A former spokesman of liquidated Nigeria Airways and aviation consultant, Mr. Chris Aligbe has weighed in on the face-off between airlines and aviation ground handling companies over increase in ground handling charges, saying the increment was justified in view of high cost of operations and other challenges.
It costs N75, 000 to handle a B737 aircraft which had been the cost for some years. The ground handlers said the amount was no longer sustainable. The new rate is N290, 000 to handle a B737 which is popular among Nigerian airline operators.
Not a few believe that the work taken to handle a B737 aircraft including the number of people that are involved, the equipment that is used, is justified for an increase.
Like I said, whatever affects airlines in terms of cost, even forex affects ground handling companies.
He explained that the ground handlers are heavily challenged just like airlines and do not have any other choice than to raise tariff just like Nigerian carriers had done over the years to meet up with their costs of operations.
The face-off between the airlines and ground handling companies which threatened flight operations forced the Director-General of Nigeria Civil Aviation Authority (NCAA), Capt. Chris Najomo to broker truce.
While the airlines under their umbrella body, Airline Operators of Nigeria (AON) demanded 20 per cent reduction in the 300% charge, the ground handlers proposed 10% reduction.
The situation led to a stalemate, prompting Najomo to rule on 15% reduction which was acceptable to all the parties.
Aligbe who spoke to Aviation Metric at the weekend stated that the ground handling firms are the smallest in the chain of activities that have raised fares as claimed by the carriers that are opposed to tariff raise.
Aligbe attributed his costs of operations in aviation to Forex, stressing that like the airlines, the ground handlers pass the costs to the consumers.
His words, “What cost does not go to consumers in airline operations? Is it fuel cost? Is it road cost? Is it forex cost? What cost does not go to the consumer? The airlines pass every cost they have to the consumer. It is not a rare thing when you say cost in the aviation chain goes to the consumer. Even in the local transport, cost goes to the consumer.”
“Airline fares have increased. Fuel costs have increased. Forex, these things have moved up. Everything has increased. Everybody has increased fares. The ground handling company is also in business, and they have to stay in business.”
“When you are in business, you take a holistic look at the cost implications of the business into which you are going. You know that there must be ground handling companies to handle your aircraft, otherwise there won’t be flight operations. But you don’t expect a company within the loop to subsidise your operations. Airlines, like in other sectors, have challenges. There are some challenges coming from outside, some challenges coming from within.”
Ground handling according to him is not one of the big cost elements in airline operation.
He reiterated that the first cost element in airline operation is aviation fuel, reiterating that handling companies are small in the scheme.
“When you leave the big cost elements to try to handle the other, you are the one in the loop trying to survive. For the ground handling companies, all their equeipment is imported. None is manufactured here.
Going down memory lane, Aligbe said there was only one handling company in the early days, Nigerian Aviation Handling Company, NAHCO.
NAHCO, he said was owned, basically, by the Federal Airports Authority of Nigeria (FAAN) and had investment into it by foreign airlines.
“But that eventually was passed out, and NAHCO became a fully private organisation. It was considered that airlines should not be investors in NAHCO because they thought there would be conflict of interest.
“Then, Nigeria Airways had its own ground handling company, which was called Sky power Aviation Handling Company, SAHCO. But then, eventually, during the process of privatisation, when the airline was liquidated, SAHCO was not liquidated. It had become a company, and it eventually came to the point that they thought that it was best to privatise it. The company was privatised. Eventually, after a great revival of that company, it moved from SkyPower. It is now today Skyway Aviation Handling Company. It was bought into, or owned today, by Sifax.”