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Nigeria's leading finance and market intelligence news report.

FG approves new aviation ground handling charges after 35yrs

…as operators commend Sirika

The federal government has approved new aviation safety threshold charges for ground handling companies after 35years since it last amended the rates.

The new charges which will bring relief for ground handlers are expected to commence from October 1, 2021, for international carriers, and January 1, 2022, for domestic operators.

This was contained in a circular issued by the Nigeria Civil Aviation Authority, (NCAA) made available to BusinessDay.

The last time Africa’s biggest economy amended its ground handling rates was in 1986.

With this approval, the Nigerian Aviation Handling Company Plc (NAHCO), Skyway Aviation Handling Company Plc (SAHCO), Precision Aviation Handling Company Limited (PAHCOL), and Swissport Handling Company, can now charge the same handling rates as their counterparts in the sub-African countries.

Before now, ground handling companies lamented over low operating charges, which they said could drive many operators out of business.

The document indicated that NCAA has now approved between $1,500 and $5,000 (passenger and cargo flights) for handlers for a narrow and wide-body aircraft, 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.

Read also: How Nigeria can enlarge cargo base through airports

Olaniyi Adigun, Chairman, Aviation Ground Handling Association of Nigeria (AGHAN) commended the minister of Aviation for having the foresight to come to the rescue of the ground handling companies.

Adigun said the federal government saved gro0und handlers from extinction because the low pricing was gradually killing the ground handling sub-sector as income derived from their operations could not sustain them vis-à-vis the current reality on the ground.

“Dollars have gone up and these equipment are foreign; 80 percent of our training is foreign and to cap it all, the aviation industry is global. Low control is global anywhere in the world; the same training and requirements for Africa and anywhere in the world. Most of what we do requires dollars and for you to even operate in this sector, you must be certificated, which can only be achieved through training,” he explained.

Ahmed Bashir, vice chairman, AGHAN also lauded the efforts of the NCAA for reviewing the current safety threshold handling rates and ensuring compliance with the International Air Transport Association (IATA), the International Civil Aviation Organisation (ICAO) Safety, and other international bodies.

He noted that to ensure that the ground handlers are financially stronger and remain a critical component of the industry, NCAA tried to ensure that the industry doesn’t collapse, adding that without the ground handlers, NCAA will also be out of business.

“You cannot buy modern equipment if you are financially weak, you cannot attract and retain quality manpower if you are economically weak. So, the economic regulation is to ensure that we have a healthy and vibrant industry,” Bashir added.

Olaniyi Adigun hinted that with the right pricing in handling rates, ground handlers will be able to provide quality, efficient and safe service delivery to its clients and be able to compete with any service provider gradually.

Adigun also assured that with the new pricing rates, ground handlers will be able to acquire modern equipment that can facilitate handling.

He said with the old regime, the government and service providers were losing money, and with this, they could not attract quality staff and carry out efficient training.

He said with the new price regime, operators are on the right track.

“The government is getting five percent of our total annual revenue and with more money; we will have improved manpower, create more jobs for teeming Nigerians.

“At it is, we have a lot of unemployed youths, but we are not able to attract them and even the ones that we have, we couldn’t retain them. There will be better service delivery, safer sky, and encouragement of more investors to come in,” Adigun said.

The Federal Government through its agencies gets five percent from ground handlers’ annual revenue.

Before the new regime, an operation that cost $4,000 elsewhere, was done by ground handlers in Nigeria at $400. At $4,000, the government’s five percent is about $200, while the Nigerian Government gets just $20.

A circular signed by 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), with the subject: ‘Safety Threshold Ground Handling Charges,’ said that the new ground handling charges would take 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 1st October 2021 and 1st January 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 in informal consultation with and approval of the NCAA. Please be guided accordingly.”

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