Aviation Industry: Discussing Ground and Air Cargo Handling Services with Mrisho Yassin of Swissport Tanzania

Interview with Mrisho Yassin, CEO of Swissport Tanzania

As a business in the aviation industry which was hit hard by the effects of the COVID pandemic, what measures have you taken to remain sustainable?

There is currently a lot of pressure as a result of changes in the business environment and competition which we never had before. To succeed we have had to look at how we can be efficient as a business to be able to compete effectively and to remain sustainable for many years. Cost control has been used to ensure the implementation of effective cost-cutting measures to support the sustainability of the business, especially during these challenging times. Also, things like process engineering and redesigning of the business structure have been quite key to ensuring that we can deliver cost-effective and the most efficient services to remain afloat.

Do you have a challenge accessing funds or capital?

Swissport Tanzania does not currently have challenges accessing funds because so far we have done well in terms of the way we manage our cash flow. What we have been generating is also quite enough to support the business. In a way, we do not have massive investment projects, so whatever we invest in is to enhance the operational efficiencies within our business and we are in that range of spending that we can accommodate as a business. In 2020, due to the COVID-19 pandemic, we faced some capital issues but with the group’s support we were able to execute the projects that we wanted.

What is your scope of business and competitive advantage?

For us as a group, we want to continue to be the ground handler of choice in terms of delivering very high, respected, and quality service to the airline customers. We want to be chosen because of the level of service that we deliver.

Swissport Tanzania started operating in Tanzania in 1985 and has been in business for 36 years. Our core mandate is the provision of ground handling services at international airports. Currently, we are providing services to Julius Nyerere and Kilimanjaro International Airports. These are the two major airports we operate in. We used to operate in other small airports, such as Mtwara and Songea Airports, but we closed those operations in 2019. As a ground handling business, we mainly deliver passenger handling, ramp, and cargo handling services to a number of airlines flying to Julius Nyerere International Airport and Kilimanjaro International Airport. Swissport Tanzania is a subsidiary of Swissport International Limited, the leading global ground holding company. It has been a subsidiary since the year 2000 when Swissport International Limited invested in Tanzania. We have gained a lot of benefits as subsidiaries, especially in terms of research and development and leadership. The company had operated a monopoly from 1985 until 2016 when the market environment in Tanzania was liberalized and other new handlers were allowed to operate and start providing ground handling services. Despite the competition, we have been able to retain almost 90% of the business that we had during the monopoly, mainly because we have a good performance track record, a strong leadership, and a committed team to provide the quality and safe services required by the airlines. We have also invested quite a lot into ground handling support equipment and warehouse infrastructure, which is what airlines and people looking for services are looking at.

What is your general assessment of the aviation industry in Tanzania, pre-COVID?

The aviation industry in Tanzania before COVID was a vibrant one that was growing. The government revamped the Tanzanian national carrier which marked the beginning of the revival within the aviation industry. The aviation industry is mostly dependent on tourism and over the past 15 years the number of tourists coming into the country has been increasing. In Tanzania and Dar Es Salaam in particular being one of the business cities, we could see a lot of foreign direct investment coming in which also pushed the growth of the aviation industry. For scheduled operators, the numbers were not increasing quite as much but you could still see new players coming in over time. At some point, the likes of Etihad Airways, Fastjet Tanzania, and some general operators who basically were serving the local and domestic operators were operating in Tanzania. Investment in the industry has seen some low and high points. The government coming in to revamp Air Tanzania by purchasing new aircrafts was a big boost to the aviation industry and the economy. However, the industry experienced some major exits. We saw Fastjet Tanzania, which had been operating since 2012, become bankrupt and go out of the market. Another major player, Etihad Airways, also exited the Tanzanian aviation sector in 2018. Nevertheless, I think that the growth of the market has been quite good and quite progressive over the years.

How are you progressively trying to recover from this pandemic?

The aviation industry in Tanzania was significantly hit by the COVID-19 pandemic, as was the case in many parts of the world. It was a challenging period and as a business we are all looking forward to recovering from the aftermath of it. Currently, Swissport Tanzania’s cargo handling business has fully recovered. At the height of the pandemic, we used to do 45% of pre-COVID-19 volumes on cargo units but we are currently back to 100%. Ground handling is still recovering. We are not where we want to be, but compared to recovery rates in other countries we are positive on the outlook of business. What pushes the recovery quite high is the appetite of the airlines themselves to operate because almost 98% of airline customers before COVID have all resumed operations in Tanzania. Observing COVID-19 protocols is a sure way of making progressive recovery from the pandemic. I am happy the government is taking the initiative to make sure that we follow the COVID-19 protocols that have been set. Once we have everything in place, people’s confidence will increase and they will start flying in and out of Tanzania again. There are still a few places where Tanzanians are restricted to go to, but once the right protocols are set and observed, restrictions will be lifted for Tanzanians around the world and people will start flying again which will bring business back. We are banking also on vaccination programs which have been rolled out by several governments around the world. While this is being done, traveling confidence will again be increased and people will start flying again. We are hoping by next year we will achieve full recovery in terms of the ground handling business as well. As a business, what we are trying to do is to make sure we follow the set protocols. We are doing this to not just protect the health of our workforce, but also the health and safety of the traveling community and airline operators. This has been going on successfully over the past year and we are committed to playing a key role in supporting airlines as they ramp up their operations in Tanzania.

