Nosa Aituamen
Ground handling companies within Nigeria’s aviation sector are urgently appealing to the Federal Government for crucial support, citing a toxic business environment marked by low profit margins and escalating operational costs.
They are demanding duty waivers on imported operational equipment and access to concessionary loans to ensure their survival and growth.
In recent interviews, key figures within the Aviation Ground Handlers Association of Nigeria (AGHAN) and major companies like Swissport and NAHCO highlighted the severe financial pressures they face.
Chairman of AGHAN, Mr. Niyi Adigun, pointed out the disparity in government support, noting that while indigenous airlines have benefited from customs waivers for nearly a decade, ground handling companies, which make substantial investments, have been overlooked.
The substantial costs associated with clearing imported equipment are crippling their operations, he said.
The AGHAN chairman further called on the government to facilitate concessionary loans through the Central Bank of Nigeria (CBN), enabling access to single-digit interest rates.
He emphasized the aviation sector’s role as a catalyst for economic development, arguing that all contributing sectors must be supported to foster ease of doing business.
The recent implementation of new safety threshold rates, a revised figure following ministerial intervention, underscores the sector’s financial distress.
While the companies initially sought a higher increase to offset the country’s economic downturn, they ultimately conceded to a 15% reduction in their proposed rates, contributing to Minister Festus Keyamo’s five-point aviation agenda.
Chairman of Swissport, Otunba John Adebanjo, echoed these concerns, emphasizing the need for airlines to pay fair rates for ground handling services.
He highlighted the inconsistency in pricing, where Nigerian airlines pay significantly higher handling rates in other countries but resist similar adjustments at home.
Otunba Adebanjo also noted that ground handling companies have complied with government directives on salary and welfare increases, while facing skyrocketing operational costs.
Executive Director, NAHCO, Prince Saheed Lasisi, also stressed the necessity for duty waivers on imported equipment and spare parts.
He revealed that NAHCO alone spends up to $1 million annually on duty payments for spare parts.
According to him, like others, highlighted the need for mutual review of the rates in the coming months, based on the economic realities of the country.
Vice chairman, AGHAN, Mr. Ahmed Bashir expressed gratitude for the intervention of Minister Keyamo and Director General Chris Najomo, which resolved the rate issue after nearly a year.
He emphasized the industry’s commitment to safety and transparency, stating that the new rates were implemented following thorough cost recovery analysis, stakeholder engagement, and adherence to non-discrimination principles.
The ground handling companies anticipate that the new agreement, which includes provisions for annual reviews and debt settlement by airlines, will provide a much-needed financial respite.
They remain hopeful that the government will recognize their critical role in the aviation ecosystem and provide the necessary support to ensure their sustainability.