Iain Andrew, senior vice president, Dnata Agencies, reveals plans to roll out his giant portfolio of businesses into new markets including India and Asia.
What was your mission when you joined Dnata in January last year (2006)?
At a high level I came in to try to build a bigger Dnata; that's my aspiration across the region. The Middle East and West Asia is what we're really targeting. We don't want to go into Europe, the US or the UK. We have a strong brand in the Middle East and we have a lot of customers transiting down to Asia, so we want to make the most of that. In terms of what I did when I came in, it was very much about understanding the businesses that I have.
It's a portfolio of businesses ranging from MMI and Gulf Ventures right through to airline affairs and holidays. It's a portfolio role and I think it's strong in some respects, but needs to develop in others. I want to build those on the back of the strength of Dubai and then push those out across the region. I have also spent a lot of time visiting outlets, customers and staff and trying to understand their gripes and their ideas and taking those on board.
What ideas and gripes did they have?
Many small things in terms of the way we recognise, renumerate and incentivise our staff. About three to four hundred came through, [covering issues] from smoking policies and the fact the chairs were not comfortable, to the way we deck out our outlets. The staff living and breathing it (the business) are the ones who sometimes know best. It's the small things that are starting to come through and make the difference. If you are talking about a silver bullet, it's probably already been done.
When you joined, what did you identify as some of Dnata's weaknesses?
We got out of a couple of businesses, but we have good foundations. We hadn't exploited our regional presence as much as we could have done. We had a strong brand across the Middle East and could have been in a lot more countries than we were. There were also some markets where we hadn't invested as much as we should have done and I have spent a lot of personal time in Kuwait and Saudi Arabia trying to push those businesses forward. We have been looking at other markets - Bahrain, Qatar and further into Abu Dhabi - trying to push out the portfolio of products, but at the same time looking at each of the businesses and identifying their strengths and weaknesses.
Perhaps we hadn't allowed our staff to have as much of a voice as they should have had and I made some organisational changes to make sure we had a breadth of experience.
Was improving Dnata Holidays' proposition essential?
The holiday division is a critical part of the organisation and we have invested a lot of money this year in getting the foundation stones in place.
We have a great team in place now under Nick (Sheppard), all with proven track records and a variety of skills and experience. I am pleased with the brochure and I can see where we can take that further in terms of diversifying into other offerings.
We have already worked with Lufthansa to create its Holiday Europe brochure and we support the venture through our contact centre, which shows we can also offer to other companies solutions for their own brands as well. Holidays is a growing market and I want to be in a number of product areas. We are looking at those now. Should we go into ski, villas or apartments? We are also starting to see a huge growth for New Zealand, while Australia and the Far East remain popular.
We will probably break up the brochure [into separate brochures] and are currently brainstorming on other holiday products we could introduce to the market. I would like to think we came up with something no one has thought of, but I think it is just about using proven models and implementing them to a high standard.
What areas of the business are you looking to develop from 2007 onwards?
To continue regional growth, still making sure that we focus on Dubai where there is plenty going on and ensuring we have a consumer-facing presence in new developments. But we are also looking at broadening the product range within those divisions so each of them can look at how to provide a better quality service to the customer. For example, DWT (Dnata World Travel) has opened its first and business class counter at the airport.
When you talk expansion across the region, do you mean having a physical presence in other countries?
Yes, corporate and retail consumer-facing travel outlets, but also taking other elements such as Gulf Ventures where it works. With holidays, it will probably be run centrally here, but we will offer outbound from other markets, and with events, we will go into countries that have growing or established MICE business.
In which countries are you looking to roll out the portfolio?
Qatar and Bahrain, and then we will look at a second tier. Some of the ‘stans' are interesting; Kazakhstan, for example. We have a strong relationship with Kazakhstan through our GSA (Air Astana). It's a growing country; it's early, but there is no reason why we shouldn't go there. We will look at India, Egypt and other major markets around the region.
With the Far East, it's early days yet, but we have a lot of customers going down there so we should at least be there to receive them.
What's the time frame for this?
The secondary list will be more towards next year, but I would like to be in Qatar and Bahrain this year. We are talking to partners, but I don't think it will happen in time for the summer; probably towards the end of the summer.
What is your plan for rolling out Dnata World Travel outlets?
It's all about trying to find retail space that is right for us. Our profit margins are not quite as high as other players in the market so we can't always afford the high rents.
We are obviously looking for a presence in all of the new developments as they come live; Business Bay and Jumeirah Beach Residence are just two. I don't have a [total] number [of outlets I would like to roll out], but we have a location strategy.
We would like to be in all the shopping malls but again, it's expensive. We have a small outlet in the Mall of the Emirates and have just opened one opposite Carrefour in Deira City Centre.
The regional outlets, both corporate and leisure will be rolled out on a country by country basis. In Saudi Arabia we have a partnership with Lingo, a lifestyle outlet, which offers a number of services (such as buying insurance, paying utility bills etc) under one roof. We have just opened an outlet in one of their stores and our aspirations are to be in more than 100 of these outlets. This gives us a mall presence in a more economic way.
How important is IT to the business?
It's an invaluable component across all businesses. Inevitably there will be a squeeze on revenue for agents and all of my businesses as we go along, so we will have to be more efficient. We have to make sure our transaction times are as low as possible and I think the only way you can do that is to utilise technology. If you look at the low cost operators, if you are servicing a low cost ticket in a mall outlet with high overheads you have to make sure that is done very quickly. If you take a long time you won't get the income in to cover the cost.
We have to reduce our transaction times and there are plenty of opportunities to do that through the GDS, but what we have chosen to take those and embellish them with our own software on top.