Business

FG upwardly reviews ground handling rates 35 years after

•Foreign airlines to pay between $1,500 and $5,000
•Local carriers get N25,000-N70,000 benchmark

After a 35-year wait, the Federal Government has approved new safety threshold ground handling charges, effective October 1, 2021 for international carriers, and January 1, 2022, for domestic operators.

According to the review, made known by the Nigerian Civil Aviation Authority (NCAA), foreign airlines shall pay ground handlers between $1,500 and $5,000 for passenger and cargo airlines. Their domestic counterparts shall pay between N25,000 and N70,000 depending on the aircraft type.

The much-awaited review may be an end to perennial underpricing and destructive competition in the ground handling sub-sector of aviation, which has cost revenue shortfall of $28.35 million or N11.6 billion (N410/$) yearly.

The Guardian earlier reported that handling companies charge between $300 to $1000 to service a narrow-body aircraft rather than $1,400 to $1600 charged in other African countries. Similarly, they also charge about $3,000 as against the $5,000 average charged in neighbouring countries for wide-body aircraft. For domestic operations, some airlines pay as low as N12, 000 to N20, 000 for aircraft turnaround.

But with the latest approval, ground-handling companies can now measure up to their counterparts on the continent.

NCAA’s Director General, Capt. Musa Nuhu, in a memo to stakeholders, dated September 6, 2021, urged “all stakeholders to ensure full compliance with the safety threshold ground handling charges. Any change to these charges must be done in formal consultation with and approval of the NCAA. Please be guided accordingly.”

Chairman, Association of Ground Handlers of Nigeria (AGHAN), Olaniyi Adigun, lauded the intervention, describing it as a timely rescue measure.

Adigun said the Federal Government has saved ground handlers from extinction because the low pricing regime was gradually killing the sub-sector.

“Income derived from our operations could not sustain us vis-à-vis the current reality on ground. Dollar rates have gone up and the equipment is foreign; 80 per cent of our training is foreign and to cap it all, the aviation industry is global.

“With the right pricing in handling rates, we will be able to provide quality, efficient and safe service delivery to our clients. We will be able to compete with any service provider and we will be able to acquire modern equipment that can facilitate handling. To me, it’s a new dawn and a new development that will inject more lives into the industry.

“I am not surprised at the performance of the minister and the NCAA DG. This is the first time in a long while the aviation industry is speaking with one voice across board. The minister himself is an aviator; he understands our plights and he knows the right thing to do,” he said.

Olaniyi added that AGHAN would follow up with a Memorandum of Understanding (MoU) that will outline disciplinary measures for violators of the directive.

“If the hospitality industry and airlines are charging various rates for their services, what stops us from replicating the same in the sub-sector? It is a win-win situation for all of us,” he said.

Vice Chairman of AGHAN, Ahmed Bashir, also commended the support given by various stakeholders towards review of the charges.

Bashir said: “The old rates have been on since 1986, which is about 35 years ago and it has remained static ever since. Can you imagine that? And for the minister to have supported our course, it shows that he loves the industry and he has been able to save the sector from collapse and history will never forget him as someone who has initiated sustainability and financial health of the sub-sector.

“The impact is that it will be able to sustain the industry, ensure stability and financial stability for the handlers. We will be able to recruit more Nigerians and increase the welfare of our staff. It will also ensure that we have better and modern equipment, develop our capacity. We will be able to initiate modern training and all these are cost effective. And, some of the training are not even conducted here in Nigeria.

“Just as we all know, aviation is internationally regulated. You have to consistently acquire new knowledge and ideas so that our personnel can be able to compete all over the world. All these are tailored towards ensuring safety in the industry,” he said.

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