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Ground Handling: Key players propose minimum handling rates, adjustment, urge NCAA to intervene…

Ethiopian aircraft

”We are proposing to adjust domestic ramp handling rates to be at per with the exchange rate which has  significantly impacted on the cost of operations”.

Concerned players in the Ground Handling business in the aviation industry want the Nigerian Civil Aviation Authority, NCAA to intervene in the handling rates for aircraft for the sustainability of the business.

This is just as the handling companies say, they were tired of running at a loss with the abysmal rates charged in Nigeria compared to what obtained in other West African countries.

For instance while Nigeria companies charge between $400 and $1,139  for narrow body aircraft and between $3,000 and $3,200  for wide body, countries like Guinea charge $1,673 for narrow body and $4,715 wide body aircraft, Ghana – $1,500 narrow body and $4,150 wide body, among others.

The narrow body aircraft include B737, Airbus A320, ER 135 and ATR aircraft, while the wide body aircraft are categorised as B767, A330, B777, B747 and A380 aircraft.

Barr. Chike Ogeah, Former Chief Executive Officer, CEO skyway Aviation Handling Company, SAHCO said, “It shows that something is wrong for Nigeria to have the lowest handling charges on the continent. NCAA as the regulator must sit down with the handling companies to come out with a realistic regime for the handling companies”..
He said, it is ridiculous for Nigeria to charge as low as what it is being charged now, added that, . It does not make sense. 
“I think the coming onboard of AGHAN will address that. The only way their survivals will be guaranteed is for them to charge right. Mind you, some of the companies are listed on the Nigerian Stock Exchange (NSE) and they need to deliver to their shareholders”.

Another Former MD SAHCO Alhaji Oluropo Owolabi said, it was high time the NCAA wade in because the government was losing on foreign exchange and the foreign carriers were taking undue advantage of the ground handling companies.
According to him, NCAA should stamp its authority and approve a minimum rate with sanction to anyone that violates it and should be treated as a saboteur to government.
“This act, has painfully affected the revenues of the handlers, the take home of FAAN at the end of the year. The total sales that we pay as remuneration to FAAN at the end of every year surely will diminish. It is what we take that we pay for. As we are losing, FAAN is losing and NCAA is not taking up its responsibility to ensure everything is being done rightly”.

“We are a country that is suffering just because there was no authority to be able to stamp their regulation on these airlines and call the ground handling companies to order”.

It is the opinion of Mr. Kayode Oluwasegun-Ojo, former Managing Director, Nigeria Aviation Handling Company, NAHCO emphasized that, charging for a service that is less than cost-reflective, means the companies are not getting their cost back and on the long run, it will not be sustainable. 
“Lack of sustainability for aviation has serious implications because aviation actually starts from the ground and you land back on the ground. It is the ground handling companies that do that”
“If you are charging less than cost, it means you are subsidizing from somewhere and this will have impact on the service you provide, equipment on the ground and others”.

Chairman, Board of Trustees, Association of Ground Handlers of Nigeria, AGHAN, Mr. Sam Oluwole said, the  bane of the sub-sector currently is the extremely low charges by ground handling in Nigeria, which was not commensurate with the quality of service rendered daily, the safety and security. 

He emphasized that, the airlines play on the rivalry among the ground handling companies to pay a token, get better services here than whatever they are getting outside the country. 

“We need to work out something that will be a win-win situation for the airlines and ourselves. I mean something that will enable us to still be in business and provide adequate service to our customers. There are standards set by international organisations on this; IATA, ICAO all have standards”.

Two aviation analysts, Mr. Tayo Ojuri and Olu Uhunayo say, as business partners within aviation’s ecosystem, the companies must jaw-jaw rather than war-war.
Ojuri said, “We reckon ample negotiation coupled with meaningful consultations with the airlines based on transparent information is necessary to verify that airlines are subject to cost-related and effective ground handling charges. A suggested middle ground will be to develop Minimum handling rates”.
He added, “As the regulator and industry umpire, NCAA can be an independent observer during the negotiation process to ensure the airlines and ground handling companies arrive at a mutual fee which will ensure safe, secured operating environment which augurs well for the travelling public”.

For Uhunayo, there should be a benchmark of what is obtainable because the handling companies cannot price themselves out of the region. 
“We can pick the average rate in West African countries. If we go higher, we can allow the airlines to pull fares up and that may have a negative effect on Nigeria, but if we benchmark, the airlines will still come to Nigeria, and continue to operate because we have the population”.
“But, with what we have right away, it is the foreign airlines that are making money, yet, giving Nigeria the highest ticket fares with very low ground handling rate. The airlines have monopolized the fares and making outrageous gains at the expense of Nigeria and the ground handling companies”, he added.

They urged the ground handling companies not to lower their standards but continue to get their certification and be members of all the international affiliated handling companies with regards to safety and security. 

The analysts expressed optimistic that this would improve airport operation efficiency, enhance passenger facilitation process and optimize Service Level Agreements with airlines.

Investigation revealed that in Guinea – $1,673 (narrow body) and $4,715 (wide body) aircraft
2. Senegal – $2,250 (narrow body) and $5,259 (wide body)
3. Cameroon – $1,400 (narrow body) and $4,500 (wide body)
4. Sierra Leone – $2,250 (narrow body) and $5,250 (wide body)
5. Ghana – $1,500 (narrow body) and $4,150 (wide body).
While in Nigeria, the rates oscillate between $400 and $1,139 (narrow body), depending on the negotiating power of a foreign carrier and $3,000 and $3,200 (wide body), depending on the negotiation of the foreign carrier.
It was learnt that these rates have been on since late 1980s and 1999.