Ground Handling: FG To Stem N15bn Loss With New Rates

  • price takes effect 35 years after amendment
  • Fresh charges range between $1,500, $5,000

 

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) has approved new ground handling charges for relevant companies.

The new rate commences from October 1, 2021 (international carriers) and January 1, 2022, for domestic operators.

Investigation by Aviation Metric shows that the Federal Government and the ground handling companies are losing an estimated $28 million (about N15bn) 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.

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.

Ethiopian Airlines cargo

Despite the depreciating value of the naira, aviation ground handling firms’ charges in Nigeria were said to be the lowest in the world; a situation, operators say 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.

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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).

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.

A document obtained indicated that NCAA had approved between $1,500 and $5,000 (passenger and cargo flights) for handlers for a 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. 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.

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Aircraft waiting to load cargo into an aircraft

The circular entitled, “Safety Threshold Ground Handling Charges,” said that the new ground handling charges would take an effect from October 1, 2021, for international carriers and January 1, 2022, for domestic airline operators.

The circular read in part: “All stakeholders are invited to note that the new ground handling rates for international and domestic operations will become effective on October 1, 2021, and January 1, 2022, respectively.

“All stakeholders are directed to ensure full compliance with the safety threshold ground handling charges. Any change to these charges must be done informal consultation with and approval of the NCAA. Please be guided accordingly.”

Chairman, Association of Ground Handlers (AGHAN), Mr. Olaniyi Adigun, commended the Minister of Aviation, Hadi Sirika, for coming to the rescue of the ground handling companies, stressing that “The Federal Government saved us from extinction because the low pricing was gradually killing the ground handling sub-sector.”

Adigun reiterated that the new threshold handling rates would help sustain the industry, ensure stability and financial stability for the handlers.

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Vice-Chairman AGHAN, Ahmed Bashir lauded all the critical stakeholders who pushed for the reform, particularly the aviation regulatory body, the NCAA.

Aviation Minister, Hadi Sirika

His words, “NCAA knows that when we are financially stronger, we will be able to sustain the industry, ensure safety and security of the industry. NCAA knows that every part of our business is capital intensive. And as we all know, safety starts and ends on the ground. You have little or no control actually when the aircraft is in the air.”

“The Minister of Aviation’s vision has always been a safer sky for Nigeria and to ensure that safety, the ground handlers are an integral part of that vision. Everything that you see that we have achieved, we give credit to the minister because the minister has acted as a father to all. It is through his vision that we achieved stability in the industry. He has brought in innovative ideas that helped to transform the industry”.

 

Wole Shadare