As Nigeria faces intense economic pressures, ground-handling companies may likely advocate for increased rates, citing soaring costs and a need to maintain operational sustainability.
In an interview, Mr. Olaniyi Adigun, Chairman of the Association of Ground Handlers of Nigeria (AGHAN), outlined the economic and historical context behind these rate adjustments, noting that current ground-handling fees are far below sustainable levels due to years of stagnation and fierce competition among providers.
Historically, Nigerian ground-handling companies originated as subsidiaries of airlines, notably with the founding of the Nigerian Aviation Handling Company (NAHCO) and Skyway Aviation Handling Company (SAHCO), established to support carriers.
It will be recalled after 35 years of the last amendment in 1986 to the ground handling rates in Nigeria, the Nigeria Civil Aviation Authority, NCAA through the Ministry of Aviation approved a safety threshold charges for handlers which commenced October 1, 2021 for international carriers and January 1, 2022 for domestic operators.
With this approval, NAHCO SAHCO, PAHCOL and Swissport Handling Company started charging the new rates.
The rates approved were between $1,500 and $5,000 (passenger and cargo flights) for handlers for a narrow and wide body aircraft, while for domestic operator paid between N20,000 and N70,000, depending on the aircraft type.
The aircraft type are: Narrow body aircraft include Boeing B737, Airbus A320, ER 135 and ATR, while wide body aircraft are B767, A330, B777, B747 and B787.
Currently, statistics shown that, Q400 for full handling costs N35,000, CRJ900-N71,429, Embraer 190-N100,000 and B737-N100,000.
The full handling of an aircraft requires 15 ground handling staff: 6 for baggage handling, 2 for check-in, 2 for aircraft appearance(Cleaners), 1 load control officer, 1 ramp coordinator and 3 group support handlers.
However, these entities have long operated under low-rate frameworks that Mr. Adigun describes as “unsustainable” for today’s economic reality.
He explained, “We are all in the same economic environment as the airlines, but while other sectors such as catering and fueling have adjusted, ground handlers have been left behind.”
Ground-handling firms provide essential services, from loading and unloading to aircraft pushback and power supply. These services require substantial capital investment in specialized equipment and training, most of which are priced in foreign currency.
Adigun emphasized, “Ground-handling equipment, from GPUs (Ground Power Units) to RA3 and ISAGO certifications, all come with costs denominated in dollars,” adding that the dollar-naira exchange rate, diesel prices, and high taxes compound these costs, leaving ground handlers with thin margins.
The AGHAN Chairman stated that, AGHAN does not influence the commercial decisions of its members, stressing that individual companies determine rates based on their operational costs.
“AGHAN’s role is to ensure a conducive environment in our sector. We don’t support price-fixing but rather advocate for fair competition and sustainability,” he stated.
He underscored the need for ongoing consultation, pointing out that Nigeria’s Civil Aviation Authority (NCAA) and the Federal Competition and Consumer Protection Commission (FCCPC) play mediating roles to ensure fairness and prevent exploitation.
Also speaking on the development, an aviation security expert, Group Captain John Ojikuku (rtd) said, the cost of fuel has increased by about 300-400% from what it used to be, with electricity costs also rising by almost 400%.
According to him, this has led to a significant increase in the cost of operations for ground handling companies, which use fuel and electricity to power their equipment and vehicles.
Ojikuku explained that once the cost of operation goes up, the cost of services will also increase.
“The companies, which provide services such as baggage handling, aircraft cleaning, and fueling, are likely to increase their prices in response to the rising cost of operation”, he said .
Foreign Versus Domestic Dynamics
Investigation reveals that, while international carriers generally accept incremental cost adjustments, domestic airlines often push back against rate increases, citing financial strain. This resistance is alleged has kept ground-handling rates stagnant, with fees for aircraft handling still low in comparison to global standards.
International carriers, the AGHAN Chairman noted, factor cost structures into their contracts and even offer incentives for high performance, fostering a collaborative approach that has led to smoother negotiations.
In contrast, local carriers tend to negotiate lower fees, limiting ground handlers’ ability to invest in newer equipment and more efficient operations.
A Call for Government Intervention
With inflation and currency devaluation eating into profits, ground-handling companies seek government support to ease some of the economic burdens.
Mr. Adigun called for tax waivers and customs rebates on imported equipment, explaining that reduced import costs would enable ground-handling companies to pass savings onto airlines, which could potentially stabilize rates.
“High taxes inflate the cost of business operations, which in turn impacts service rates. Reducing these taxes would not only help our sector but could boost the wider economy,” he said, arguing that tax cuts could stimulate demand, support job creation, and help reduce inflation.
As Nigeria’s aviation industry navigates economic turbulence, Adigun stresses that collaboration and realistic pricing are essential.
With mounting costs and essential infrastructure dependent on foreign exchange, ground handlers may have little choice but to push for rate adjustments to stay viable.
Adigun assured that AGHAN would continue to engage with government and industry stakeholders to find a balanced path forward.
“Ground handlers don’t want to cripple the industry, but we all need to survive in this economic climate, and fair pricing is crucial for the sustainability of our services and, by extension, Nigeria’s aviation sector.”
