Reps Halt 150 Per Cent Hike Of Ground Charges For Airlines By NCAA… As Airlines, Other Stakeholders Protest
THE House of Representatives has directed the Nigeria Civil Aviation Authority, NCAA and Aviation Ground Handlers Association of Nigeria, AGHAN to put on hold, an approved increase of 150% ground rates for airlines operating in the country.
The Chairman of the House Committee on Aviation, Rep. Nnolim Nnaji(PDP-Enugu), gave the order at an investigative session with the NCAA, AGHAN, Airline Operators of Nigeria, AON and International Air Transport Association, IATA.
Earlier in the session, Rep. Nnolim said “We invited them to look at this and see what will come out of it. People have started flying and we don’t want a situation where we will get into trouble. If the ground charges are increased, flights will drop and it will affect the industry.
“We know that there is a need to increase or reduce, but decisions on issues like this, cannot be taken in isolation. It is the Dg of the NCAA, that was supposed to speak on this issue m, but since he is not here, we will talk with the directors”, he however later added that “for now, let us maintain the status quo(there shouldn’t be a hike)”.
The hearing was adjourned to Wednesday next week October 6, 2021, for further deliberations on the matter.
Earlier in his submission, on behalf of the President of AON, Alhaji Abdulmunaf Yunusa Sarina, the President of Air Peace, Chief Allen Onyema, kicked against the hike, insisting that it was unacceptable to airlines.
He stated in part that “The Airline Operators of Nigeria(AON), is deeply concerned by the potential impact the recent approval granted by the Ministry of Aviation and the Nigerian Civil Aviation Authority, NCAA, to Ground Handling Service Providers, to increase Ground Handling Charges, will have on the air transport industry and the nation at large.
“The new ground handling charges, which are expected to take effect from October 1, 2021, for international flights and January 1, 2022, for domestic flights, have been increased by an astronomical margin of between 100% and 1,200 per cent.
“Put into perspective, international ground handling charges which used to be $400 are now $5000 depending on the aircraft type. Also, domestic ground handling charges which used to be from N10,000 pee flight will now increase to between N20,000 and N70,000 depending on aircraft type.
“Sir, while the Ground Handling Companies May have their argument why they believe such an increase is necessary, we are of the opinion that the timing is rather ill-timed and unfortunate in the light of the fact that the aviation industry is barely trying to find its footing and is yet to recover from the negative impact of the COVID-19 Pandemic which continues to ravage the industry globally “.
He lamented that “Airlines ordinarily are, as of today, burdened with over thirty-seven(37) multiple taxes, charges and levies inflicted on them by various government agencies. And this already puts airlines in a very difficult situation”.
According to him, “while airlines are finding a way to get the government to streamline these multiple taxes and ease the pressure on Nigerian travellers in order to jumpstart the economy, the recent increase in ground handling charges, will only serve to inflict additional pains and increase cost on the airlines as well, as the Nigerian passengers whose disposable income, have been stretched to an elastic limit.
“The Ground Handling Companies seems to be insensitive to the plight of the Nigerian travelling public in view of the fact that this additional cost, will end up being passed on to the customers who have already reached their elastic limit because of the harsh economic situation “.
Mr. Samson Fatokun, who spoke on behalf of IATA, also kicked against the planned hike, as he decried that airlines, were already “In Survival Mode, due to devastating Covid-19 impact”.
He told the Committee, that revenue from the industry “Dropped by 66 per cent in 2020 vs 2019 in Nigeria”, as according to him, “domestic and foreign airlines are facing restricted access to Foreign Exchange, as $171million airline funds are blocked in Nigeria”.
He also told the committee that the Federal Airports Authority of Nigeria, FAAN, increased has also imposed “Passenger Service Charge by 100 per cent in 2020”, in the face of “inadequate Airport Infrastructure “.
Fatokun recommenced that the stakeholders should “Allow time for bilateral negotiations between individual airlines and Ground Handling Companies”.
Vice President of AGHAN, Ahmed Bashir Gulmah who spoke on behalf of his President, Mr Olaniyi Adigun, insisted that the hike was justified.
According to him, “The last one handling rates were reviewed in Nigeria, was in 1986 about 35 years ago! This was at a time when the United States dollar was 80k, but today, as we all know, a dollar is over N412”.
The association requested “the cooperation of the National Assembly (Committee on Aviation) to support and favourably consider the new safety threshold handling rates, which will take effect from October 1, 2021, for international operations and January 1, 2021, for domestic operators”.
