Episode 6 - Challenges and Opportunities in Aviation
Nadia: Welcome to another episode from the edition of Insights moved to Ghana, we're together with my co-host, Dr Robert Lepre, and also a colleague from Weave Consulting, and our resident guest. Mr. Christopher Busuttil-Delbridge, who is the Managing Director of Evolve limited in Malta, and our esteemed guests today, Mr. Edward Annan the CEO and founder of Passion Air, as well as Mr. Daniel Galea, the VP of operations of SR Technics, where we are going to discuss the subject and the industry of aviation.
Welcome, Mr. Edward. Welcome. Mr. Daniel, thank you for joining us today.
Edward: Thank you for asking us to join you.
Nadia: So obviously, we all know when we read and we continue reading the difficulties that the aviation industry is currently facing from the outset of the pandemic, even though there is agreed willingness for people to travel to meet each other to do business, across countries and across borders. Definitely, there are challenges and the challenges are related to the covid-19 pandemic primarily. So perhaps starting off by introducing yourself first. And then also sharing with your audience the challenges that you're currently facing within your respective industries or countries. Mr. Edward, would you like to start?
Edward: Yes, the name is Edward Annan, Accountable Manager for Passion Air. The difficulties the protocols put in place to more or less to prevent death this during this period, has brought, of course hardship on the passengers that we have. For example, one of the routes, we're doing a five rotation a day. And now we're doing three rotation. But before this time, we're doing just one after the three weeks four weeks, lockdown, we're doing just one a day, and you could have as many passengers or as little passengers as nine, which isn't even enough to buy the fuel for the sector.
But we had to do it to more or less to give the public assures the airline industry was so useful for their travels. Now we've gone through the most part of the hardship, now we are doing five rotation to this particular destination, which is Kumasi, the main revenue sector. But we are still not having the number of passengers than we should have. And it's purely because of the fear of the people not be sure of whether or not they could still get the disease if they go on the aircraft. But we've taken all the protocols we spray each sector on the whole aircraft. We take care of the individuals in the mask, give them sanitizers all the protocols being adhered to. And gradually we see a little bit of increase few times you see a full flight but most times around the 20 to 30 flights.
Having said that, looking in the future, yes give them assurance to be able to go on the flight as one, but we have to look for new areas where we can fill the gap that we're losing in the passenger area. So we're looking at the cargo area. For example, we've signed agreement with World Food Program to send a cargo from Accra to 10 other destinations in Africa, mostly West Africa, once we started, we have the contract at the end of the year.
And the reason why they couldn't put us on the biggest scale is because they haven't done the audit that they need to do they wanted to do a physical audit, but as things are going I think they are shifting towards doing a visual audit. So when that is done, we can even bid for 10 tenders that is not necessarily within Africa. So we are looking at the area.
We also looking at charters to other African, West African countries that they are not able to really activate the airline industry like Cameroon, we are doing three months away at least, charter for Cameroon airlines. We are looking at the postal service in Ghana and carrying the goods from here to the destinations that we fly into. The government is open at third another airline airport which is some way in the centre of Ghana's Yani where the mining industries so we're hoping to start that also in in October mid-October so we are trying to look at other areas other than normal, traditional areas that we do so far.
Yesterday we had a very good discussion with an airline in the Middle East who wants to come and join with us sorry not Middle East, UAE wants to join up with us to do the regional and international. So this pandemic in as bad as it is, it's also given us the opportunity to look other areas for survival.
Nadia: And of course collaboration is key in this in this case and indeed for innovation industry for an airline to look for cargo opportunities for instance unfortunately, a good opportunity.
Mr. Daniel Galea a different operation as our techniques mostly focused if I'm not mistaken on MROs, what is the effect of the pandemic because obviously since there are there's limited travelling, and limited flights the amount of maintenance required and even the operations obviously is definitely less. So how you are already started leaks or in general you think that the pandemic is affecting the aviation industry?
