There is no smarter way to go into a new market other than by working with and through experienced and trustworthy local partners. When NEXUS expanded its operations into India and Africa, this was the approach. The results have been excellent, as NEXUS President & CEO Abdullah Al-Sayed explains.
Q: What were the reasons for setting up an office in Africa in general, and Rwanda in particular?
A: We prepared for our launch into Africa for over a year before we commenced operations in Kigali, the capital city of Rwanda. Africa was exciting to us because it has such huge potential for business aviation and the continent’s economies have been averaging around 5% GDP growth year on year. What is particularly attractive about Rwanda is the order, neatness, enthusiasm and discipline that one sees throughout the country. The government of Rwanda under President Paul Kagame, who has been leading the country since 2000, has a bold vision to make Rwanda the premier focal hub at the high-end segment of the African aviation industry. In fact Kagame’s vision, and the way he has been running the country, looks much like the model established by Dubai, drawing on Rwanda’s excellent geographic location and political stability to drive above average economic growth for Rwanda and the surrounding region.
In fact Rwanda is playing a leading role in a very encouraging move that will see seven or eight countries coming together in something akin to the model provided by the Gulf States, where a business and trade friendly environment encourages and stimulated economic growth across borders. This will have very exciting implications for business aviation in Africa and it was clearly important for NEXUS to establish an early presence. We also saw a clear opportunity in Rwanda to reach out to the smaller African airlines to offer them world class flight support and flight support systems that would be well beyond their means to establish internally, and to do so at a price that would make economic sense to them.
The point here is that we are not just bringing NEXUS’s proven expertise in flight operations support, but also state of the art IT systems. One of our clients, an African commercial airline today runs off the same type of system used by the largest commercial airline in the world, a fleet many times the size of a low cost carrier. Usually a system like that would only be affordable by the largest commercial carriers but we were able to get them established on it and to provide them with a complete outsourced flight support service, including crew scheduling, safety and flight planning, particularly when they are either chartering an aircraft to a destination with which they are not flying regularly to or if an aircraft is diverted to an unfamiliar airport.
Q: The general view is that business aviation services across Africa are still very much in the developmental stage. How do you cope with the absence of FBOs at many major airports including Kigali Airport?
A: First, it must be said that although Rwanda’s major airport at Kigali does not have an FBO, it is going through a very large expansion over the next few years. We are in discussions with the Rwandan civil aviation authorities about the need to establish an FBO there and we are getting a very favourable hearing from them. This is not something we would do ourselves but we would look to find a very good, proven partner. I must say that I was very impressed with the number of private jets coming in to Rwanda, both government VVIP jets and private jets. My goal is to make Rwanda the perfect stopover for business aircraft flying either way from North to South. Rwanda’s location and its general prosperity make this a great place for aircraft to refuel.
Q: A number of large multinationals have come unstuck working with and through local partners, who have used the newcomer’s expertise then gone off and launched their own competing operation. How do you counter this?
A: It is very true and we have seen it again and again in the Middle East and in Asia as well as Africa, where the local partner will tell the multinational, thanks very much, you’ve done a great job but we’re fine now and you can take the next plane out. We have also seen the opposite approach, where big name players come in from Europe and the US and think that they can do it all on their own, only to fail dismally because they do not understand the local regulations, culture and the different local nuances in the approach to doing business. Our strategy outside the Middle East is very definitely to work with local partners, but we are not trying to do this in a small way. Our strategy is to go in and establish relationships with a local partner with a proven track record in fields other than business aviation. We deliberately do not want to partner with a company that thinks it knows business aviation. The last thing we want is someone who has an established way of doing things and will turn round and say, thanks but I’d rather do things my way! We choose a partner with no business aviation experience but that believes in our products. We have our own proven approach to flight operations support and we do a great deal to bring our chosen partner up to speed in our philosophy, processes and approach. What is equally important is that we always ensure that we take a majority shareholding in the new business so that we control the operation. We, as NEXUS, are not a strategic alliance for the new partner, we are majority shareholders in their business.
The clearest expression of the value of this local approach came from a customer of mine in India. He told me, “The reason I love your company is that you brought a very high international standard into my country and trained local people to implement it. Plus you established your operations in my time zone so I do not need to wait until America or Europe wakes up if I have an issue. I can go straight to your office and get help or talk it through immediately.” That is exactly what we are seeking to achieve.
Q: How is the India operation faring?
