Nigeria’s travel industry stood strong despite 2017 recession – Koster

Corneel Koster
The Senior Vice-President, Europe, Middle East, Africa and India, Delta Air Lines, Corneel Koster, at a news conference in Lagos says the travel industry in Nigeria is resilient despite the economic recession of last year.

Delta Air Lines’ Atlanta-bound plane had an incident shortly after departing the Murtala Muhammed International Airport, Lagos, recently. What is the update on the investigation of the incident?

We are cooperating with the Accident Investigation Bureau and other Nigerian aviation authorities while the current investigation is on-going. So, it is an on-going investigation.

 How did the economic challenge of 2017 and the attendant foreign exchange scarcity affect Delta Air Lines?

I think we can all agree that from an economic point of view, we were glad to see 2017, and looking at 2018, things look much better. It is important to point out that even though there was an economic crisis and foreign exchange crisis in 2017, the travel demand remained very strong.

We were able to continue to operate. We worked with all our partners to make sure that we were in a position to stay strong here. We never had any intention to leave Nigeria. You can see that we are back to growing again.

Even though 2017 was challenging, fundamentally, it reflects the strength of the Nigerian market; that even with the difficulties that we encountered, the travel industry remains strong.

 How would you assess the travel demand in Nigeria and Africa in general?

The year 2017 did show a slight decline in traffic over 2016, but it was less than we expected and the market to the United States remained very strong. This was due to the strength of the Nigerian market and that of the American economy.

I think the important thing is that the decline was minimal, and we have now (starting from the fourth quarter of 2017 and the first quarter of this year) started to see increase in traffic to the levels of 2016 and above.

Also, if you look at traffic/travel demand across the transatlantic, there was a slight decline of numbers but we are now growing. We are growing our traffic in Africa by 10 per cent this year, and we are growing by about 36 per cent in Nigeria.

So, it is not only that we are back to daily flights from Nigeria to United States, we are putting one of the largest and best aircraft – Airbus A330 – in this market that we have a lot of confidence in. It is really a positive story for us.

If you really look at Africa, we keep analysing the potential of this great continent; and if opportunity arises, I am sure we will add capacity to our destinations in this great continent. We are really more into Africa, we see potential and we hope to be growing more in the near future.

 What other plans do you have for the Nigerian market?

It is fantastic to bring our Airbus A330 aircraft here, but we are also tailoring our menus to Nigerians’ taste. We have separate meals in Delta One. We have rice and we keep improving the presentation of the foods across our cabins.

As I mentioned earlier, we are also showcasing a lot of Nollywood films on board our flights. We have Nollywood films on more than 300 of our aircraft at the moment. So, it is not just on the flights on the Nigerian route but also on other routes.

On our flight from JFK New York to Holland last night, I was watching a Nollywood movie. So, we are proud to showcase the film industry and it is part of our commitment to delivering a more diverse in-flight experience, and to have that great connection with our Nigerian travellers.

We talked again about our RFID that is important for baggage tracking. It helps us to know where your baggage is in all stages of the journey. It is not that we are missing a lot of bags or not connecting a lot of bags; Delta is the best in baggage handling in the industry. But our customers are asking for this to have a peace of mind. So we are happy to offer that as the next phase.

It is important to mention about airport experience. Delta is investing a lot in airport experience. In fact, we are investing more than $12bn over the next 10 years in airport experience. We want to provide airport experience of the future. We want to transform the experience in Atlanta, Los Angeles, Salt Lake City, JFK and other gateways. We want to invest in new airport experience across our gateways.

 What is the scope of Delta’s investment in corporate social reasonability in Nigeria?

We have a lot of programmes. We have a programme called Junior Achievement, which we use to touch hundreds of students. This is different from the Delta Internship Programme. The internship programme is a special and intense programme. It is not something you can do casually. We expect them to work at an international level almost immediately. It involves a lot of learning process. It takes more of our time, and we hope that one day, we will expand this.

Foreign airlines complained about lack of foreign exchange and inability to repatriate their profit last year; what is the situation now?

Thanks to the springing economy here; and in close partnership with the government and banking community, I am very pleased to say that today, the foreign exchange issues are resolved. We operate normally commercially now. So there are no more issues.

 Can you tell us about your profitability in the 2017 financial year?

Delta had a great year last year. We had a great deal. We had an adjusted pre-tax income of about $5.5bn, of which we shared about $1.1bn in profit sharing with our teams across the world. That is the largest profit sharing that this industry has ever seen. Delta’s operating revenue was about $41bn at four per cent. So we had a good year and we keep believing in the industry in the United States.

What is Delta’s aircraft acquisition and investment programme like?

Aircraft is a very exciting thing for us. We have a huge fleet renewal programme underway. As of last summer, we started flying the flagship, Airbus A330 900. We took delivery of it and we have in total 23 of those aircraft coming into our fleet.  That is the initial order.

Last year, we needed to go as far as possible to get the economics of the new aircraft. So most of those aircraft are for the transatlantic sectors, which is some of the largest sectors we fly. As of this weekend, we are welcoming one flight per day between Detroit and Amsterdam of that great aircraft.

We also have 100 Airbus A320 Neos aircraft. These are fantastic aircraft whose delivery will start in 2020. We also have Bombardier CS 100 aircraft for our domestic, regional and North American flights. That is a big list. We have 51 Boeing 737-900ERs planes still to come; there are 92 Airbus A321 planes.

We have set aside the Queen of the Skies-Boeing 747. We have retired our Boeing 747 planes and a lot of old regional jets. If you need the exact number, we can get our team to do that including the exact numbers, those that have come and those that are yet to be delivered. I can get you the exhaustive list and the correct numbers. It is indeed a big fleet renewal and expansion programme at the same time.

Considering how important the New York route is to Delta and the Nigerian travellers, why did it take so long for the airline to start flying this route? Again, what has changed now that you have added this new route?

We are really happy to be flying to New York. We saw the potential. A lot of things are involved in flying to a destination. We have got to have the route planning and development in place, slot availability and others. Everything needs to come together and this is the right moment to do so.

It also has to do with the increasing diversity of the Nigerian economy. When we started flying from Nigeria to Atlanta 10 years ago, the Nigerian economy was essentially based on oil. So at that time, we flew passengers to Atlanta and certain hubs that are the oil destinations.

As we now see the Nigerian economy diversifying into finance, culture, high tech; that has very significant implications for the East Coast of the United States. So, it is important for people in those industries to fly to New York which is the capital for those industries.

 What is Delta’s growth strategy for Africa?

We intend to grow our network in Africa. I can surely tell you that we will grow. As I mentioned, we will grow by 10 per cent in Africa this year and this is a good growth and we are proud of this.

You asked earlier whether we intend to have partnership with any Nigerian airline. We currently do not have any Nigerian carrier as our partner, and we do not have any plans underway. Of course, we will always keep an open mind. We are a big carrier and we are always looking for opportunities. So, nothing right now but who knows.