The call by ground handling companies for a safety threshold handling rates for handling services in Nigeria is getting louder by the day as the operators say, billions of naira is being lost due to the current abysmal rates charged compared to other African countries.
According to them, with the current rates being charged and the reality of the Covid-19 pandemic, the companies are finding it difficult to stay afloat, buy modern ground handling equipment which are paid for in dollars, struggling with the lean resources to remunerate staff satisfactorily and attract capable manpower for the job, adding that such development could impede safety and security.
The Group Managing Director, Nigeria Aviation Handling Company, NAHCOaviance, plc Mrs. Olatokunbo Fagbemi says, it is very important for government to wade into the matter as
the foreign exchange and cost of living index have risen astronomically, adding that, they have been doing their best in ensuring that safety and security of customers are not compromised.
“We need to review our rates. Can we continue to do that and survive as an organization? The answer is no. can we continue to offer the same level of services that we have been offering? The answer is no. we have done a five-year plan of where we need to invest; we will continue to do this. We know where the challenges are”.
Mrs. Fagbemi therefore listed areas where government can assist the handles to include, first, low rate of interest to support their business so that they can support the airlines, grant and waivers should be extended to them like they gave the airlines for business and equipment and be able to access dollars at the same rate the airlines are buying, adding, “We need this to further enhance our business so that we can reduce the pressure on our operations”.
Managing Director, Skyway Aviation Handling Company, SAHCO plc Mr. Basil Agboarumi again reiterated that, the time to stimulate handling operations in Nigeria is now as the poor handling rate can no longer be overlooked, adding that a promising future for handling companies starts now with the review of rates.
“The fact is that inflation is coming in and it’s not helping us to do our business. After so many years of not reviewing our rates in some aspects of the business, the government sent correspondence to us on how we should go about that and in order not to make the same mistakes of the past, we think it is necessary for us to involve the government and the government has a role to play”.
Mr. Agboarumi also lamented the lack of access to forex as well as the exchange rates as at today which is over N500 to a dollar compared to N350 a dollar in the past.
“Ground handling equipment, personnel and certification are changing. So, we have to change with the developments around the world. In fact, you have to pay the right salaries and remunerations to attract and retain your best hands”.
He adds, “We are losing trained manpower to other aspect of the sector, we are losing trained manpower. Just as you train pilots for aircraft, we also have to train our staff, but unfortunately, we are losing them to the US, Europe and other parts of Africa. The services of our personnel are sought after. We are even losing staff to some of the start-up airlines that we trained”.
The SAHCO boss said, “We want to be able to compete and be able to retain our staff and to be able to do that, we need financial resources”.
Pioneer Chief Executive Officer, Accident Investigation Bureau, AIB, Dr. Sam Oduselu emphasized that, the call to review the handling rates are germane to the industry’s stability which will ultimately lead to it growth.
He stressed that, under the present low regime, the operators are barely surviving and not creating proper employment and because the number of staff they have are inadequate more pressure will be on the staff and the companies themselves, buying the new technologies for their operations will be difficult.
“When the salary is too low, they can’t attract qualified personnel to work for them. Even, outside the aviation industry, all low salary organisations, reduce productivity and affect the morale of the workers. For sure, the organisation cannot get the best out of the people. We don’t pray for an accident to occur and this is one of the ways to prevent such from happening”.
“For these people to be able to have the latest equipment, qualified personnel and at the same time, are able to make a little profit, the government can also benefit out of this”, he added.
Dr. Oduselu advised the handling companies to avoid unnecessary competition and because there are no standardised handling rates, the companies have over the years tried to undercut themselves.
He stated that, when there is standardized rates that come out from the regulation, not only that the ground handlers would be better for it, even the NCAA will have rest of mind.
“The handlers should work together and share information among themselves that will propel the sector forward. It is about time for them to come together, have a common fold, rather than turn the place to an unorganized market place”.
Dr. Oduselu says, the NCAA as the policeman of the industry should rise up to the occasion and do the needful in this regard.
“Even with the deregulation of the sub-sector, I think it becomes expedient and extremely important for the regulatory agency to intervene and ensure the commencement of a new handling rates”.
On how much operators believe should be adequate and acceptable by them, the handling company heads say, the body of the ground handling companies are handling the matter with all vigour and enthusiasm with the conviction of achieving a review of their rates.
The body, Aviation Ground Handling Association of Nigeria, AGHAN, they emphasized are following the steps as stipulated by ICAO before effecting any change in price.
“We are a law abiding business people, so, we have to follow the processes and procedures. We are engaging with the public and we are educating the people. We have been in some circle whereby some of the airlines have said it publicly that price review of the handling rate was unavoidable”, says SAHCO MD.
“If you look at it, there is no Nigeria aviation; there are civil aviation and the standards are the same all over. I will like you to do some research into how much that is being charged across west Africa and you will find out that whatever we charge here is about a quarter to theirs. You know that we have a lot of local contents in terms of our costs and we also have some international benchmark contents. When you look at that, that I think should tell you what the issue is. How much we lost per month, I can give you that for now, but if you are in another country and you are charge far more than what we charge here, that will give you an indication to what you are asking”, NAHCO GMD.
OBSERVATIONS
– Investigation has revealed that the Federal Government and the ground handling companies in the Nigerian aviation industry are losing an estimated $28,350,000 annually to inappropriate handling rates in the country. Appropriate handling rates should earn them about $56,700,000 (millions),
– Handling companies still charge between $300 to $1000 to handle a narrow body aircraft, rather than $1,400 to $1600 charged in other African countries,
– Handling companies still charge about $,3,000 instead of $5,000 in sub-Saharan African countries for wide body aircraft.
– No fewer than 45 narrow body aircraft on regional and international routes, which include Boeing B737, Airbus A320, ER 135 and ATR aircraft are handled daily at the nation’s international airports by the ground handling companies.
– No fewer than 20 wide body aircraft like B767, A330, B777 and B747 are also handled daily by the ground handling companies.
– It is observed that 70 to 80 per cent of accidents start from the ground. So, to prevent return of air crashes in the sector, the current rates should be reviewed, while the resources are used for training of manpower and acquisition of state-of-the-art handling equipment.
– The current rates are not sustainable because of the drop in naira against major currencies and the Ground Support Equipment (GSE) and the facilities used in servicing the are GSE are also procured abroad.
-For domestic operations, some pay as low as N12,000 to N20,000 for aircraft turnaround
