Ground Handling Firms Cry Out Over Low-margin Profit, Request for Special Loan, Duty Waiver
- FG received requests for duty waivers and concessional loans from ground handling companies in the aviation sector
- The operators also warned that they needed the government's assistance and collaboration to remain in business
- The chairman of AGHAN urged the federal government to provide operators with concessionary loans
Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
To facilitate company operations and foster expansion, ground handling firms in Nigeria's aviation industry have requested duty waivers and concessional loans from the Federal Government.
Source: Getty Images
The operators also cautioned that in order to stay in business, they needed the government's cooperation and support because the poor profit margin for those in the industry made doing business toxic and unappealing.
Over the weekend in Lagos, the Ministry of Aviation and Aerospace Development held a stakeholders' meeting, during which the operators spoke with reporters, The Punch reported.
Niyi Adigun, the chairman of the Aviation Ground Handlers Association of Nigeria, voiced concerns that the government has granted concessions to domestic airlines while ignoring handling firms.
The company's enormous expenditures to clear imported operational equipment at the ports, according to Adigun, were ruining their business.
He emphasized that the handling companies will be less affected by the difficult economic climate if the government takes into consideration waiving such fees.
Through the Central Bank of Nigeria, the AGHAN Chairman urged the Federal Government to provide concessional loans for industry participants.
He added,
“Aviation is a catalyst to economic development, and if you want to develop economically, all the sectors that contribute to economic development must be taken care of. The government should make this conducive for us in the name of ease of doing business.
“We are also demanding duty waivers from the Federal Government.”
“This is very important to sustain our operations. They have done so for airlines; they should also do the same for us. We also import equipment into the country—ground support equipment, pushback, and others. These things cost us hugely. If we can have a duty waiver, it will reduce our stress.”
Adigun also defended the new safety threshold rates that the ground handling companies recently demanded, claiming that the 15% decrease in their original demand was their own way of supporting Festus Keyamo, the Minister of Aviation and Aerospace Development, in his Five-Point Agenda to make the aviation sector more environmentally friendly.
He said,
“What we did was right-pricing, and I thank the Minister of Aviation and Capt. Chris Najomo, the Director-General of Civil Aviation, for their intervention.
“We need to stop this master-servant relationship when it concerns the airlines. Aviation is an ecosystem, which includes ground-handling companies and other sectors of the industry. Safety starts from the ground; no matter how well-trained your pilots are, and the level of your facility, safety can be compromised on the ground.”
Swissport chairman John Adebanjo stated the need for domestic airlines to cover the cost of the handlers' services.
He added that international flights pay more in other climes, questioning why the same could not be replicated in Nigeria by the same airlines.
In addition, Adebanjo claimed that although the cost of doing business has continuously increased over the past two years, the handling businesses have complied with the government's instruction regarding staff welfare and compensation increases.
“Within the same period, the fuel price has increased, the salaries and rate of exchange have increased, among others,” he said.
Source: Getty Images
Adebanjo also voiced his displeasure with the additional 15% drop in the new handling rate, which, depending on the kind of aircraft, increased the total new threshold rates by almost 220 percent.
Nigerian airlines, ground handling companies clash
Legit.ng reported that there is a lingering dispute between the ground handling companies and domestic airlines in Nigeria over the introduction of new charges.
After reviewing its charges in 2024, Ground handling companies also introduced a new tariff, which they say will bring the safety threshold fee to match with prices in other African countries.
This new handling charge could translate into airlines paying more than three times the former rates – from N70,000 as handling charges for a Boeing 737 aircraft to N200,000 to N300,000 and from N50,000 for CRJ to about N150,000.
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Source: Legit.ng
