part and you have to convert it to USD or to any other currency to get a part, then you’ll be paying twice of that now.
However, that has not affected the charter rates in Nigeria, because most charter are done in USD. So you get to charter an aircraft in USD actually. Meanwhile, there are lots of challenges with exchange rates, which have impacted operational costs.
Increases in fuel prices, exchange rates have really affected the cost of managing airplanes in Nigeria.
What do you think the government can do to help the aircraft management and charter companies like you?
The private jet charter or the business aviation arm is majorly owned by individuals. When these aircrafts operate, there are a lot of factors within the Nigerian system that has its own positive side and downside. I’ll give you an example. When you bring in a foreign registered aircraft to operate within Nigeria, you pay more because the charges are higher because it’s not a Nigerian registered airplane. However, when the airplane owner decides to deregister to the Nigerian registration, then the charges are quite lower and you can have less expenses or less operating cost on the airplane. I think the government needs to look directly into the cost of aviation fuel to be able to help operators reduce the cost of aviation fuel and also airport facilities. There are no sustainable, no befitting facilities, so you find a private operator using the general aviation terminal, which is not befitting enough for a VVIP. There are a few FBOs, maybe 3 or 4 or 5 thereabouts in Lagos. In Abuja, they are very scanty, maybe 1 or 2 FBOs. But these business jets are mainly supposed to operate at an FBO. So, the government needs to look into that. Other locations do not have FBO.
In the aviation industry, safety is very key. So, I would want to ask, how would you describe the process your firm follows in ensuring safety and security for your passengers?
Like I’ve always said and it’s a principle for me in the last two decades. When you see something, you must say something. There’s a lot going on in the back end. People want to cut corners. People don’t want to do the right thing. People don’t want to follow procedure. So, number one is that every single person who is in the aviation industry or outside the aviation industry must say things the way they are. You don’t cut corners on maintenance logs. For example, if there’s an issue with the airplane, let the people know or do something about it before the aircraft flies the next time. This is my advice that when there’s an issue, when you see something, you must say it so that it can be rectified and corrected in due time.
Earlier when you were speaking, you said something about winning the best Charter company in Nigeria 2022 barely a year after you started. What did you do differently?
Well, we came with a different approach. Since there are competitors, you can’t do just what others are doing. No, we got into the system with a new strategy. Having worked with a lot of private jet owners and having worked with a lot of clients who need private jet services, we went back to the drawing board to harness what they really want, gave a little extra and we’re just at the front burner. So today, Leading Edge is one of the preferred private jet charter companies around. Pricing, services, from pick up to drop off and all the services you need, even on board, we give the very best.
