Nigeria Has Lowest Ground Handling Charges In Africa -Fagbemi
In this interview, the Managing Director, Nigerian Aviation Handling Company Plc (NAHCO Aviance), Mrs. Olatokunbo Fagbemi, bares her mind on several pertinent issues in ground handling operations, giving detailed responses on other pertinent issues in the industry.
What is impact of COVID-19 on the ground handling companies, especially at NAHCO?
Last year was a very interesting and challenging one. At this time last year, we predicted growth for the year. If you look at our figures which were published at the beginning of the year, we have about 20 to 30% growth in the month of January, but by the end of the quarter it dwindled a bit because of COVID-19.
The impact of COVID started in March, but we had our eye from November/December 2019. We were observing the activities but we didn’t imagine it was going to be as bad as it was. We knew something was happening globally, especially in Asia, but we never thought it would be like this. As at March last year, we had a business contingency plan and business continuity plan as part of our operational policy, but we were just reviewing it early 2020.
One of the things we did weeks before the lockdown, was to do business continuity plan, reviewing it, and looking at possibilities if anything happens – what do we do? How do we shutdown we had that and we took it to our board.
Luckily, we have a very good but strong board with good public governance because this is just like going out of what we planned for because we have an approved budget and revenue. We had to do things differently and we had full support of the board, we had meetings with our managers to discuss.
Given the tough economic times in the country, what sacrifices has NAHCO made to cushion the effects on the aviation industry as it affects operations of the company?
When the lockdown started and shut down of the aviation industry. We already have everything in place and also, kudos to our team we had people working for months in maintenance because without activities, how are going to fund everybody and then there’s also issue having coming around to our facility even when there is need for social distancing. We don’t even know what was happening, so we had to create a template that each units have people to stay. I want to use this opportunities to praise our stuff because without them, we would have not survived, we won’t be talking as we’re talking now, and a lot of people had to make sacrifice to stay behind not moving back and front, to be able to ensure that things were happening in the company.
For example, our maintenance team that stayed on ground, use that time to refurbish our equipment painting cleaning up the area. So, we had a smaller team doing the work of a bigger team and that is the sacrifice for those that did that and as as things evolved it turns out that it was cargo that picked up and not that cargo just picked up but it changed on cargo coming on freighters to cargo first loaded in the aircraft with the seat on it which is very difficult even while we are talking about social distancing even as the cargo were not fit for movement within the aircraft. So you can imagine how difficult it is talking about social distancing, everything is tight, but our team was able to do that, to take on that opportunity, and support the airlines. And today we can say that we have seamless cargo operation all through and that has helped us.
During the pandemic and shut down, activities were still going on at ground handling companies; was there any loss in revenue and what was the lesson learnt?
Yes, we lost revenue. We will publish our figures soon and we are not the only ones that lost revenue, everyone in the industry lost revenue. Nevertheless, the pandemic actually taught us to do things differently. How to manage our enterprise as a whole differently.
So, we also had to go back to our board and let them know these are the realities and we had the support of the board to review our outlook for the year, things that were not tenable and look at how we can move forward because last year was supposed to be a year of consolidation because we started with our financial plans. We had these investment plans to keep investing in our equipments. We did some but we couldn’t do it to the level we actually wanted. We still needed support of the board to help us achieve our intended plans.
Get getting back to the board to review our plan for the year and coming back to people to see how do we move forward? Because not everybody can come to work.
First, there’s nothing for some people to do. So why do we come to work? When transportation is tough, but then when you are needed you will be called upon and you have to be available.
We had to work in a scheme which we reviewed through our human resources, so that some people were at work and others were at home. As business began to increase we began to call people back.
During the year we met all obligations to our staff. Yes, we actually worked for those that were at home and at the end of the year, we were grateful to God that everything we normally give to our staff at the end of the year, we are able to ensure that everybody got what they deserved.
How was the experience with lots of people around the warehouse, how were you able to ensure that safety is achieved on your facility?
It has been tough with everybody with people coming in to claim territory and customer’s right. I want to appeal to our customers that we don’t have anything against them but this is about their safety and our safety. So what do we want, we want anyone coming to our warehouse complex to wear their nose masks and use sanitizers.
We know we have people from different levels, different education background and exposure. We all know that Covid-19 does not know whether you are educated or not, male or female.
It is a challenge that we had, though we had conversation with the Federal Airports Authority of Nigeria (FAAN) on access control plan where less people will be allowed in for easy control. I know that there is a system that FAAN is working on and we pray that they will finish it soon. The system is to automate movement into this place and to limit the flow of people but if people still come into our warehouse we have a responsibility to ensure that the COVID-19 protocol guidelines are followed. We just need continuous support because we have people from diverse area we just need continuous support from everyone. Nobody is fighting anyone all we want is to observe the COVID-19 protocols so we can fight this virus together.
