Aviation ground handling firms’ price war threatens safety

• NAHCo MD seeks NCAA’s intervention

Except an urgent intervention is done by the Nigerian Civil Aviation Authority (NCAA), the raging price war between two foremost aviation ground handling firms, the Nigerian Aviation Handling Company Plc (NAHCo) and Skyway Aviation Handling Company Plc (SAHCOL) may lead to serious safety compromise in the sector, Woleshadarenews has learnt. This would also help to restore normalcy to the industry.

A top official of one of the firms told our correspondent under condition of anonymity 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. 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.”

Speaking recently with our correspondent, the Group Managing Director of NAHCo, Mrs. Tokunbo Fagbemi, said the situation puts enormous pressure on the firm.

Her words: “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.”

She stated that there are areas they need to get the aviation regulatory body, NCAA to work on and areas where they need to cooperate.

“SAHCOL learn from us and we also learn from them,” she said. “There are areas in which we cooperate. We have to worry on issue on anti-trust in the area of price determination. This environment is free trade. However, there has to be a band that I think we need to get the regulator to come in such that we do not compete in a way that affects safety and security because that is the most important thing when it comes to air transport. We need the regulator to ensure that there is a band that is clear.”

On the issue of Lufthansa withdrawing its shareholding in NAHCo, the NAHCo boss stated that there is no problem with Lufthansa, explaining that Lufthansa is still one of their best clients.

“If you cast your mind back, a few years ago, most of the airlines began to divest from ground handling,” she recalled. “It had nothing to do with Nigeria and it had nothing to with NAHCO. It had to do with decision taken at the headquarters for these airlines to say, which business do we invest in or the one they should not invest in.

“Each one of the airlines left NAHCO on those decisions that were made at corporate level to exit ground handling not only in Nigeria but all over the world. If you look at Dnata; Dnata has picked some of these airlines’ businesses. Dnata is an arm of ground handling owned by Emirates. British Airways are not into that any more,

“So, Lufthansa in 2016 took that decision and leaving NAHCO was a corporate decision taken in 2016 that finally came into effect in 2018. In terms of what does it do to our image, I don’t know how a decision that was taken in Frankfurt, UK, that was taken for every country should be an issue if there is no mischief in telling that story or mischief in receiving that story. If Lufthansa had issues, they won’t be doing business with us.”

Wole Shadare