Aviation ground handling firms in dire straits

…as unhealthy rivalry tears NAHCo, SAHCo apart

 

The aviation ground handling firms such as the Nigeria Aviation Handling Company Plc. (NAHCO) and the Skyway Aviation Handling Company Plc. (SAHCO) are in dire strait, as rate charged airlines currently are what were handed to the firms since 1986.

Managing Director of SAHCO Plc., Mr. Basil Agboarumi, disclosed this to Woleshadarenews in Lagos at the side-line of Business Aviation Summit. He said that the handling of aircraft such as B737, which used to cost $1,200 now goes for between $300 and $180 in this country. His words:

The rate that is in use was handed in 1986. Rate has to do with handling charges. What happens in most countries of the world is that there is a rate for handling that you cannot go below. Check all the countries around us. I just told you how an airline went to some African countries, they gave him their rate.

“You cannot go below that rate. Most of our airlines that have operated outside this country, they will tell you. When you go there, it is fixed. It is a standard rate and you cannot go below. The two handling companies in Nigeria before now, because of competition, have reduced their rate drastically and handling rates in this country is pathetic.”

READ ALSO:  Medview, Air Peace to resume flights to Abuja, Wednesday

 

“It is nothing comparable to what happens in other nations across the world and if you can look at it from that angle, it is capital flight for the country. What that means is that…if you look at it very well, our air fare is the costliest. If an airline should collect so much for service from Nigerians, then why would it not want to pay? He lamented that unhealthy competition has done great damage to their business, adding that it was their fault”.

Similarly, Managing Director of NAHCO Plc., Mrs. Tokunbo Fagbemi, corroborated Agboarumi, saying they have been charging ridiculously low. He, however, stated that they are coping despite the challenges of devaluation of naira against the dollar.

“You know we have our customers,” he explained. “Just be careful. We should look at the dollar to buy, not from Nigeria, but on the international market, including the devaluation over the years. It is not easy.” On price war amongst the operators, she recently said what they are charging is because it was based on agreement, but right now, they have decided to be in business, a situation that more or less strengthened their customers over them. Some of them are said to be the airlines. “That is the problem we have with ground handling business globally. They are strong customers. Those strong customers also are in the cost-cutting mood.

READ ALSO:  Air Maroc makes emergency landing, Minister condemns treatment of Nigerians

That brings a lot of pressure to us. One thing I have come to discover is to ensure that pressure on price does not come about and compromise safety and security in the provision of air services. We will champion everything to ensure that the pressure on price does not compromise safety and security.”

An aviation ground handling consultant, who pleaded anonymity, disclosed that unhealthy rivalry by investors in Nigeria’s ground handling industry has led to ridiculous charges on airlines and refusal to make upward adjustment on fees to reflect existing economic realities. He said the ugly trend has marred the ability of investors to recoup investments.

READ ALSO:  BA offer customers free flights to celebrate Nigeria @57

The price war going on has ensured that the firms are yet to review prices in so many years to reflect the changes in the economy, especially the fluctuation in the exchange rate. “We are losing a lot of money. Airlines come in and pay peanuts because of the on-going price war,” the source said.

“NCAA needs to step in; this is what CBN (Central Bank of Nigeria) and regulators do in other sectors because our airlines, when they go outside, are made to pay exorbitantly for ground handling services, which doesn’t allow them compete with those who come here and pay peanuts.

Wole Shadare