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Ground Handling: Price War is affecting the business, SAHCOL calls for cooperation

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Acting MD SAHCOL, Mr. Basil Agboarumi addressing members of LAAC at the Gateway forum on Thursday 24/5/18

All is not well with the two ground handling companies in the aviation industry.
The two companies, Skyway Aviation Ground Handling Company, SAHCOL and the Nigeria Aviation Handling Company, NAHCOaviance are trying to undo each other with the price charged for ground handling to gain the market share in the sub- sector of the industry.

The unhealthy rivalry between the two companies has been described as an ill wind that brows no one any good.

At the Gateway Forum of the League of Airport and Aviation Correspondents (LAAC) in Lagos, the Acting Managing Director, SAHCOL, Mr. Basil Agboarumi who decried the development said both companies were losing a lot of money in an attempt to attract more airlines and other clientele to do business with them.

He said the growth of the business had been affected negatively as airlines were catching in on the development to do business with the companies that had the lowest price.

Mr. Agboarumi noted that cooperation was the way forward to stay in the business, adding that in other climes companies pool resources to break even and keep the market growing.

“As a ground handling company, we are losing a lot of money; airlines coming into the country are paying peanut for ground handling services because of price war. In some countries, there are fixed prices for handling certain categories of aircraft but here there is no control; people charge as they like. Unhealthy competition exists in the ground handling sub-sector and government has to do something about it,”.

“In other parts of the world, ground handling companies are pooling resources together; it is for us to get to that maturity stage. Even airlines are cooperating now. When you have airlines in various parts of the world, they complement each other in passenger and cargo operations. We will have a better aviation industry once we begin to look at the industry from that perspective,”.
The SAHCOL Acting Managing Director, also stressed that with the current economy situation in the country regarding the exchange rates, bring down ones price could kill the business as the rates charged by the ground handling countries had not charged despite the Naira to the dollar.

He added that the price of ground handling equipment had not reduced rather it had risen astronomically.
” We still operate with the same tariff that we have been operating up to the time naira was N165 to a dollar and regrettably today, the rate has grown more than double. What it costs us to buy a ground handling equipment today has grown astronomically. It is not that the cost has changed, but whereby we were spending one naira to buy a ground handling equipment before, by the time we source for foreign exchange, you will see that it has gone to about N3. That’s the situation we have found ourselves. But, the airlines still pay the same amount of money they have been paying us even before then”.

He also called for the regulation of price in the sub- sector to avoid the recent development in the future.
“Let’s look at the banking industry for instance; there is a regulator that regulates their activities. For instance, the handling rates we pay in Nigeria has not changed over the years despite the fall in naira to dollars and other major currencies. The airlines have consistently change their fares, but we have not done that for so many years”.

On what SAHCOL is doing to retain its good hands due to recent staff leaving in droves, Mr. Agboarumi said, ” When it comes to life, you can’t stop anyone from aspiring further. Men are no created to be stagnant and that is why you have migration. Workers in companies too do that. As much as possible as a company, we will try to keep our goods hands and we don’t want anyone to leave after joining us, but you can’t stop people from moving. If we do that, it becomes an anti-labour practice that you spoke about earlier. We are doing a lot to retain our staff as long as we can. People have plans for their lives and careers and people will move from time to time.

“SAHCOL still has the best of staff in the system with the best of training. We are consistently training our workers and as much as possible, we are retaining our staff “, he added.

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