What is the role of Swissport Tanzania in aviation security and safety in Tanzania?

Swissport Tanzania provides aviation security to a number of our airline customers. We work with guarding aircraft and more importantly making sure that the people that travel are the ones that are supposed to travel. Now, with COVID-19, there are a lot of restrictions, so it is also to make sure that whoever travels is allowed to travel wherever they are going. From the security service point of view, we do mostly profiling of passengers flying to make sure we have the right passengers onboard. East Africa, and Tanzania in particular, is susceptible to illegal migrants and we play a big role here to make sure that they are not flying through Swissport or through airlines that are handled in Tanzania.

What are some of the success stories with regard to awards that you have achieved since you came into the company?

There has been a number of awards won in general and they consist of those that are coming to the local business as Swissport Tanzania and the awards that are globally handed to Swissport International. Being part of Swissport International, we also benefit from those awards. As Swissport International, the awards we have won include the Ground Handler of the Year 2013, 2016, and 2017, Air Cargo Handler of the Year, 2014 which was the 6th time we won in succession, and African Cargo Handler of the Year 2011, 2013, and 2015. In Tanzania, for the 7th successive year we won the financial reporting award issued by the National Board of Accountants and Auditors in 2019 which demonstrates transparency in financial reporting. Swissport Tanzania again won in 2019 a corporate governance award issued by the Dar Es Salaam Stock Exchange. Unfortunately, there are no specific institutions in Tanzania that give awards for ground handling performance.

What is your vision for the company in the medium term, three years’ time? What would you like to have achieved?

For us as a group, we want to continue to be the ground handler of choice in terms of delivering very high, respected, and quality service to the airline customers. We want to be chosen because of the level of service that we deliver. We also want to remain profitable despite all the challenges we are facing; that is, competition at the local level and the impact or challenges brought by COVID-19.

Are there any policies that are affecting cargo and ground handling services in Tanzania?

There are both positive and negative policies impacting operations as ground and cargo handlers. Tanzania is pushing to be one of the countries exporting perishables such as food items and horticultural products. This plan and vision will help business grow because ultimately all these products, if exported by air, will land at the airport and we are confident they will be handled by Swissport Tanzania. The launch of Terminal 3 is also good for business. Once flying opens up we will definitely as a country be able to offer very good flying experiences to passengers coming into Tanzania. This is helping the country to better position itself and also helping us and the airport to also achieve what we want to achieve in terms of operational efficiencies. The unreliability of some policies in the country also impacts operations negatively. For many years, renewal of concessions in Tanzania has been based on performance. Recently, there has been communication from the Airport Authority for the renewal of concessions to be done through tenders. However, if that is done through tender, what will happen to the investment that an investor has made in the business over the years? Going through tender to renew concessions as a right to operate a particular airport makes the business environment quite tough to predict, slowing down the investment made. This kind of change can reduce the appetite for investors to invest in Tanzania.

What is your policy regarding CSR?

We have in place a strategy and a budget that focus mainly on education and supporting projects within the educational system. Occasionally, we do also focus on health services and provide support for organizations. But because of the many challenges in the ground handling business in Tanzania, our strategy has not been consistent. We are affected by competition and the need to control our cost. When this is done, it impacts some cost line items such as CSR.

With 90% of the market retained despite the challenges you mentioned, is business going well now?

Life is not easy even with the 90% retention of the business in the Tanzanian market. The aviation industry is one of the industries that struggles financially in relation to return on investment. Airlines are always looking at cutting costs. Because of competition, airlines have several companies to approach and because of the size of the market and limited opportunity in Tanzania, we try to keep that market. New entrants also want to get some stake in the market and we end up implementing price-cutting strategies because if we lose even 10%, we lose a big chunk of the business in Tanzania. This brings significant earning pressure to us in terms of profitability.

What is your inspiration? What drives you to do what you do?

I have always been driven by my ambition to grow wherever I find myself, right from when I started my career as a trainee to when I joined Swissport Tanzania and got promoted to CEO. One thing that stands out when I look back on why I have been able to achieve what I have achieved is that I like receiving feedback. When I talk or work with people, when people share feedback on my performance, I accept it and work on it to develop more. I am very committed to what I do and spend time to make sure that I deliver to the expectation of the people that trusted me. More importantly, I am not scared of taking on new responsibilities. Even if I cannot in the beginning, I still do my best, take the chance, and make sure that I deliver to expectation. Because of this, I have been able to excel. Also, in my career I have learned the ability to manage people. As a person, I have been able to manage my colleagues, my peers, my direct reporters and push them to work for me. Because of that, I have been getting good support from the team and that makes things happen wherever I am to achieve what I have achieved so far.

ABOUT SWISSPORT: Swissport is an aviation services company providing airport ground and cargo handling services. In 2020, Swissport International provided best-in-class airport ground services for some 82 million airline passengers and handled roughly 4.1 million tons of air freight at 116 cargo warehouses worldwide.

For more information, please visit: https://www.swissport.com.

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