Mr. Basil Agboarumi is the Acting Managing Director of Skyway Aviation Handling Company Limited. In this interview with DEBORAH KOLAPO, he outlines the challenges facing handling-business in Nigeria, and proffers solutions. Excerpts:
How would you assess the Nigerian Aviation sector?
The industry is on a path of growth as there have been a lot of positive changes that have come up, which I can say are positive. We have been encouraged to look at issues that affect the industry. Last year, the country was going through a lot of restructuring but this year, we were officially made to understand that we had come out of recession.
Aviation has to do with people, movement of people from one point to another by air; and also, movement of goods from one point to the other. So, when people could not afford to pay for high rate of fare and they could not bring out money to buy goods, it affected the industry generally. Also, some airlines moved out of the country last year as a result of their inability to repatriate money out of the country.
As at last year, some airlines pulled out and that affected people moving from Nigeria to the United States. Also, Emirates Airline reduced its frequency to Nigeria and this is not positive on the movement of goods and services within this part of the world. But this year, Emirate has returned fully and some airlines have resumed for business here as well, while some are also coming in. Businesses are picking up and this is the first quarter. There has been improvement.
The Federal Government should help reduce taxes. The little money we make is used in paying taxes, which, at times, are multiple. Government should come up with a policy, which can help the system. They also need to look at the issue of taxes and there should be waiver on all the equipment
Do you agree that the nation’s economy is out of recession?
If the experts said so, then we should agree; but we are all watching. This is because, if you look at it, aviation is capital intensive. All the equipment used for our kind of business are not produced in this part of the world. We spend dollar or euro or pound sterling to bring in those equipment.
If you look at what happened with foreign exchange, for example, the dollar that is N360, it means the equipment we were buying for one naira before has become almost two naira, which is 100 per cent increase. In our industry, we have not increased tariff since then, even though we believe that we should do that because, we go to the same market; we have to pay various taxes. Also, various agencies expect us to pass through some things and this has impact on our business.
How is the handling segment of the aviation sector faring?
In handling, we have a lot of challenges and one of it is that, the segment is not well protected by the government. If you go to the other parts of the world, you will know that handling is expensive and before you go, you are expected to have made your handling arrangement and as you are coming into that country, in terms of payment, there is a certain amount you cannot go below. But in this part of the world, handling is so much watered down that most airlines are not seeing the right value for ground handling in Nigeria.
Handling business is discouraging in terms of power, facilities, equipment, right kind of man power and the manpower you need to drive this kind of business requires continuous training. The way it is, the standard is globally monitored that you cannot cut corners whether you have them or not, so you must have them to remain in business. Most times, when they talk about aviation, they just look at the airlines and people have not come out to know that handling is part of the engine room that drives the aviation sector.
Without handling, there are so many things you cannot do. If you look at the cost of one equipment needed to provide handling services for airlines, sometimes, when an airline comes on ground, it will need about five or six of these equipment to attend to an airline. At times, we have to make requisition for those equipment and it takes about three months for the company to assemble, send, and they are all abroad.
What do you expect from the Federal Government?
The Federal Government should help reduce taxes. The little money we make is used in paying taxes, which, at times, are multiple. Government should come up with a policy, which can help the system. They also need to look at the issue of taxes and there should be waiver on all the equipment. If the airline can get a waiver or air pass, we should put on all our
equipment.
Government should also make the consumers of ground handling to pay the right amount for the services rendered to them. If you quantify the services we render and what it takes to render those services, government will know that we are working and they should know the minimum capacity of what aviation can do.
How do you cope with competition in the industry?
We have to cope because competition is good for business. Although at the moment, we have two major ground handling services in Nigeria. As an opposition, we believe in consistent quality service and we have done our best to ensure that we provide some of the best handling services.