Last year, the pandemic took us through a lot of thoughts and we had to change our Standard Operating Procedure (SOP). We worked on our SOP even before Nigerian Civil Aviation Authority (NCAA) gave directives. Once anything is out from International Civil Aviation Organization (ICAO) or once NCAA sent anything out. We are continuously working on our SOP to ensure that everything we are doing was in line with all these changes.
I want to also recognize the NCAA and other agencies for the workshops organized online with stakeholders to be able to to look at what is happening. I think this is one of the things that aviation industry must not lose.
On the financial aspect, what was the relief, when the cargoes start coming in?
Cargoes started to come and we were relieved from the burden but did it come at the rate of 2019, but it still better than nothing coming in. So, as it came and was improving it was a ray of hope for us to know that we are on the right track and it cushioned lots of effects. As you know most of the business in aviation is passengers services. As our airlines have an improvement and we are happy for them and we are ready to support them.
In percentage how many percent would say the company lost due to the pandemic and to what extent will the N5 billion palliative by federal government go in dissipating the effect of the pandemic on businesses?
I realized that at one point in time, we were recording about 70% loss when it was at the peak of the COVID-19 and nothing was happening, later it began to drop to about 20%. Well, we need to finish the year, when we finish it we will practically say COVID has impacted everything, because apart from January even though we didn’t realize it as such in Nigeria, there was an impact because cargo was going down.
Cargo traffic goes down during the Chinese Chinese New Year, which is around February and it really did.
Given the tough economic times in the country, what are the challenges been faced by NAHCO and how has such challenges be dealt with?
One of our challenges in which we had stakeholders meeting on was that we are doing things at a higher costs as a ground handling company, because dollar has gone up and cost of everything is up. In Nigeria, we charge less than every other person in the region, sometimes as low as 200 to 300 percent less.
So we should be supported as ground handlers because we have put in enough to support this business, especially the domestic market.
We understand the challenges but we also know that there is a time when there is needs to be support. And we need that support now from every quarters.
Regarding the support, the Federal Government has made available 5 billion for the aviation industry which includes the ground handling companies to be able to acess it, how has this support been able to cushion the effects of the COVID-19 Pandemic on your business?
Well, we have been given a bailout fund and it’s about 70 million, but if you look at how much we’ve lost, it’s not much. However, we’re grateful for anything that is given. It is better to have something than to have nothing but as Oliver Twist as we are thanking the Aviation Ministry, the federal government, Central Bank of Nigeria (CBN) and the Minister of Fnance, we also hopeful that some more as we have been told will be given to ground handling companies.
We need to do everything possible and work within our business environment, to ensure that as an organization, we optimize our revenue in whatever form we can do. That is what we will continue to do and serve our clients better such that we are sure that our clients will be able to support us. We also applied, we wrote a letter during the pandemic as the Association of Ground Handlers of Nigeria and we asked for tax exemption on our equipment, similar to what is given to aircrafts.
If the aircraft are given zero duties, why should we also not enjoy such privilege? We are also looking at our tax for some form of tax exemption.
We will like more because of the peculiarities of this business that we’re into. So, it is high cost in terms of equipment, the equipment do not have resale value like that of an aircraft’s. And there are limited number of years that you can flog it for and you still pay all these duties and charges. If we will have exemptions on duties, it will go a long way to help us to be able to do that and whatever window the government can give to us we will be happy. Even if even it is zero percent loan, more palliatives, anything that can help our business to continue to support the airlines, we will do it and be happy to do that.
NAHCO and other ground handlers have built a working relationship in recent times, however, some stakeholders have described this as a monopoly. How do you describe your relationship with other ground handlers?
Well, it is good for organizations to work together and to ensure it is done legally. For example, right now, we have an Association of Ground Handlers of Nigeria, we push for palliative, for tax exemption, push for a lot of things. I want to believe that some of our inputs as led to this palliative and it has been shared to everyone that has a ground handling company including people that are not operating that business.
So, we are looking at how we can work together, there are so many things we can do together, we can share resources together and optimize our resources as is done in other places. We can have collected trainings together that will bring in good practice together.
Now, we look forward to doing that and this can also be used to set a standard for the industry such that it is better for the industry as a whole in terms of NCAA, we have always been getting a lot of support from them on diverse issues we reach out to them on not just on tariffs but with our relationship with them with airlines, aviation security issues and access issues and even some issues we have with FAAN sometimes we used to discuss it with the NCAA. NCAA is the body responsible for civil because we are dealing with a lot of foreign airlines there is always a place where we meet.
For example, airlines are all under the Civil Aviation Authority of the country both foreign or domestic and they are interested in what is happening when it comes to exports. So, they come through NCAA when they do their audits and then they come to us and that how we move forward. NCAA is also looking at licensing various aspects of the business. So far, we do not have any complaints. `