Ground handling companies operating at the nation’s airports are groaning under low profit margins due to low tariff amid increasing cost of doing business in the country.
Consequently, aviation stakeholders have said that low profit margins would put pressure on safety and security as well as long-term sustainability of ground handling business in the country.
They argued that ground-handling companies can no longer afford to invest in innovative technology, modern equipment, recruit, retain quality manpower and training aimed at preventing incidents and accidents.
However, LEADERSHIP gathered that ground handling rates in Nigeria are the lowest in Africa as domestic operators pay between N10,000 to N20,000 for full ground-handling charges by handlers.
For instance, foreign airline operators in Guinea charge $1,673 for narrow body and $4,715 for wide body aircraft while Senegal charges $2,250 for narrow body aircraft and $5,259 for wide body aircraft.
Cameroon charges $1,400 for narrow body and $4,500 for wide body aircraft while Ghana charges $1,500 for narrow body and $4,150 for wide body aircraft.
But in Nigeria, the rates oscillate between $400 and $1,139 (narrow body), depending on the negotiating power of a foreign carrier and $3,000 and $3,200 (wide body), depending on negotiation by the foreign carrier and local airlines.
Speaking, former managing director of Nigeria Aviation Handling Company (NAHCO), Kayode Oluwasegun-Ojo, said the charges of the aviation handling companies are not sustainable to drive growth in the industry.
He explained: “If you charge for a service that is less than cost-reflective, it means you are not getting your cost back and in the long run, it will not be sustainable. Lack of sustainability for aviation has serious implications because aviation actually starts from the ground and you land back on the ground. It is the ground-handling companies that do that.
“You know that most accidents and incidents in the aviation industry actually occur on take-off and landing. It is extremely important that we take care of what happens on the ground and in this case, via the ground handlers, in charging cost-reflective tariff.
“That means you can recover cost with some margins for hospitability, including being able to pay taxes to the government. Companies that make losses will not be able to pay taxes,” he pointed out.
“If Ghana is charging about $1,500 to handle narrow body aircraft and Nigeria is charging this little, then something is wrong with our system. We must do something about helping our country and industry to grow. We have a huge market here and we must do something to boost the sector, starting from the ground handlers.”
Also speaking, assistant secretary, aviation round table, Olumide Ohunayo, said low profit margins of aviation handling companies will affect safety. He suggested that there should be a benchmark because Nigeria cannot price herself out of the region.
Aviation analyst, Tayo ojuri, said to ensure safe, secured commercial operations, ground-handling charges need to be competitive and be a true reflection of cost of operations
According to him, ground-handling charges should be determined by the market through competition to ensure they reflect the most cost-effective level for the provision of optimal ground handling services.