A: India is going very well indeed. We started thinking about opening up operations in India several years ago and we started looking in earnest in early 2012. India is the ninth largest civil aviation market in the world, with 136 airports. Its domestic air traffic has quadrupled over the last ten years, putting India in fourth position world-wide in terms of passenger volume. By 2025 India is poised to become the third largest aviation market, just behind the US and China. We selected the Sovika Group as our partner for the Indian venture. They are the leaders in ground support services in a number of major international airports. Through them we have been able to expand our services across the whole of India and into many neighbouring regions and we are seeing incremental growth, quarter on quarter. Services provided include trip planning, flight dispatch services, crew and aircraft scheduling, security services, aircraft maintenance management and world-wide concierge services – all provided at a level never seen before in this market.
Q: Obviously you put a great deal of emphasis on the quality of the training given to your staff around the world to achieve a consistently high level of customer service, but how do you prevent local habits, as it were, taking over and standards softening?
A: The level of service experienced by business aviation customers in India, before NEXUS arrived was for the most part less than satisfactory. If you phoned up to see if a fuel truck would be there when the plane landed you would be told, “Yes, certainly,” and the client could still spend two hours on the ground waiting for the fuel to arrive. Our focus in India has been very much on the VIP market. There is little equivalent niche opportunity there, as there is in Africa, to add smaller low cost carriers to our client list. But as far as the VIP market is concerned for business aviation, NEXUS has a tremendous edge there. We are in a unique position in India, where we are the only operator available in every single major airport in India with our own staff on hand to meet and greet business aviation travellers. Our local staff member will make sure, for example that all the fees are paid on behalf of the customer, that fuel suppliers are on time, as are the catering and cleaning services. They take care of all the transportation requirements for the passengers and crew, so that no one is left waiting. We call our local airport staff VIP Representatives, and we have them in every region, including Africa and India.
Q: That must add substantially to your global payroll bill?
A: It is a hit on payroll, certainly. But it is also very flexible. If we are not generating enough movements to a particular airport we can always move that representative to a more fruitful location. Plus, as I said, it gives us an unmatched capability to be able to have a high confidence that we are delivering services to the highest standards, which, of course, goes directly to sustaining our reputation around the world. Our people literally are the key to our success.
Q: How do you choose which airports you need to have permanently staffed?
A: We are constantly looking to identify the destinations that are important to business aviation travellers from a variety of regions, such as the Middle East, China, Africa and Europe. One of our biggest sources of information on this is our customer base. They come to us and say we plan to travel more regularly to this or that place and we have difficulties when we go there, can you help us? That gives us a tremendous wealth of data to see where the major airports are that we need to position our own VIP reps.
Q: What was NEXUS’s interest in acquiring Wyvern?
A: As a safety audit specialist company, Wyvern serves a huge need in the business aviation sector. There is just not enough manpower resource in the various national civil aviation and regulatory bodies to do all the safety audits on aircraft that customers need. If you are flying charter, how do you know that the operator is in compliance with all the safety regulations and that the aircraft is properly maintained? A third party, independent audit gives you this surely. This is Wyvern’s importance, in a nutshell. As an organisation NEXUS places the highest emphasis and importance on ensuring all aspects of safety. Our ambition is always to develop a proactive and positive safety culture with a strong focus on all the safety issues affecting our business. So we have much in common with Wyvern’s approach and in joining our stable of globally recognised aviation firms, Wyvern further strengthens our commitment to putting safety at the heart of our operations, as well as strengthening our ability to provide essential, cutting edge services to our clients.
Safety audits have become even more important post the 2008 crisis. What happened through the crisis and its aftermath was that companies across the industry came under significant pressure to cut costs and one of the areas that people were tempted to cut was maintenance and upkeep on aircraft. The statistics since the 2008 financial crash show that there has been an increase in incidents, which is what you would expect if people are cutting back on maintenance. So again, a thorough safety audit, that is uncompromising and where the client cannot come to a cosy agreement with the auditor to skirt round a difficult issue, is of great value to both the industry and to customers. What we saw with Wyvern was the opportunity to help strengthen it substantially by putting in place a world-class management team to advise the company and to ensure that its reputation for the highest standards of professionalism in carrying out audits, is undimmed. NEXUS was able to help Wyvern attract world class management talent to its new Board. Vincent Santulli, former Chairman and CEO of NetJets Europe and Netjets Middle East, Shawn Vick has held leadership positions at OEMs such as British Aerospace, Gulfstream and Hawker Beechcraft while Nicholas Sabatini was formerly at the highest leadership level at the FAA and understands the regulator’s perspective from the inside. These three gentlemen bring a huge depth of experience to Wyvern that will stand it in very good stead.
Our aim is to take Wyvern from being a US centric company and turn it into a global business, while retaining its headquarters in Pennsylvania. As NEXUS with a world-wide operation, we can open up a lot of opportunities for Wyvern around the world and at the same time, we are benefitting emerging market communities by bringing such a tremendous brand from the US to raise local standards of safety and operational excellence.