Daniel: First of all, thank you for the invitation as well. Yes, going into the challenges I would say they have been tremendous, I mean, since the start of the COVID. In general, we estimate, we estimated that around April in May, around two thirds of the whole fleet worldwide fleet was grounded. So as you can imagine, that means most of their maintenance requirements would have been postponed or parked for the minute you know and then as well you have the other challenge that other models competitors as will be looking to take the remaining work you know that's available. Meaning that the fleets they are still practically flying. Some other challenges that we've encountered as well during the whole crisis I should say was the supply chain. Some of the suppliers were the ones providing parts and material and other related logistics matters, were effectively working on reduced hours were not sometimes available and communication was a bit [unintelligible].
Other than that as well, since there have been a reduction of flights into Malta in general as well, having the shipment reaching the islands was also another challenge. So yes, we have to keep up in finishing the maintenance and doing the activity but at the same time, the factor of having the material ordered that I had was one of the main let's say important factors at that point in time.
I would agree with what was mentioned earlier as well basically communication was an is key. We have to speak to our customers to tell them that we are in that we are here basically for them as well and discuss how we can work together in a month of which. Whereas before summer used to be out of bounds because there was more flying due to tourism industry for one. Basically we've agreed with them, let's carry on doing maintenance into the summer and remodel ourselves so that we ensure continuation and coverage so that was one actually important thing.
The other thing that is key as well and this whole thing is ensuring safety to our own employees as well. Some of them of course were worried you know, the situation is worrying I mean not going to shy away from that. But we've still got as well some measurements into place some that are or rather can work from home and has been encouraged to actually do so. Others we've fumigated and disinfected the aircraft before it is docked into the hangar. So there are those are some of the many other things we actually did
Roberta: A lot of these disruption.
Chris: And it is fascinating to hear the two, the two angles as well Roberta. From a founder and entrepreneur to an operational mind-set, though someone is looking at different opportunities in networking and creating other things and diversifying and cargo and, and Mr. Galea here is explaining exactly, you know how he went about tackling the whole situation.
So I think that if this teaches us anything, it is that different skill sets are required coming together as a team, it makes us much stronger, much more resilient than ever before. And this is true of any industry. Well done to both.
Nadia: Indeed, this is an interesting discussion, Chris, because I think there is the need of more of multidisciplinary teams, even though, obviously, especially within the aviation industry, specialization, and technical skill set is paramount, and this of utmost importance when it comes to engineering and specific skill set. But I think still done within the management side, and from a certain point onwards, having different people and having different skills coming together to try and find solutions, because obviously, the resilience of the industry is being tested. Do you see that happening? Mr. Daniel, in your case?
Daniel: Yes, absolutely. Absolutely. And in fact, one of the measures when we did was, let's say, to establish a committee from different sectors, or different areas, let's say of expertise, and we really deep dived into the problem and try to ensure that every corner is somewhat covered. That was very much tricky.
Nadia: Mr. Edward Annan, was it the case? In the case of Passion Air?
Edward: Yes, yes, we did the same, we had a team together a committee that, first of all, show the safety of the staff first. And then of course, the safety of the passengers. And each of them came with their 10 cents, and we put all together and it went very beautifully. In fact, to date, with not had not one person, we’ve not had any case, out of the whole 300 staff not apply for one person, no case at all, actually, that that went very well. And there was a lot of cooperation with the staff.
Roberta: In the light of all the reduction and all these challenges, what would you say are the prospects now for the industry going forward? Because I don't know, in the sense that the measures that have been put into place, are they mitigation measures to address the current situation, or will they redefine the prospect of being for the future.
Edward: The protocols are going to be kept as long as the State wants us to keep it, and I believe that it will go for a long time. So we’re doing that, but as I said earlier on, we're looking at other areas, and we've actually been successful in getting some contracts in some of the areas we are looking at. So the prospect is there, just that we don't want to neglect the original view of taking passengers from one point to the other point, you know. I believe it would take quite some time before they are all relaxed and get the full load that we're getting before. But we have to assure them that they are safe in coming to aircraft. And of course, as I said, we also get some new areas to get the last revenue from that line into the system, otherwise, we'll be in trouble.
