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Ground Handlers: Battling high charges amid existential threat
The aviation ground handling sector is at a crossroads. Its survival can no longer be sustained with the current handling charges. They face an existential threat, writes, WOLE SHADARE
Critical role
Ground handling plays a crucial role in the aviation industry. It encompasses various services provided on the ground to ensure the smooth operation of flights.
In aviation, the term “ground handling” refers to the wide range of services provided to facilitate an aircraft flight or aircraft ground repositioning, preparation for and upon conclusion of a flight which will include both customer service and ramp service functions.
These services include aircraft loading and unloading, passenger and baggage handling, aircraft refuelling, maintenance and cleaning, and many others.
Efficient ground handling is essential for the safety, efficiency, and punctuality of flights.
It ensures that aircraft are properly prepared for departure and arrival, minimizing turnaround times and maximizing productivity.
Ground handling also contributes to passenger satisfaction by providing a seamless travel experience, from check-in to boarding and disembarking.
Not enough attention
Despite the critical role they play in the aviation industry, aviation ground handling companies over the years may have been consigned to the short end of the stick by factors ranging from poor regulation of the sub-sector, cutthroat competition and unwillingness of local and foreign airlines to pay the right price for their services.
For years, aviation ground handling has not gotten the attention they deserved probably because they are the backend of the operations for airlines. Their work is not visibly seen but they perform critical roles that keep aircraft in the skies.
Rather than see them as critical elements of the sector, the carriers carry on as if they are not important as they take advantage of the fierce competition between the two major aviation ground handling companies; the Nigerian Aviation Handling Company (NAHCo) and Skyway Aviation Handling Company (SAHCo) to shortchange them as none of them is willing to lose a customer to the other.
Undermining each other
As a result of that, they undermine each other in appropriate charges from the carriers. They undermine each other in the fiercely competitive environment to make the business not attractive any more.
They indirectly distort the market as they now find themselves with the very unsustainable prices they charge the carriers, especially domestic carriers amid the worsening macroeconomic challenges in the country that have forced them to propose new handling rates for airlines.
There are indications that both NAHCo and SAHCO have concluded plans to announce the new charges that could change from N70,000 for the handling of B737 which the majority of the country’s airlines operate to between N200,000 and N350, 000 while CRJ and other light airplanes may oscillate between N150, 000 and 240, 000.
Backlash
Many of the handlers said the firms have always faced backlash from airlines whenever they are faced with the dilemma of reviewing charges at a time when domestic carriers have continued to increase fares by over 700 per cent in the last two years while ground handling charges remain the same for more than five years.
They said the proposed review is inevitable with the current economic challenges, especially the foreign exchange crisis and other costs of operation.
The handling companies’ mode of operation has subjected them to the dictate of the airlines that seem to underappreciate the critical role they play in rewarding the services rendered to them.
There is a huge fear that the low tariff will surely compromise aviation safety in many significant ways, which include the fact that handling companies will start cutting down on staff training, other staff-related welfare will be affected and thus a de-motivated workforce that is susceptible to engage in vices including negligence.
Not a few argued that since over 30 years that the handlers had been charging the same tariff, the cost of operations has quadrupled as the Naira continues to take a tumble against the US dollar.
Low tariff
It is observed that ground handling rates in Nigeria are the lowest in the entire African countries, if not the world and this has been a thorny issue for over a decade. This includes domestic and international airlines.
Below are rates collected from the other African countries: Guinea – $1,673 (narrow-body) and $4,715 (wide body) aircraft; Senegal – $2,250 (narrow-body) and $5,259 (wide body); Cameroon – $1,400 (narrow-body) and $4,500 (wide body); Sierra Leone – $2,250 (narrow-body) and $5,250 (wide body); Ghana – $1,500 (narrow-body) and $4,150 (wide body).
In Nigeria, the rates oscillate between $400 and $1,139 (narrow-body), depending on the negotiating power of a foreign carrier and $3,000 and $3,200 (wide-body), depending on the negotiation of the foreign carrier. These rates have been on since the late 1980s and 1999.
Most of the ground-running equipment is imported. The only local factor there is the manpower. But even the manpower also has foreign inputs.
Whatever the cost of equipment is also affecting the operational cost of these ground handling companies. Apart from equipment, which is not the only factor, the cost of training is equally huge and runs into several millions of dollars.
Certifications
Ground companies have certifications. They have more certifications than airlines. They have to be IATA Safety Audit for Ground Operations (ISAGO) certified, they equally undergo the RA3 certification. These are dollar-based training and certification, without which you cannot operate.
For RA3 certification, foreign inspectors are invited for inspection which are paid for in dollars.
Because of the categorization of Nigeria as a red zone when it comes to exports to Europe, no European carrier carries Nigeria’s exports without RA3. The RA3 certification does not cover the handlers’. It has to be done anywhere or in zones in the country where the firms operate.
Experts’ views
Chairman of Aviation Ground Handling Association of Nigeria (AGHAN), the umbrella body of ground handling companies in the country, Mr Olaniyi Adigun said the ground handling firms are working towards acquiring more equipment, saying that no foreign equipment manufacturer gives out their machines without a full down payment.
His words,“. Of course, we know our history. It’s cash and carry. I think that we operate in a cash-and-carry economy. How do you want to compete with the light of Swissport? How do you want to compete with the likes of Dnata? I want to say that I’m very sure that aviation standards are global. There is no standard for Africa. It is a global standard”.
You need to source for Forex to pay them. And somebody’s paying N70,000 to handle an aircraft. It does not work that way. Yes, they have competition amongst themselves. Aside from equipment, what about spare parts? Some of the ground-landing companies are trying to even fabricate, but again, you need to meet specifications.”
“It is an understatement that they are suffering. As I said, they will react accordingly, differently, to the details. There are rules and regulations on what ICAO, IATA, and NCAA say on how to increase the rate. Are there any justifications for the increase? Yes. What is the justification? Economic reality”, he added.
Some stakeholders have equally called for a raise in the handling saying, that most times the airlines trigger public sentiments and opinions whenever the ground handling firms come up with tariff adjustments with the carriers threatening to shut down operations.
The handlers most times negotiate with international carriers on what to pay because they pay in dollars and they allow for periodic increments to cushion inflation on the ground handlers
“In fact, for international airlines, we negotiate with them. They will do the cost with you as per the number of counters they want. Number of personnel they want. And they will also tell you that this, how much you’ll be paying this.”
“International airlines also even give you money or something in return when you meet a deadline. They call it performance. When you want to fight them, again, you cannot fight them. The ground-handling sector is highly capital-intensive. These things are very intensive. Again, unlike a manufacturing company, the ground handling company isn’t the same,” Adigun stated.
Last line
It is hoped that the NCAA will stamp its authority. There should be a minimum rate with sanction to anyone who violates it and should be treated as a saboteur to the government. Though, the sub-sector is deregulated, but the take-home of government annually is being shortchanged when appropriate charges are not collected.
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