How Rivalry is Causing NAHCO, SAHCOL Revenue Loss

The Nigerian Aviation Handling Company (nahco aviance) and Skyway Aviation Handling Company Limited (SAHCOL) are two ground handling companies in the aviation industry. The two companies enjoy a duopoly because there is no other major ground handling company in Nigeria.

While NAHCO is a publicly quoted company on the Nigerian Stock Exchange; SAHCOL used to be a subsidiary of the defunct Nigeria Airways Limited (NAL) that was privatised in 2009.

From THISDAY investigation, NAHCO and SAHCOL engage in very unhealthy rivalry that they desperately charge cheaply for their services.

When with other African countries like Ghana, Cote d’Ivoire, Senegal and others, Nigeria charges the lowest for ground handling services rendered to airlines, especially international carriers.

These two companies render services to all foreign and domestic airlines that operate in the country, but they have not grown to become major handling companies and inside sources reveal that financially the organisations are sstruggling to survive.

THISDAY also learnt that because of the fear of losing their customers to the other company, the duo allow airlines to owe them and sometimes some of the debts become stale and would not be paid and with a little threat they move over to the other handling company.
There have been calls, however, made to the Nigerian Civil Aviation Authority (NCAA) to intervene and set up minimum charges for the services rendered by these handling companies, but THISDAY learnt that the calls have not been formally presented to the regulatory authority.

When THISDAY spoke to the officials of the two companies, it was accusations and counter accusations, with each company accusing the other for being responsible for lack of cooperation between them.

But both acknowledged that business is very bad and that they are not making a good return for their services. None was willing to admit that both companies are suffering from self-inflicted wound.

A former labour activist and presently a director in one of the aviation agencies told THISDAY that if the two companies agree to cooperate, they would maximise the opportunities in the industry and sustain their operations with robust finances but expressed doubt that they would ever work together.

According to the source, such a partnership would enable them agree to have a ceiling on minimum charges for services and issues such as competence and equipment can be handle through a shared-services arrangement.

With that, the companies can operates more efficiently and with more modern equipment.

So as long as one company has more equipment and more trained personnel than the other the bitter rivalry would continue because they cannot work together to determine the prices for their services.

The acting Managing Director of SAHCOL, Basil Agboarumi in a recent interview admitted that cooperation would be the best thing that could happen between the companies, but was evasive about taking concrete steps to actualising that.

“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. There must come to a point whereby we will definitely need ourselves.

“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 better aviation industry once we begin to look at the industry from that perspective,” Agboarumi said.
He lamented that it was because the two companies are unable to come together that handling rates or cost of handling remained the same despite the devaluation of the naira, while airlines have consistently increased their fares.

But a NAHCO insider accused SAHCOL of being more desperate, noting that in the company’s desperation to take over some clients, it always offer to render services to the airlines free for six months, provides outrageous incentives to the officials of the airlines and severely undercuts its prices for the services rendered.

“This is because they know we have the equipment and the personnel but if we cooperate we will find a way round it so that two of the companies can benefit, but they have refused to understand,” the NAHCO insider said.

The rivalry between SAHCOL and NAHCO may be responsible for their exploitation by the airlines. The companies can boost their earning, improve the welfare of their workers and acquire more modern equipment if they can work together and agree on minimum charges for their services.

They can also cooperate in the use of equipment and personnel at the airports outside the major cities of Lagos and Abuja.