And probably its good now, we wouldn’t have probably looked at cargo, if everything was going well. We're looking at consolidating the domestic flights, and then go start with the original. Now, instead of going to the original, we are doing the cargo, which is looking pretty good. You know. And hopefully we can continue with that. And the other part of it is also getting together with a far bigger airline to join up with us to look at future. So it's not too bad.
Roberta: And once again, this theme of collaboration has been an emerging theme in our various episodes of Insights. And it looks like going forward is going to be key in ensuring survival and success of businesses going forward. I think it’s coming in again,
Chris: Yes, definitely. I am very passionate about collaboration in the company, the country. I love what is being done by Passion Air looking into cargo, looking at the opportunity rather than you know what is happening, but I think we must take in that most of what is happening is actually driven by emotion. Because if people weren’t so fearful then they would travel, for business and for leisure, and obviously the, the aviation industry wouldn't be in this position.
So one thing that I would like to share as a business traveller is the time travelled only a few weeks ago, out of necessity, and it was a 24 hour travel, it was quite far away. And I think airports and the airline, the airplanes was the safest place I ever felt. And I have to say that because it was surprising. When you think of it, it's not. Airports and airlines are places where people are highly trained, they're highly regulated, and the safety of the passengers is paramount. Nowhere else will you go, where you're treated, and your safety is as important to this stuff as that place. So I have absolutely no reservations. So travel again, whenever I need using an airline. And I say this to maybe encourage some people who are sitting on the fence. Now everyone reacts differently. I understand. And all destinations are different. But my personal experience traveling with two different airlines, I was always very well taken care of. And I think people are taking airports are taking necessary measures. And so I felt extremely safe. And I don't know, let's look at history. Six months. Did you hear of anything? Maybe I missed something that a full plane load of people or someone got infected from a plane? It hasn't made the news in my world yet, but maybe it has. I haven't heard of it yet. From parties, yes. From other places, but not from a plane, as far as I can remember. So maybe the fares…
Nadia: It's the adaptation as well Chris Yes.
Chris: It is high time to start looking at things more pragmatically, rather than only emotionally.
Roberta: I think also, picking up on what has been mentioned earlier, the issue of ensuring the safety also of the staff, I think that is also key in terms of missing a sense of reassurance, ultimately to the client, because there's, you know, there's that sense of, of safeguarding that is transmitted, whether intentionally or otherwise?
Edward: Yes, you're right. I mean, the staff is the backbone of the whole operation. Without them, there's nothing to do. So we need to take their safety first. And of course, put protocols in place that they will follow and stay safe. And that also give assurance to the passengers. And they get to know how safe the staff are, and then from their own personnel onto the passengers, they feel far better than otherwise.
Nadia: Do you see any other success stories, perhaps from other industry players within your field, that that have taken advantage of the situation and seen an opportunity out of challenge? Is there something which you would like to share with us if there's any, because definitely speak about collaborations and indeed, collaborations will be required. We need to find the strengths of between parties, and collaborate with our staff, we collaborate with our customers, with our suppliers and with potential other investors as well. But what are, the there is definitely a challenge to that? How do we choose the best collaborators? So what are your views on this?
Edward: What I see more is people who are good with IT, you know. People who are good in that area. They are making a big wave. Possibly, possibly, it might even reduce masses of people traveling the future. Because if you can have meetings and special meetings on system like Zoom or whatever you call them, why would you want to travel? I was traveling almost every other week.
So there is opportunity for anything that happens in this world, there's opportunity that you can take out of it. You know, and a lot of are taking opportunity in that area to develop IT systems that one can be at different places and get together at the same time and you know, have fun and also business. So I'm not too sure whether we'll go back to the number of passengers we used to see before this year. I think traditional people that conservative people might want to go back if the time is right. But the youth are more looking at doing business and having fun on the on the laptop instead of traveling. So the business opportunities come, but I'm not too sure whether they can bring us physically together as human beings in the world, you know. That is yet to be determined in the future.
