Airlines, ground handling firms may clash over 300% rate review

The domestic airlines under the aegis of Airline Operators of Nigeria (AON) may clash with the ground handling companies over the upward review of the charges planned to take effect by March 31, Daily Trust can report. While the ground handling firms under the aegis of the Aviation Ground Handlers Association of Nigeria (AGHAN) insist […]

The domestic airlines under the aegis of Airline Operators of Nigeria (AON) may clash with the ground handling companies over the upward review of the charges planned to take effect by March 31, Daily Trust can report.

While the ground handling firms under the aegis of the Aviation Ground Handlers Association of Nigeria (AGHAN) insist on the new charges, the AON said the proposal of a 300 per cent increase is unacceptable.

AGHAN had officially written to the AON, notifying it of the upward review for handling services blaming it on the inflation and the economic crisis.

In the letter dated February 2, 2024, AGHAN said, “Consequent to the economic reality in the country, we would like to notify the entire members of Airlines Operators of Nigeria (AON) of our intent to increase Domestic Ground Handling and Single Items rate effective from the 31st of March 2024.

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“Our members appreciate the patronage of AON members but the reality on the ground has necessitated us to adjust the rates for sustainability and safety purposes. We wish to thank all the airlines for their understanding, support, and cooperation on this matter.

“We also want to further assure airlines of our enduring commitment towards safety handling services in the country’s aviation industry, this will culminate in an improved service delivery geared towards safer skies in Nigeria.”

The letter, which was signed by Mr. Adigun Olaniyan; Chairman, Mr. Ahmed Gulmah; Vice Chairman and Prince Saheed Lasisi; Financial Adviser all of AGHAN, showed about a 300 per cent increase in the new charges.

For instance, the proposed new rates indicated that for the handling companies to provide services for a Boeing 737 aircraft or its equivalent, airlines would pay about N400,000 per flight instead of the initial N70,000.

For CRJ, Embraer, the new rate is N250,000 from N50,000, while Dash 8 or its equivalent now goes for N150,000 per flight from the former N25,000.

For its single item rates, pushback now goes for N200,000 per service from the initial N22,000, Aircraft Cooling System (ACU) per hour; N150,000 from N25,000, Air Start Unit (ASU) per hour; N200,000 from N22,000, Ground Power Unit (GPU); N180,000 from N20,000 also per hour, while repositioning increased to N250,000 from the former N28,000.

Others are towing repositioning to other terminals; N320,000 from N33,500 per towing, toilet/water service; N150,000 from N17,500 per service, tow bar repositioning/towing aircraft; N120,000 from N12,500, tractor per hour; N150,000 from the initial N20,000, mobile step; N120,000 from N15,000 per service, conveyor belt; N150,000 from N20,000 per service, while cargo per KG now rises to N25 from the initial N5.

The AGHAN also said that it had complied with the International Civil Aviation Organisation (ICAO) standards and recommended practices on aviation rates review, having met with the Nigeria Civil Aviation Authority (NCAA) and other relevant bodies before coming up with the new rates.

But operators who spoke with our correspondent rejected the proposal, which they said was outrageous.

One of the operators said, “The proposal would be too much on us going by what we are going through at the moment. This proposal is on the high side. It is not up to two years that they review their rate.”

Speaking with our correspondent, spokesman for AON, Prof. Obiora Okonkwo said while they appreciate the concerns of the AGHAN over inflation, no agreement has been reached yet.

Okonkwo who is the Chairman of United Nigeria Airlines, said, “We have not agreed on anything yet. We appreciate that everything is going up due to the inflation rate in Nigeria but we are of the opinion that what they are proposing is way out of reasonable consideration. Right now, the AON is not accepting that. We hope that we will find common ground very soon.”

The AGHAN chairman in an interview said the handling operators cannot survive at the present rate.

“As at 2021, a litre of diesel was N210 or so per litre and now, it is over N1,000. Also, the foreign exchange has dealt a big blow to us. As at 2021, the exchange rate was about N350 to a dollar, but it is over N1,500,” he said.

Aviation management consultant, Babatunde Adeniji urged the individual ground handling firms to negotiate with their customers, saying there should not be any general price fixing.

“The market is deregulated. Let the ground handling companies negotiate with their airline customers. There should be price competition.”