The Managing Director of Med-view Airlines, AlhajiMuneerBankole has advocated that it is possible for indigenous carriers in the country to attract funds from the financial institutions if they conduct their business according to the rules.
The Med-view Chief Executive made this position known in an interactive session with journalists in Lagos recently, citing his airline as one of the few airlines in the country that has benefitted from bank facilities because of its shrewdness, transparency and integrity in conducting its business.
According to him, it is possible for domestic airlines to access funds from financial institutions if they have laid down procedures for compliance with remittance of loans instead of utilising monies meant for the business on frivolous affairs.
He attributed the success of his airlines so far in the aviation business to compliance to best financial regulations and standards, commitment, discipline and integrity.
“The name of the game in aviation is commitment, integrity and strict adherence to best financial standards and regulations,” he stated, pointing out that, banks become apprehensive of granting loans to airlines given their history rife with early collapse of airline entities.
Bankole was quick in stating that Med-view has been able to change that with its financial discipline and integrity.
He however, acknowledged that airline business is risky and explained that most Nigerian banks would never extend credit facilities to airline operators noting that out of 18 airlines that operated only six are still operating today and already two are under threat of dying.
Narrating his story, he said, “When I wanted to secure $10 million loan from a major bank in Nigeria, I was refused because they said that they had it as a policy not to give credit facility to airlines because of their precarious situation. They have very short life span. So they refused to give me the loan and I insisted. I had meetings with them and at a time they asked me why Nigerian airlines do not exist for a long time, as obtained in other parts of the world.
“I explained to them that it is partly due to lack of discipline, lack of determination and inexperience. Some of these operators just come to the industry and decide to establish an airline so they rely on expert and professional advice from pilots, airline managers and others and most of the time these people are not sincere to these operators. Of course, they will not be as dedicated as you who are committing your money in the business,” Bankole said.
He pointed out that there is lack of sincerity among many operators who are not disciplined enough to differentiate between operating funds from personal monies and in the mix they impinge into their capital.
Bankole also said that for an investor into airline business to succeed, he must have passion for the job and sincerity with everyone involved in the business.
He said that when these industry professionals are engaged, they most often go into spending spree with the funds made available by the investor and because the investor is inexperienced, he may not know how to adopt cost cutting measures.
“It is a believe, all banks in Nigeria say and believe that aviation is a no go area but we have disabused that. In one of my meetings with a major financial institution in Nigeria.”
“Med-view is a test case and as a result of this test case we wanted to purchase an aircraft to the tune of US$10million, and this major bank took a bold step and called me for a dialogue. Most banks just have aviation desks with experienced people with knowledge of aviation, but this bank does.”
“Today we have facility from that bank and we have paid up completely. We used the money to buy two aircraft.”
“Airlines are dying because people ventured into the business by accident as they did not learn or go to school to understand the rudiment of the business.”
“The game today is that we have invested much on training and growing the business and we hope with this experience many commercial banks will come aboard.”
“The beauty of success is for you to discipline yourself. Customers buy tickets for travel in the future and so it is not your money to spend. Create a dedicated account without a checkbook. All revenue goes into that account. ‘In truth, Cash on the table is not money to be spent’.”
“Most of our successes are based on our discipline and diversification that is why we are into hajj and a host of other businesses.