By Dickson Omobola

A former General Manager of Corporate Affairs, Nigeria Airways, Mr Chris Aligbe, now aviation consultant in this interview, discusses the ongoing dispute between domestic airline operators and ground handling companies, which are organisations that provide services to an aircraft while on the ground at an airport.

The tasks of the ground handling companies in Nigeria include loading and unloading passengers and cargo, refuelling, cleaning, catering, baggage handling and coordinating with air traffic control to ensure a smooth transition between a flight’s arrival and departure. Excerpts:

What do you make of the recent increase in the ground handling charges? Was this an issue back in the day?

No, it wasn’t. There was only one handling company in the early days, NAHCO. NAHCO was owned, basically, by the Federal Airport Authority of Nigeria, FAAN, and had investment into it by foreign airlines. But that eventually was passed out, and NAHCO became a full private organisation. It was considered that airlines should not be investors in NAHCO because they thought there would be conflict of interest. Then, Nigeria Airways had its own ground handling company, which was called Skypower Aviation Handling Company, SAHCO. But then, eventually, during the process of privatisation, when the airline was liquidated, SAHCO was not liquidated. It had become a company, and it eventually came to the point that they thought that it was best to privatise it. And the company was privatised. Eventually, after a great revival of that company, it moved from SkyPower. It is now today Skyway Aviation Handling Company. It was bought into, or owned today, by Sifax.

Don’t you think the increase in ground handling rate is a significant challenge for airline operators?

Has there not been an increase everywhere? Airline fares have increased. Fuel costs have increased. Forex, these things have moved up. Everything has increased. Everybody has increased fares. The ground handling company is also in business, and they have to stay in business.

But you do realise that the cost naturally goes to the consumer?

What cost does not go to consumers in airline operations? Is it fuel cost? Is it the road cost? Is it forex? What cost does not go to the consumer? The airlines pass every cost they have to the consumer. It is not a rare thing when you say cost in the aviation chain goes to the consumer. Even in the local transport, cost goes to the consumer.

But over time, airline operators have complained about the cost of everything which, naturally, could lead to them cutting down on certain service deliveries…

When you are in business, you take a holistic look at the cost implications of the business into which you are going. You know that there must be ground handling companies to handle your aircraft, otherwise there won’t be flight operations. But you don’t expect a company within the loop to subsidise your operations. Airlines, like in other sectors, have challenges. There are some challenges coming from outside, some challenges coming from within. Gound handling is not one of the big cost elements in airline operation. The first cost element in airline operation is aviation fuel. In fact, handling companies are small in the scheme. When you leave the big cost elements to try to handle the other, you are the one in the loop trying to survive. For the ground handling companies, all their equipment is imported. None is manufactured here. They need forex and foreign training. It is a very professional area because any little damage to an aircraft by a handling company is a major problem. Ground handling companies face all the challenges airlines face in the aviation sector.

Whose side are you on? Is it the minister? Is it the airlines or the people?

I am on the side of justice. Justice is that the place you are pointing the finger is not the major cost of operation. The other major cost, if you list them, is about 10 critical cost elements. You find that ground handling companies are at the lowest ebb. The increase in rate is not as much as they are talking about. To handle a 737 is N75,000. This has been the cost. N75,000 is not even up to minimum wage, even though an aircraft flies in, drops and about five or six staff personnel handle the preparation for the aircraft for another flight.  There is also the equipment used for bringing out luggage. What is the percentage increase? That is the issue. Those talking about a 600 per cent increase are not telling the truth. What has happened in the industry is that when we go to the public, we feed them with lies. It is painful because our industry now is full of lies, and the people don’t decipher the truth. If anybody comes here and says the increase is 600 per cent, please ask that person to give you a calculation. I know that the increase is about 300 per cent. From 75,000, it is about 280, 290,000 for 737. But when you take the work that goes into it, the number of people that are involved, the equipment that is used, it is justified. Like I said, whatever affects airlines in terms of cost, even forex, affects ground handling companies.

Do you think there was any conversation between the operators and the ground handlers?

Yes. There has been conversation. Maybe they didn’t come to terms about the cost. The airlines want a lower cost, but the ground handling companies are saying they have to survive. When you talk about cost, during the Christmas period, people paid N500,000, 700,000, 600,000 for flights, which is not what it should be. Ground handling companies didn’t increase their charges when these things were happening. It is not ground handling companies’ increase that would cause cost to be passed on to the customers. Costs have been passed so much to the passengers on some acceptable grounds and some very, ludicrous grounds.

You are essentially saying that the uproar that followed the increase is unfounded…

The uproar that followed the increase is unfounded because of the lies surrounding it. But the fact is, everybody wants a lower price. As a passenger, I want a lower fare. So everybody wants lower fare. The airlines also are in a position to sell lower fare. But you cannot kill your ground handlers who are in the loop of airline operation because you want it. In fact, the ground handlers are subsidising the airlines. They cannot keep subsidising the airlines. They are not government organisations. What they charge 737 on international operations, they are not charging it for local operators. That is a war of subsidy.

Do you see a role for any government agency in this conversation?

No, I don’t see a role. The prices are deregulated. The NCAA is doing its best. What the NCAA is doing is saying, look, I am the regulator and I regulate people. Come together and try to reach an agreement. The NCAA cannot and will not determine prices just like it doesn’t determine for airlines because the industry is deregulated.

Are you saying the ground handlers should be able to charge as they please. We understand that they did try to increase their charges, but the minister did tell them that they should hold fire given the uproar that greeted it…

The Minister told them because he has a responsibility to ensure industrial peace. That’s why he weighed in. It is not that the Minister can control the market, it is deregulated. The NCAA is doing what it should do by saying, look, come together, try to agree so that at least industrial peace will remain.

Meanwhile, unconfirmed reports said the dispute between indigenous airlines and ground handling companies was resolved on Wednesday night as both parties settled for a 15 per cent reduction in the new handling rates, bringing the new rate to about 260 per cent higher than the former rate.

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