Ground handling firms urge FG for duty waivers

The ground handling companies in the Nigerian aviation sector have appealed to the Federal Government to grant them duty waivers and concessionary loans for effective ease of doing business and growth.

The operators also warned that the low margin profit for operators in the sector made business toxic and unattractive, saying that they needed the collaboration and support of the government to remain in business.

The operators took turns to speak with journalists on the sidelines of a stakeholders meeting organised by the Ministry of Aviation and Aerospace Development over the weekend in Lagos.

The Chairman of the Aviation Ground Handlers Association of Nigeria, ‘Niyi Adigun, expressed worries that the domestic airlines have gotten waivers from the government while the handling companies have been neglected.

Adigun declared that the huge money paid by the company to clear imported operational equipment at the ports was killing their business.

He stressed that if the government considers waivers of such to the handling companies, it will mitigate the impact of the harsh economy on the handling companies.

The AGHAN Chairman appealed to the Federal Government to facilitate concessionary loans for operators in the sector through the Central Bank of Nigeria.

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.”

Also, Adigun defended the recent new safety threshold rates demanded by the ground handling companies, saying that the 15 per cent reduction in its initial demand was its own contribution towards the Minister of Aviation and Aerospace Development, Festus Keyamo’s Five-Point Agenda to make the aviation industry eco-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.”

Also speaking, the chairman of Swissport, John Adebanjo, said that the indigenous airlines needed to pay for the services rendered by the handlers.

He added that international flights pay more in other climes, questioning why the same could not be replicated in Nigeria by the same airlines.

Besides, Adebanjo said that the handling companies had complied with the directive of the government on salary and welfare increases for staff, while the cost of doing business had consistently skyrocketed in the last two years.

“Within the same period, the fuel price has increased, the salaries and rate of exchange have increased, among others,” he said.

Adebanjo further expressed dissatisfaction with the 15 per cent further reduction in the new handling rate, which made the total new threshold rates about a 220 per cent increase, depending on the aircraft type.

“If at all we were going to give a discount, we had wanted to give just five per cent. Then, among ourselves, we decided to give 10 per cent, but the airlines wanted 20 per cent, which we disagreed with, but unfortunately, we both agreed to give 15 per cent as a present.

“We have an understanding that in six months’ time, we will come back again. We hope that before then, the naira would have stabilised, the economy would have stabilised, and then we can take things from there,” he added.

Executive Director, Commercial and Business Development, NAHCO, Saheed Lasisi, said that the new approval would enable the handlers to remain in business but said both parties would need a review in the next 12 months.

He insisted that handlers too needed such waivers to grow their business.

He said, “We have equipment that is even up to $600,000. When we import this equipment in, we pay a huge duty. We need to have concessions on this duty payment and the spare parts too, which come from the Original Equipment Manufacturers. Sometime in a year, we (NAHCO) spend up to $1m in duty payment for just importing spare parts.

“When we get a concession or waiver, it will support our operations. With the regime of Bola Tinubu, the forex market has been streamlined, and getting dollars is not as difficult as what you had in the past. If we don’t bring in our equipment, no airline is going to fly, and we have to keep buying yearly,” he added.