Nadia: Most people are very sceptical, Chris and Mr. Edwards indeed regarding of going back together and meeting physically in the same space.
Chris: I simply cannot wait.
Nadia: Indeed, indeed, indeed. Mr. Daniel Galea.
Daniel: I'd like to mention earlier on the question was about the market expectation basically, we have to assume, or rather, you know, look, look how the future will look like. And based on the current analysis, to get back to the 2019, let's say pre-2019 loads, we are looking at best case scenario 2023. And the worst case scenario will be 2025. Now, everything can change, again, depending on whether vaccines will be produced earlier. But I don't think people are going to rush into booking holidays as they were before until everything is pretty much settled.
You know, if aviation is part of the tourism, let's say functionality or sector. So, the hit on us is immediate, and the rest of the economy will follow eventually, you know. Hopefully, it will not become or rather it will not turn out to be that bad at the end of the day, but in the commercial world, we are not assuming the 2019 loads up before 2023.
Now, opportunities as such, there are various for example, again, in case communication, discussing with the customer, how we can the operator like from what we're hearing from Edward basically is discussing with them, how can we help them? You know, most of the meetings are now being done online, certain quality audits are being done online as well. And I think it unleashed also, it's like also a paradigm shift, I would call it that. Now, certain level of inspections and even quality inspections are being done online, let's say audits, for example. I mean, the aircraft obviously, physically there's no way, and it’s so much highly regulated. And as mentioned earlier on its training is vast. And there is no way we can get away from that all the traditional, let's say maintenance hands on has to stay.
And some other opportunities that I've let's say personally nothing to do with the market I am currently and I noticed as well that the business industry like the business jets picked up quite some volume as well. Possibly they learned as well to adopt that business model and created pools of let's say, transportations for certain entities and companies, for example, rather than traditionally going on to and by dedicate yourself, as we all know, how that's been done. They chartered the full aircraft, for example, to meet the businessman, so possibly as there are opportunities, but it's very much difficult to move away from the traditional concept. Let's put it this way.
Nadia: Of course, I appreciate and I emphasize Mr. Galea. It's definitely not an easy task by all means, but the definitely when you are faced with an unprecedented event such as such as the COVID-19, when the pandemic where there are no trends, basically, we are still recording those trends and how it's going to evolve. So it's not something which we can really predict.
Definitely, obviously there are definitely different schools of thought as well that some people are really leaving behind 2019 numbers and just looking forward And basically predicting or forecasting new numbers, now. New numbers with new business models, because as you mentioned, since there has been a paradigm shift, basically, the business model is changing completely, then even the numbers and the financial analysis and the under plans would need to be substantiated with different assumptions and different scenarios. So, thank you for sharing that with us. Sorry, Roberto, you were saying
Roberta: This is interesting, even from a sustainability point of view, because there will have been those who argue that this is what the 2019 numbers were not sustainable in the first place. So perhaps, this was the push we needed to, you know, put thinking caps on and reassess the whole scenario. I understand things difficult and painful, but I really would like to applaud as well, to get for having been able to come up with solutions, even, you know, within the context of these enormous pressures.
Nadia: Indeed, what we've seen as well, both from the Passion Air side, as well as our SR Technics, even though there are different operations, there are similarities as well, both in terms of the difficulties but also in terms of opportunities that they're looking into from Malta as well as from Ghana.
So thank you for sharing these interesting insights with us. Thank you for accepting our invitation, Mr. Edward Annan and Mr. Galea. Thank you Chris for supporting us in this venture. I think this has been something which has been successful to date. Again, we have collaborated together with Roberta and yourself because we have the same opportunity we would like to internationalize, we would like to look at other markets and new markets and explore Ghana as an opportunity while we're sitting here. You're already doing it, Chris so. That we're learning from you basically.
Edward: How come Chris hasn't come to see us, if he's doing something like that?
Chris: Yes, for sure. I've been 8 times and more.
Edward: Yes, but you never came to me.
Chris: I promise very soon.
Nadia: Okay. You thank you very much to everyone. Thanks a lot. Thank you for joining us.