Mrs. Adenike Aboderin, the Managing Director of the Skyway Aviation Handling Company (SAHCO Plc) ,is the first female to head the ground handling company. In this interview by SHOLA ADEKOLA, she speaks on the harsh economic environment affecting the ground handling sub-sector, upward review of handling rates and sundry issues. Excerpts…
BUSINESS environment in Nigeria is harsh and many organisations are shutting down, what is your experience?
As one of the major aviation handling companies in Nigeria, we have also faced many challenges due to harsh economic environment, which have been evidenced by continuous increase in inflation, fluctuations in exchange rate, security concerns and many others.
We have been able to navigate these challenges through domestication of some of our ground handling equipments without compromising quality services and best international standards and practices, engaging and retaining strategic partnership with airlines, airports and other stakeholders for additional resources, opportunities and stability, and maintaining skilled and motivated workforce.
Also, we have a strong reputation for reliability, safety and professionalism, which is currently helping us to enhance our customer loyalty as well as attracting new businesses. In addition, SAHCO has demonstrated adaptability by adjusting its operations strategies and offerings in respect to changing market conditions. The flexibility helps us to weather the economic challenges more effectively.
A few years ago, the handling companies in Nigeria, through their association, Aviation Ground Handlers Association of Nigeria (AGHAN) introduced different handling rates for domestic and international airlines, there are reports again that there may be another increase, why?
We are all conversant that business environment is not static and there are factors that affect survival, strength and sustainability of any organisation in the business environment. The proposed rates increase is premised on some of these factors like the inflation rate, which has made it difficult to maintain our current pricing structure. The cost for handling equipment, local and international compliance costs, spare parts, electricity bills, insurance costs, constantly upgrading infrastructure to meet regulatory standards, increasing clients’ needs and demands to ensure safety and security compliance, staff salaries and wages, training cost, upwards review of ground rent and service charges by the airport authority and other production factors have significantly increased.
Also, the official foreign exchange rate has changed significantly and is changing on a daily basis, impacting our ability to import specialised handling equipment and other spare parts that we need for our operations.
Besides, in a bid to enhance safety in the industry and meet international standards, our technical staff, including drivers, must be adequately trained and certified and re-certified by both the Nigeria Civil Aviation Authority (NCAA) and international bodies, including the International Civil Aviation Organisation (ICAO) and the IATA’s Safety Audit of Ground Operations (ISAGO), among others.
Also, the need to improve safety and security measures in line with best practices and regulatory compliance like at the export cargo section, before now, we only applied Explosive Trace Detection (ETD) Screening on shipments meant for Europe and America, but from 2023, new industries regulations from NCAA has mandated all ground handling companies to apply same screening on all cargo going on African routes. The need for more security vehicles to escort cargo in line with the Regulated Agent from Third Country (RA3) requirements, at international airports also makes it necessary for us to review our current rates. The need to maintain our RA3 licence issued and continue to pass the security audit, which we have consistently passed in the past five years.
More so, we understand that this price increase will be difficult for our customers, but we need it to maintain the high standards of services and for our continuous operation.
Besides, the need to maintain skilled and motivated workforce for continuous high-quality service delivery is another factor we need to consider. Apart from the technical staff, the ground handling companies go through different certifications, which are periodically renewed. All these cost money, and a large portion is paid in foreign currency. All the above costs have serious implications on business operations and sustainability as we want to remain in business.
ICAO stipulates that you must consult with your clients before reviewing ground handling rates, did SAHCO comply with this recommendation?
We are in discussion with the Airline Operators of Nigeria (AON), cargo agents, freight forwarders and the regulatory agency; NCAA, in compliance with ICAO standards and regulations on the planned review.
Don’t you think any form of increase in rates now may trigger increase in airfares, thereby reducing the buying powers of air travellers?
We know that the cost of doing business has increased significantly in recent time. This has put pressure on ground handling companies and we have had to make difficult decisions about our pricing. While we know that this will have an impact on our customers, we’re doing everything we can to keep our prices as low as possible, while still providing the high-quality service that our customers expect.
Domestic airlines at different fora said they are subsidising airfares for the flying public, are the handling companies doing same?
In answering this question, we are careful not to be drawn into an argument as to whether the airlines are subsidising airfares or not. As a ground handler, our goal is to provide our customers with the best possible service at a fair price. We have a lot of costs associated with providing our services, including labour costs, equipment costs and overhead expenses.
We strive to keep our rates as low as possible, while still providing the quality of service that our customers expect. We provide a vital service to the aviation industry.
Without us, airlines would not be able to operate as efficiently or effectively. We help to keep planes on schedule, ensure that passengers and goods are safely and securely processed, and provide other important services. We understand that the cost of flying is a concern for many people, but we believe that our services are worth the price.
When do you intend to commence these new rates for your clients?
The new rates are expected to commence by April 1, 2024, but we are still discussing with the airlines who are our esteemed clients.
In what ways do you think the government can assist growth in the ground handling sub-sector?
There are a few ways that the Nigerian government could help to support the ground handling sub sector. One way would be to provide tax incentives or subsidies to ground handlers, to help offset the costs of doing business. Another way would be to invest in infrastructure improvements, such as new or upgraded facilities at the airports, to make it easier for ground handlers to do their jobs.
Additionally, the government could provide training and development opportunities for ground handlers, to help improve the quality of service. It is also possible for government to assist with low interest rates on loan facilities.
Another way the government could help the ground handling sub-sector is by streamlining regulations and processes. This could include things like simplifying paperwork and approvals, reducing red tape, and making it easier for ground handlers to work with other agencies, like customs and immigration. Streamlining regulations could make it easier for ground handlers to operate efficiently and effectively, and it could also reduce costs.
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