Aviation Stakeholders Express Satisfaction With New Ground Handling Rates

Players in the Nigerian aviation industry have expressed satisfaction with the new Ground Handling Rates, saying that the proposed new thresh­old handling rates by ground handling companies in the sector was justified.

The Federal Government has also been told to grant waivers and palliatives to the ground-handling sub-sector, just as it did with the airlines, saying that this would prevent the handling operators from collapsing.

However, those spoken to by Daily In­dependent said that it was necessary for the handling companies to consult widely before implementing the new rates, especially with the airlines who are their major clients to avoid astronomical rise in airfares. ­

The umbrella body of the ground handling companies in Nigeria, the Aviation Ground Handling Association of Nigeria (AGHAN), had last week raised the plan by the handling companies to review upward the handling rates for domestic airlines, citing continuous rise in inflation and the collapse of the naira against major currencies.

AGHAN in a meeting with Capt. Chris Najomo, the Ag. Di­rector-General Civil Aviation (ADGCA), in Abuja, had said that the review was inevitable with the current economy.

AGHAN had proposed differ­ent rates for airlines, depending on the aircraft size.

For instance, the group pro­posed N400, 000 per flight for a Boeing 737 aircraft or its equiva­lent, N250,000 for CRJ or Embraer aircraft and N150,000 for a Dash 8 airplanes. It also proposed March 31, 2024 for the take-off of the new regime and sought the approval of the Nigeria Civil Aviation Authori­ty (NCAA) for full implementation of the new rates.

The proposed new rates have received the approvals of the managements of the two leading ground-handling companies in the sector, the Nigerian Aviation Han­dling Company (NAHCO) Plc and the Skyway Aviation Handling Company (SAHCO) Plc.

Speaking on the matter, Mr. Olumide Ohunayo, the Director, Research, Zenith Travels Ltd, said that the planned upward review of the safety threshold rates by the handling companies was jus­tifiable, but called for caution.

He lamented that in the last eight months, the economy had nosedived with many of the pri­vate sector players struggling to remain in business, while a few had closed shop.

According to Ohunayo, the fall of the naira against major curren­cies and the continued rise in the cost of doing business in the coun­try called for review of handling rates in the sector.

“If you look at the astronom­ical rates at which diesel, which is a major component of putting their machines into use and to also move goods in their organi­sations that was below N300 per litre then and now going as high as N1,000 and more, it is clear that upward review of the rates is jus­tifiable.

“They also buy things and trade in dollars. The same dollars that everybody is complaining of; they have to go and get from what­ever source. There is no special window for them.

“So, it is justifiable and because of the general increase in which all other members of aviation eco-sys­tem have reflected in their charges, they are justified to increase.”

Ohunayo, however, disagreed with the new rates proposed by AGHAN, maintaining that it may lead to skyrocketing airfares if not executed with caution.

He insisted that the new rates must be in tandem with the pres­ent economic reality.

He also canvassed for more negotiations with the airline op­erators in line with industry stan­dards and recommended practices to avert industry crisis.

“The review might affect fares, but it will be very marginal unless if only they intend to do it without proper consultations, dialoguing and coming to an agreement with the operators, then, there may be astronomical fares, but they can dialogue, and lay everything on the table.

“They can sit down together, look at the rates and both parties should agree on it,” he said.

Mr. Adeniyi Adigun, the Chair­man, AGHAN, in an interview with Daily Independent, declared that there was no going back on the upward review of the existing rates.

Adigun warned that the pres­ent situation of the handling com­panies might lead to the collapse of the sub-sector if not reviewed earlier.

He lamented that within the last eight months, naira had dropped in the international mar­ket by over 100 percent, currently trading at about N1,500 to a dollar in the market.

Besides, he decried that while the airlines were granted duty waivers on spare parts and air­craft acquisition, the reverse was the case with the ground handling companies, despite operating in the same aviation industry envi­ronment.

Besides, he emphasised that the handling companies lacked spe­cial window for foreign exchange, stressing that they source forex in the alternate market at very high rates and called on the Federal Government to address the myr­iad of challenges in the economy.

He also said that AGHAN had initiated a meeting with the air­lines, and assured that the outcome would be fruitful.

“Every sector or unit in the country has been facing serious challenges in this country. We know the Federal Government is trying to stabilise the economy, but we seriously need to survive. We can’t survive when we handle the domestic flights at N50,000 or N70,000 per flight. It is no longer sustainable.

“It is easy for the airlines to increase their air tickets at will without consulting the with the stakeholders, but as a service provider, the regulations say we should consult with our Civil Avi­ation Authority (CAA), which is NCAA in this clime and engage the stakeholders. And for you to increase your rates, there must be economic justification for it and there should be transparency,” he said.

In addition, Mr. Chukwudi Amokwu, aviation analyst, said that with the current prevailing economic situation, none of the handling companies would re­main in business.

Though he agreed that the sub-sector was deregulated, which gives handling companies the leeway to charge any rates they deemed good for their businesses, but noted that the dwindling val­ue of the naira against major cur­rencies had made upward review inevitable.

Amokwu regretted that the continuous rise of inflation in the country had further dealt a huge blow to the operating environ­ment, thereby making business unprofitable to investors in the country.

He lauded the leadership of AGHAN, led by Adigun for en­suring stability in the sub-sector and appealed to the government to show support to the handling companies in the sector, just like their airline sub-sector.

Culled from: independent.ng