Join Date: Sep 2010
Likes (Received): 68
African Express Airways
African Express Airways is the second fully Kenyan designated airline to over 30 countries in four continents. The airline is largest and oldest privately owned in East Africa based at Jomo Kenyatta International Airport in Nairobi. African Express Airways is profitable, growing and short-haul airline which targets business and leisure travelers, and operates a daily departure from Nairobi. The airline has a fleet of aircrafts, and has been updating with Boeing’s modern, environmentally friendly regional jets.
From Orphan to Airline owner.
By Samwel Kumba and Justus Ondari
Seeing him seated in his spacious office along North Airport Road, Jomo Kenyatta International Airport (JKIA), one would be forgiven for assuming that Captain Musa Bulhan has had it easy in life. For Capt. Musa, the proprietor and chief executive of African Express Airways, is the first African to own an airline with landing rights in Europe.
Besides, the 59 year-old was among the first Kenyans to acquire the highest pilot qualifications- an airline transport pilot license-in 1974. But behind the ‘firsts and accolades’, Capt. Musa’s life is one hit by tragedy at a tender age and littered by internecine ‘wars’ thrown at him by both nature and man. Robbed of parental love, first by the death of his mother when he was a toddler, and then his father at 15, the decorated career pilot was forced to start fending for himself literally before he was out of the diapers.
Four years down the line, at an age when most of his playmates probably still believed that their fathers were the strongest people on earth, a gangling of a boy with intelligence beyond his age made a startling career choice- to become a pilot. Unbeknown to him, the knack to survive was to be implanted in the young Musa right from the very day he decided to be a pilot. Many of the industry players he approached dismissed him as a joker.
“Many tried to frighten and discourage me from the profession but everything they threw at me made me even more enthusiastic. They would instruct me to wake up at 4.00 am and check the oil or tyres of an aircraft. They would give me tests on all sorts of jargon which I could not understand. Then they would call me names. If I were fainthearted and uninterested in the training, I would have dropped out. I survived the ordeal,” reminisces the captain. However, not all people were bad and many, including the government which gave him a scholarship, came to his rescue when the going got tough.
“In fact, I did not have much of a problem because I got a lot of help.”
Musa was to undergo training in the United Kingdom and later in the United States after joining the defunct East African Airways. When it collapsed with the collapse of the then East African Community (EAC) in 1977, Kenya Airways (KQ) was formed. Obviously, there were too many pilots for the few airplanes the then nascent KQ had. “I felt it was high time for someone to give room. Unfortunately, I would not tell anyone else to get out. I told myself to give room with my meager Ksh 270,000 benefits,”
It was then that Capt. Musa decided to set up an airline. He floated the idea to the then ministry of Power and Communication but the ministry officials felt it could not work. Thinking they were getting rid of him, they gave him a temporary operating permit for him to set up the famous Pioneer Airlines at Wilson Airport in 1978.
“I never sat down to decide on investing in aviation business. I just felt that since I knew about airplanes, why not try the business? I went into aviation because I felt could not do anything else better,” reveals Musa who currently fully owns four jets which fly to the Middle East, parts ofEurope and Africa. Unfortunately, in his new venture nobody would accommodate him.
“The government, through the general manager of the then airdromes department, gave me rent-free a two-roomed kiosk-like tin shack-cum-hangar that was unoccupied. Using part of the money I was paid from my East Africa Airways service, I bought a four-seater single engine aircraft.” He was a Jack of all trades: “I would fly it during the day and do the accounting in the evening before starting to look for business at night so that I would have another charter flight the next morning.”
In 1980, Captain Musa managed to buy a twin-engine 10-seater aircraft and, with time, he was able to lure into civilian flying a few pilots who had been trained in the Air force. “In 1981 I bought a single-engine aircraft for training and opened a flying school, Pioneer flying school. By 1983, I had built up a fleet of about six aircrafts bought on lease courtesy of the then National Industrial Credit, currently NIC Bank. I think they do not remember that they funded me back then.”
But his tumultuous beginning saw him develop a penchant for philanthropy.
“Until a few years ago, many Kenyan pilots, including jet pilots, had been trained either through my company or me. Still, I believe I should put a lot of time in training my fellow Kenyans.” With his business hitting the fast lane, Capt. Musa was to flex his financial muscle by acquiring Malindi-based Coast Air Limited in 1984.
“That is when I registered Africa Express Airways to differentiate between the local and international business. By 1986, I had a fleet of about 20 light aircrafts most of which I had paid for.”The enterprising Musa was not yet done and his business antenna was tuned on the regional market. He longed for newer challenges and inter-continental flights were alluring. He went for a Ksh 50 million loan from the former Bank of Credit.
With the money and a sense of feeling that he had outgrown the domestic airspace, he approached the government for an international license-and got it. “I leased a Boeing 707 and, with a couple of ex-East African Airways and ex-Kenya Airways pilots, I started flying to Italy thereby making us the first privately owned airline in Africa to fly inter-continental flights into Europe,” declares a visibly proud Capt. Musa with a glowing face.
Away from public glare, Capt. Musa’s airline has a distinct characteristic-it is one of the country’s two designated carriers, the other being the national career, KQ. “Designated airlines are carriers governed by the state although it does not own them. They have their flight schedules published and which they must obey whether or not the flights are fully booked. On the contrary, charter operators fly only when there is enough traffic.”
By now, he was doing brisk business. In 1988, with a sense of importance and spurred by his success, Capt. Musa sold 49 per cent of the company, a move that will turn out to be a source of his future trepidations. A simple argument over finances ensued with his new partners expressing their displeasure with the way Captain Musa was handling business funds.
