Ground handling firms propose 300% rate hike for domestic flights

Ground handling companies operating in the aviation industry have proposed a 300 per cent hike in handling charges for domestic flights, Daily Trust can report. The operators in the aviation industry are looking at November for the new rates to take off subject to regulatory approval as they cite inflation and the increasing cost of […]

Ground handling companies operating in the aviation industry have proposed a 300 per cent hike in handling charges for domestic flights, Daily Trust can report.

The operators in the aviation industry are looking at November for the new rates to take off subject to regulatory approval as they cite inflation and the increasing cost of operation. 

Daily Trust reports that the operators have been on the issue for quite sometimes.

Earlier in February, the operators under the aegis of Aviation Ground Handlers Association of Nigeria (AGHAN) had written to airlines over the proposal to increase handling charges.

• NNPC Foundation launches free cancer screening programme
• Nigeria’s agro-industry faces $182bn financial deficit –Stanbic-IBTC

In the letter dated February 2, 2024, addressed to the President, Airline Operators of Nigeria (AON) with the head: ‘Notification of Increase in Domestic Minimum Handling Rates in Nigeria,’ stated that the review was necessary due to the economic reality in the country, which it said had nosedived since the last review was made about three years ago.

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 300 per cent increase in the new charges when compared to the old rates.

At the moment, the handling companies charge 35,000 per flight for full handling and 25,000 for ramp handling on a Q400 aircraft. For CRJ 900, the companies charge 71,000 for full handling and N50,000 for ramp handling.

Also, for Embraer 190,N100,000 is charged for full handling and N70,000 for ramp while B737, full handling costs N100,000.

However, the operators’ argument was that over the years, the airlines have continued to hike their fares, saying the present rates are no longer sustainable.

To handle an aircraft, a handling company would require a full complement of about 15 staff comprising six baggage handlers, two for check-in, two for aircraft appearance(Cleaners), one load control officer, one ramp coordinator and three ground support equipment handlers.

Chairman of AGHAN, Mr. Olaniyi Adigun, while justifying the proposed increment said, “We are all in the same economic environment as the airlines, but while other sectors such as catering and fueling have adjusted, ground handlers have been left behind.”

According to him, ground-handling firms provide essential services, from loading and unloading to aircraft pushback and power supply.

These services require substantial capital investment in specialised equipment and training, most of which are priced in foreign currency.

Adigun emphasised, “Ground-handling equipment, from GPUs (Ground Power Units) to RA3 and ISAGO certifications, all come with costs denominated in dollars,” adding that the dollar-naira exchange rate, diesel prices, and high taxes compound these costs, leaving ground handlers with thin margins.

Adigun called for tax waivers and customs rebates on imported equipment, explaining that reduced import costs would enable ground-handling companies to pass savings onto airlines, which could potentially stabilise rates.

“High taxes inflate the cost of business operations, which in turn impacts service rates. Reducing these taxes would not only help our sector but could boost the wider economy,” he said, arguing that tax cuts could stimulate demand, support job creation, and help reduce inflation.

An airline operator who spoke with our correspondent in confidence confirmed that one of the operators had written to his airline but said the matter would be looked into at the level of AON.