Ground handling charges: Reps put new NCAA’s approved rates on hold

  • Stakeholders’ meeting holds Oct 6 to resolve imbroglio
  • New rates shoot up handling charges

 

The House of Representatives Committee on Aviation led by Nnolim Nnaji has advised that the new aircraft ground handling rate of $3900 be put on hold till after the next meeting with the stakeholders scheduled for Wednesday, October 6th, 2021 for all parties to come to an agreement.

The new rate which shot up the handling rate of jumbo aircraft of the size of Boeing 777 series to over 1,000 percent was to take effect from Friday, October first, 2021. The current rate for the same aircraft type is $330

The Airline Operators of Nigeria, (AON) and the Airline Operators” Council, (AOC) which are the umbrella bodies for local and foreign airlines had earlier petitioned the committee for its intervention over the new rate which they considered as cutthroat.

National Assembly, Abuja

This promoted the House of Representatives Committee on Aviation to summon the Director-General of the Nigeria Civil Aviation Authority, (NCAA) Captain Musu Nuhu, and the Managing Director of the Federal Airports Authority of Nigeria (FAAN), Captain Rabiu Yadudu who asked to bring along with the Association of Aircraft Grand Handlers of Nigeria, (AGHAN) and the International Air Transport Association, (IATA) for a meeting with the committee on Wednesday, September 29, 2021, to explain the rationale for the astronomical increase.

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Nnaji in his opening remarks stressed that the committee was concerned that the new rate would eventually be transferred to the end-users, (Passengers) as it would likely reflect in airfare.

The gap between the old rate and new rate he noted, “appears too high and does not support any economic logic and economy of scale”

After deliberations on the submissions by all parties, the committee unanimously agreed that the meeting be adjourned till next Wednesday, October 6th for further deliberations on the submissions made by all parties and for Nuhu who was said to be out of the country to attend in person.

The committee was of the view that was needed to ensure that an amicable resolution is reached by all interest groups.

It would be recalled that thirty-five years after the last amendment to ground handling rates charged by aviation ground handlers, the Federal Government through the Nigerian Civil Aviation Authority (NCAA) last month approved new safety threshold ground handling charges for the ground handling companies, commencing from October 1, 2021 (international carriers) and January 1, 2022, for domestic operators.

 

Chairman, House of Representative Committee on Aviation, Nnolim Nnaji

Investigation by Aviation Metric shows that the Federal Government and the ground handling companies are losing an estimated $28 million (about N15b) annually to inappropriate pricing in the country. While the Federal Government loses enormously on taxes that would have accrued from price adjustment, the ground handlers are grappling with the huge cost of operations and running at a loss.

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This has come as a reprieve for the two major ground handling firms such as the Nigerian Aviation Handling Company Plc (NAHCO) and Skyway Aviation Handling Company Plc (Plc). The last amended rates were done in 1986.

Despite the depreciating value of Naira, aviation ground handling firms’ charges in Nigeria was said to be the lowest in the world; a situation, operators said was no longer sustainable.

A thorough analytical study shows that Nigeria offers the lowest ground handling rate in West Africa in comparison to Ghana, Cameroon, Senegal, and other Francophone airports.

In Nigeria, ground handlers like the Nigerian Aviation Handling Company (NAHCO), Plc, Skyway Aviation Handling Company (SAHCO) Plc, and others charge less than every other in the region, sometimes as low as 200 to 300 percent less.

In Guinea ground handling fee costs  $1,673  for (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).

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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 and this has been since 1999.

 

DG NCAA, Capt. Musa Nuhu

A document obtained indicated that NCAA has now approved between $1,500 and $5,000 (passenger and cargo flights) for handlers for narrow and wide-body aircraft, respectively, while domestic operators will now pay between N25,000 and N70,000, depending on the aircraft type.

Narrow-body aircraft include Boeing B737, Airbus A320, ER 135, and ATR, while wide-body aircraft are B767, A330, B777, B747, and B787. These wide-body airplanes operate in and out of Nigeria.

Another circular signed by the Director-General of NCAA, Capt. Musa Nuhu, dated September 6, 2021, with the reference number: NCAA/DG/AIR/11/16/315 addressed to “All Airlines And Ground Handling Companies” (foreign and local) set different dates for the commencement of the new charges.

Wole Shadare