Unhealthy price competition bane of ground handling firms—SAHCOL Ag MD

*L-R: The general manager, sales and marketing, Skyway Aviation Handling Company (SAHCOL), Mr. Olaniyi Adigun, acting managing director/chief executive officer of SAHCOL, Mr. Basil Agboarumi; chairman, League of Airport and Aviation Correspondents (LAAC), Mr. Olusegun Koiki and head legal services/company secretary, SAHCOL, Mrs. Adedoyin Adeniji, during the LAAC Gateway Forum held at the Murtala Mohammed Airport, Ikeja Lagos.

The acting managing director of Skyway Aviation Handling Company Ltd, Mr. Basil Aboarumi has decried unhealthy price competition in the ground handling sub-sector saying prices are slashed to gain market share as opposed to doing it because of a cost advantage.

Speaking today at the League of Airport and Aviation Correspondents (LAAC) Gateway Forum held at the Murtala Muhammed Airport, Ikeja, Agboarumi said ground handling firms are losing a lot of money because of inappropriate pricing occasioned by what he described as “price war.”

“As a ground handling company, we are losing a lot of money; airlines coming into the country are paying peanut for ground handling services because of price war. In some countries, there are fixed prices for handling certain categories of aircraft but here there is no control; people charge as they like. Unhealthy competition exists in the ground handling sub-sector and government has to do something about it,” he said.

He also said that ground handling companies still charge old rates irrespective of the value of the naira to the dollar and some other dynamics in the economy.

“Let’s look at the banking industry for instance; there is a regulator that regulates their activities. For instance, the handling rates we pay in Nigeria has not changed over the years despite the fall in naira to the dollar and other major currencies. The airlines have consistently changed their fares, but we have not done that for so many years. We still operate with the same tariff that we have been operating up to the time naira was N165 to a dollar and regrettably today, the rate has grown more than double.

“What it costs us to buy a ground handling equipment today has grown astronomically. It is not that the cost has changed, but whereby we were spending one naira to buy a ground handling equipment before, by the time we source for foreign exchange, you will see that it has gone to about N3. That’s the situation we have found ourselves. But, the airlines still pay the same amount of money they have been paying us even before then.”

Commenting on the rivalry among major ground handling firms, the acting managing director said: “Cooperation is for the best of the industry; we as a company we have identified cooperation as the tonic to build the industry. We will continue to do our best, take the right step and initiative to ensure that what can give us the kind of aviation that we desire in the future is done.

“In other parts of the world, ground handling companies are pooling resources together; it is for us to get to that maturity stage. Even airlines are cooperating now. When you have airlines in various parts of the world, they complement each other in passenger and cargo operations. We will have a better aviation industry once we begin to look at the industry from that perspective,” he said.







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