The partners allegedly converted their shareholding into an overdraft and successfully managed to ‘manipulate’ their bankers to recall the overdraft within a week. “I was in Europe when it happened and with the short notice, the company was placed under receivership because of slightly over Ksh 60 million. I, however, managed to pay it in 6 months through just collecting debts among other sources,” explains Capt. Musa.
With that, the company reverted to him 100 per cent and within a year, he was out of the woods. Or so he thought. A shrewd entrepreneur, having withstood the uncertainties, Capt Musa registered another company-African Airlines International Limited- in early 1990s which took over the liabilities of African Express Airways.
Shortly, he bought a Boeing 707 with which he resumed international flights. At the time, Kenya Airways (KQ) was wholly-owned by Kenyans and was maintaining Musa’s fleet. “We were cooperating well with Kenya Airways, a move that enabled us acquire a second Boeing 707. But when Kenya Airways was sold, the new investors had different interests and ‘politics’ began souring of our relationship.” At about 1988, the now streetwise captain secured financing from an international financer and built the company’s present head office at JKIA and a maintenance facility.“KQ had become less accommodating with each passing day.”
Out of the blue, once again politics was to rear its ugly head in 1999 with a number of airlines ‘sprouting up’ without any traffics rights since KQ and African Express Airways were holding them.“The people behind the mess would come asking for, say, US$ 2 million(Ksh 140 million) in 20 minutes claiming we were breaching one law or another. Failure to pay would be met by threats of being placed under receivership.”
Soon, threats were to turn into actions and Musa’s business was put under receivership.“Actually,the receive-rship notice came together with the demand.” However, the powers that be did not know that they were putting a wrong company- African Airlines International Limited-under receivership.
Describing the then regime as wanting, Capt. Musa maintains that an unnamed powerful politician went for his business jugular in a bid to acquire his airline’s traffic rights. The political hassles were to continue and by 2000, it had become extremely difficult for Musa to convince the customers that itwas African Airlines International Limited and not African Express Airways Limited that was under receivership.“The effects were so severe that I had to stop all my flights in 2000.”
It was only in 2003 that Capt. Musa was to resume the flights although the matter is still before court after he sued the financial institution over the ‘unlawful’ receivership. “Our flights and revenues were back to normal. I give credit to the current administration as it has created an enabling business environment,” says Capt. Musa with a sigh of relief. He takes a swipe at the former regime.
“Some politically correct people were given carriers’ licenses and since they depended on mostly wrong advice, their businesses collapsed. Unfortunately, during their short stint in the business, they caused so much havoc that other serious players in the sector have found it costly both interms of money and time to correct the situation.” And like the proverbial cat with nine lives, Capt. Musa is raring to go. “We are flying to some parts of Europe-French territories- but we are resuming our flights to Europe probably from next April,” vows Capt. Musa who prides himself as being too expensive for any airline to hire him but is “one of the lowly paid executives at African Express Airways Limited.”
“We are trying to fly into one country per year but, at most, we can only open two new routes annually. We have licenses to fly to some routes but we are exploring their potential and trying to find out who can be our agents in the new destinations before we make any forays.” Indeed, to attain captainship, Musa has had to put in thousands of man-hours.
“One starts with a private pilot’s license before acquiring a commercial pilot’s one. Before one takes full command of even a small two-engine jet as a pilot, it takes about ten years of co-piloting. To get command of a Boeing as a captain, it can take up to 20 years,” explains the veteran pilot.“During the entire period, one would be examined and medically checked after every six months. This presents a major problem to our youth because they lack the patience and time to learn.”
Everybody in Musa’s company is a manager right from the cleaner and must work with minimum supervision, save for occasional correction where necessary. “I am equally supervised by my juniors because if I do something wrong, I am messing up their job.” Even in his hiring Capt. Musa goes for experience. Evidently his operations director Capt. Radosav Popovic who first flew in 1966 after graduating from the then Yugoslavia Airforce Academy. He is a retired pilot of a jet fighter.
He decries certain aspects of the country’s aviation industry. “We have too many people trying to do what they are not supposed to be doing. Similarly, whereas liberalization is not bad, we adopted it without examining its consequences.” Capt. Musa feels that for the industry to reclaim its pre-liberalization glory, the regulator Kenya Civil Aviation Authority (KCAA) should come up with a division charged with monitoring the commercial viability of every player in the industry.
But is the business profitable?
“Nobody will ever admit that they are making money in any business. But if we break even and I get a salary and my employees pay themselves, then obviously we are running a business which is viable.” For those interested in joining the industry, Captain has a word of advice: “First, let them join only if they have experience in the industry. Otherwise why would one want to put their money in an industry they know nothing about?”
Although his initial brush with partners left a bitter taste in his mouth, Capt. Musa is a firm believer in spread out shareholding of a business. “I am looking for strategic partners such that by the end of 2007, my family should not be the majority shareholders in the business. So far, we have done our best.”
But the offer is not open to every Tom, Dick and Harry.
“We do not want to have shareholders who are going to sit there and just tell us what to do. We want shareholders who will be involved in the day-to-day running of the business so that we share the blame in case of anything.”Once he retires, Capt. Musa does not intend to be idle. “Over the weekends, you will always find me in my farm in Garissa working. I export mangoes. On Sundays, you will find me in the bush looking after my camels and goats. So, after I retire, I will not be bored.”
What is Capt. Musa’s legacy?
“I don’t think there is much I have not done in this industry. Now I would like to dedicate myself to training young people to replace old pilots like me. My ambition is to leave competent young people running the show.” True to his word, Capt. Musa would rather we use photographs of his staff insted of his in the story. - FINANCIAL POST