New handling rates: Ground handlers sign MoU on compliance to avoid sabotage
The chief executives of five ground-handling companies have signed a Memorandum of Understanding (MoU) to guide against ‘economic saboteurs’, following the approval granted by the Nigerian Civil Aviation Authority (NCAA) to increase the new safety threshold handling rates.
The NCAA had given approval for the new safety threshold handling rates to commence January 1, 2022 (for international airlines) and March 1, 2022 (for local) operators after 36 years, following the outrage by ground handling companies on the implications of charging below their costs of operations.
A joint communiqué dated December 14, 2021 to the domestic and foreign airlines, showed the resolution and MoU was signed by; Olumuyiwa Olumekun; the Ag. CEO, Nigerian Aviation Handling Company (NAHCO) Plc; Basil Agboarumi, CEO, Skyway Aviation Handling Company (SAHCO) Plc; Samuel Oluwole, director, Aviation Handling Service (AHS), Bello Salihu; CEO, Butake Resources Ltd (BRL) and John Adebanjo, the CEO, Swissport Nigeria. The signatories stated that the joint communiqué will enable sustainable and profitable ground handling rates, while also maintaining the highest standards of safety operations in the sector in Nigeria.
A document from NCAA and signed by Musa Nuhu, dated December 12, 2021 approved the discount of 25 per cent rate on the new handling charges as requested by AGHAN. The letter with the reference number: NCAA/ATRI67/C.14/III/111, reiterates that any change to these charges must be done in formal consultation with and approval of NCAA.
The handling companies through its umbrella body, AGHAN had canvassed for different handling charges for narrow and wide body aircraft. The new handling rates are between $1,500 and $5,000 (passenger and cargo flights) for narrow and wide body aircraft on international routes, respectively, while for domestic operators it was upped to 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.
Samuel Oluwole, chairman, Precision Handling Company said, the handling companies have to hold themselves accountable because the current misnomer affects them all.
According to Oluwole, there will be a technical committee in place that will be able to monitor the handling companies in the country and fines will be meted out by the disciplinary committee for any infringement. This will be done after due notification to the NCAA and in the interest of all players.
“The system we have set up is in the interest of all to survive. The undercutting of over 30 years is not leading us anywhere,” he said.
Olaniyi Adigun, chairman, AGHAN said the first attempt at implementing the new rates was abortive because of the resistance of the strong and formidable airlines who took them to the National Assembly.
“A one way ticket to Abuja now is about N80,000, while we were handling them for between N10,000 and N20,000. We needed to increase based on the economic realities on ground.
But, thank God for the minister of aviation and the present DG of NCAA who saw the realities on ground. To us, it is a win-win situation for us all, including the airlines.
“I must give kudos to the chairpersons of these handling companies for their support. In fact, we are coming out with a commitment plan in which all the chairmen will have to sign for us to move forward in this. These chairmen invested their resources in these companies,” he said.
Speaking on steps to monitor the implementation of the new rates, Adigun said, “If anyone wants to take advantage of this, then, you want to drag us backward to where we were coming from, which is about 36 years ago. If anyone compromises this, you are committing economic sabotage against the federal government. Also, what about the safety and the security issues? We have the minimum by which we can negotiate. No one can go below that.
“The association is coming out with a watertight commitment that will stipulate the penalties to any of our members that violate the agreement.
“There is going to be severe penalties not just to the ground handling companies, but also to the airlines that are out to sabotage the government. Such airline or handling company will have to pay compensation to the appropriate body,” he added.
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Also speaking, Bello Salihu, CEO, Butake Handling Company commended moves by AGHAN to bring the current price regime to be and equally tinkering a way to ensure compliance for all and sundry.
Salihu said the safety threshold was not just about the handling companies, but also about the safety and security of the country stressing that with appropriate charges, safety and security will better be enhanced.
He said, “With this, Nigeria will not continue to lose revenues and the sub-sector will be able to contribute to the growth of the industry.”
Ahmed Bashir, vice president, AGHAN, who spoke on the effective implementation of new charges said apart from signing the agreement, chairmen of the handling companies will also have to sign the third document that will specify sanction and legal departments are already working on it to fine tune the document.
Bashir said, “Once they sign the copies of the resolution, communiqué and the sanction we will make copies available to NCAA, Federal Competition & Consumer Protection Commission (FCCPC). So, if there is any violator, these documents will be presented in the competent court of law. This is what we are doing to avoid any sabotage to ensure we get the cooperation of all.”