Poor ground handling rates cost local airlines N11.6 billion each year.


Perennial underpricing and low rates in the ground handling sub-sector of aviation cost the overall business $28.35 million or N11.6 billion ($1:N410) each year.

According to an industry benchmark on average handling rate on the continent, the sub-sector is worth at least $56.7 million in revenue, compared to the half it now generates in Nigeria.

The shortage has been recognized as large by stakeholders and operators alike, with serious consequences for safe operations and long-term sustainability.

They encouraged the Nigerian Civil Aviation Authority (NCAA) to step in and implement a safety threshold-handling rate as part of ground handler economic regulation.

Nigeria charges one of the least competitive ground handling prices on the continent, according to the Guardian, due to a lack of coordination among operators.

According to the findings, roughly 45 narrow-body aircraft – Boeing B737, Airbus A320, ER 135 and ATR aircraft – are serviced by ground handlers at Nigerian international airports on a daily basis on regional and international flights.
On a daily basis, there are roughly 20 wide-body aircraft — B767, A330, B777, and B747.

Meanwhile, instead of the $1,400 to $1600 charged in other African countries, handling businesses still charge between $300 and $1000 to manage a narrow-body aircraft.
Similarly, they charge around $3,000 for wide-body planes, compared to $5,000 on average in neighboring countries.

Some airlines pay as little as N12, 000 to N20,000 for aircraft turnaround for domestic operations.

Dr. Sam Oduselu, the first Chief Executive Officer (CEO) of the Accident Investigation Bureau (AIB), said the shortage is frightening and a disservice to a sector in desperate need of support.
“I have had the opportunity of observing current rates in Nigeria and other parts of the world,” Oduselu remarked.
It is, in my opinion, retrograde and should be reconsidered.
If you notice, the Nigerian aviation industry had a severe finance difficulty prior to the emergence of the COVID-19 pandemic.
The COVID-19 pandemic has exacerbated the situation.”

He went on to say that, aside from losses to the industry and regulators who profit from ground handling charges, the main concern is the impact that low revenue accruable to operators and underpaid staff will have on airline safety and security.

“A low regime handling rate will make it impossible for the ground handling organization to operate optimally and successfully.
Furthermore, the government is not reaping the economic benefits that it should, particularly from international carriers.
You can see how easily the personnel can be compromised as a result of this.

“There’s also the issue of criminality.
For example, if you pay your employees peanuts and the syndicates can get their hands on them, they could smuggle drugs and other harmful stuff onto the plane since they (staffers) are dissatisfied with their jobs.
I believe it is necessary and expedient for the regulatory agency to act and enforce the implementation of increased handling rates.”

Operators, according to Oduselu, would benefit the sector if they reduced mutually destructive competition and learned to cooperate.

Olatokunbo Fagbemi, Group Managing Director of Nigerian Aviation Handling Business (NAHCO) Plc, said that despite the obstacles, the company is committed to providing safe and secure ground handling services.

Fagbemi, on the other hand, believes that the NCAA, as the supreme regulator, must interfere by enacting a safety threshold-handling rate.

“The rate we’re talking about is the minimum at which you may safely provide these services.
Even in deregulated economies around the world, criteria are set; some aren’t published, while others are.

“What we’re saying is that you may charge whatever you want, but you can’t go below a set of guidelines that will undermine the industry, company, and safety.
The NCAA is a safety and security regulatory body.
The NCAA is also the industry’s economic regulator, according to Fagbemi.

Basil Agboarumi, her equivalent at SAHCO Plc, weighed in on the proposed safety level.

Pricing, according to Agboarumi, is a result of demand and supply, however no country leaves price setting solely to operators.

“Between 2020 and now, we have seen a significant increase in forex, which used to be N350 to a dollar and is now over N500 to a dollar, and we are a large forex user.
Nobody wants to hear about ground handling service failures.
As a result, we have a responsibility to deliver not just ground handling services, but the greatest ground handling services in the world.
To do so, we’ll need the appropriate equipment.
The ground handling equipment, staff, and certification are all in constant flux.
As a result, we must adapt to global changes.
To recruit and keep your top employees, you must offer the appropriate salaries and remunerations.
We must also charge appropriately, which necessitates thorough review.” Agboarumi said.

By: Olajide B.O.Y.

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