When Workers’ Union Holds Aviation Sector to Ransom

Aviation

Last Monday, the staff of the Nigerian Aviation Handling Company Plc embarked on an industrial action that paralysed flight and cargo operations with huge financial losses in revenue and services. Chinedu Eze writes that the strike exposed the fact that handling companies are running a cartel that is injurious to the aviation industry

The strike action by workers of the Nigeria Aviation Handling Company Plc (NAHCO) last Monday has shown that if an airline is being serviced by one handling company, it cannot seek the services of another handling company even in an emergency. This was why it was difficult for airlines being serviced by NAHCO to get support from the Skyway Aviation Handling Company Plc (SAHCOL) when the airlines realised that they could not operate because the support service could not be provided by NAHCO.

The consequence was a heavy loss of revenue, distortion of flight schedules, flight cancellations and damage to the image of Nigeria in the global aviation circles.

The workers embarked on strike in response to the failure of the company to up their wages and welfare following the earlier agreement they signed with the management.

So by 1:00 am that Monday the workers withdrew their services, so all the foreign and domestic airlines that needed to be attended to were abandoned both for scheduled passenger service and cargo operations.  

Disruptions and Losses

Passengers who turned up for early morning domestic flight service and passengers on international destinations became stranded as airlines stopped operation, waiting and hoping that there could be a solution to the problem.

Nigeria’s major carrier, Air Peace, said it lost about N500 million to flight cancellations from the morning the strike started till when it was called off at about 4:00 pm.

A statement from the airline said the strike paralysed its large network.

“Air Peace, Nigeria’s leading airline, has disclosed that the ongoing strike has cost the airline over N500 million, adding that the industrial action has paralysed its operations across its large network. Neither NAHCO nor the striking union informed us of an impending strike. Our staff reported to work and noticed an ongoing industrial action. If we were informed beforehand, we would have conveyed the same to our passengers early enough.

“Now, all morning flights and other subsequent flights have been disrupted- cancelled, delayed and rescheduled. This has cost us over N500 million as we operate over 100 flights daily. Passengers are also attacking our ground staff, as they cannot fly. We have notified the flying public of the strike but it is important to stress again that the action is by the staff of NAHCO, not Air Peace. It is an action against the management of NAHCO, and Air Peace has nothing to do with it,” the statement said. 

International flights serviced by NAHCO that flew in early Monday morning at the Lagos airport, departed with empty aircraft, losing a huge amount of money in revenue. The airlines that got the information of the strike before they left their operation hub cancelled their flights like Delta Air Lines.

One of the airlines that were caught in the web of the strike was Qatar Airways, which arrived at the airport, discharged passengers and returned to its base without boarding hundreds of passengers waiting for the flight because NAHCO workers refused to service the plane.

 NAHCO and SAHCOL handle most of the international and local airlines that operate in Nigeria. NAHCO handles check-in, boarding and ramp services for several international airlines including Air France/KLM, Qatar, Ethiopian Airlines, Delta Airlines, Virgin Atlantic, and Turkish Air.

Near Monopoly

The Managing Director and CEO of Aero Contractors, Captain Ado Sanusi, disclosed to THISDAY that as NAHCO workers were on strike the airline sought to get a jet starter (equipment for starting aircraft) from Skyway Aviation Handling Company Plc (SAHCOL) but the company refused and said that the alliance it has with NAHCO and other handling companies bars airlines from seeking service of any member that is not officially the handling company of that airline. 

 Sanusi described it as a callous, pseudo-monopoly, which should not be encouraged in a free, deregulated market.

“This unfortunate strike action has caused the country a lot of hardship, including for airlines and passengers and has put Nigeria in a bad light in the international aviation circles. This calls for the review of what was recently granted the handing companies by the National Assembly and the Nigerian Civil Aviation Authority (NCAA), which in addition to increasing the cost of their services, allowed an alliance that enables them to operate like a cartel.

“If other service providers, including the airline, take a cue from that and start operating like a cartel the aviation industry will die. This is a deregulated free market, and that policy must be protected to allow for competition and for other investors who want to invest in aviation handling services to join the market. This is also a warning to address this cartel situation,” Sanusi stated.

Sanusi who was interviewed the following day on ARISE NEWS Channel, stated that the workers could have embarked on strike, disrupt the activities of NAHCO as a company, and picketed their offices but should not have extended their strike to withdrawing service for airlines, an action that has a serious implication on the security of the nation and safety threat to flight operations. He was peeved that airlines were not given prior notice by either the workers embarking on strike or NAHCO management by issuing a Notice to Air Men (NOTAM), which would circulate the information about the strike to the global aviation industry.

Sanusi called on the Nigerian Civil Aviation Authority (NCAA) to investigate those that instigated the strike and take necessary action to forestall such from happening again. He recalled that last year the handling companies demanded that the payment for their services should be increased from N20,000 per aircraft to N70,000, an increase that was approved by the NCAA and the airlines acquiesced. 

“NCAA should investigate whether the workers followed due process. Did they inform the airlines? NCAA allowed the handling company to have an alliance between the two major companies, SAHCOL and NAHCO that prevents them from assisting airlines that are not under their service. This means that SAHCOL cannot help an airline, which is serviced by NAHCO, no matter the situation. This has led to the creation of a cartel inside a deregulated market because it makes the other company not come to save the situation and it put Nigeria in a bad light. Why did they go to that level of disrupting flights? Anybody who interferes with flight operations should be charged because it threatens the security of Nigeria. NCAA should licence other players that wish to join the market,” Sanusi said. 

Increase in Cost of Service

In 2021, the federal government through the NCAA approved new safety threshold charges for services rendered by the ground handling companies, which commenced on October 1, 2021, for international carriers and January 1, 2022, for domestic operators. The increase in the cost of charges was spearheaded by the Aviation Ground Handling Association of Nigeria (AGHAN). So the NAHCO, SAHCO, Precision Aviation Handling Company (PAHCOL) and Swissport Handling Company started charging the same handling rates as their counterparts in the sub-African countries.

NCAA then approved between $1,500 and $5,000 (passenger and cargo flights) for handlers for narrow and wide-body aircraft, respectively; while domestic operators would now pay between N25,000 and N70,000, depending on the aircraft type. Narrow-body aircraft include Boeing B737, Airbus A320, ER 135 and ATR, while wide-body aircraft are B767, A330, B777, B747 and B787.

Background 

THISDAY learnt from a former Managing Director of one of the major aviation handling companies that the Air Transport Service Senior Staff Association (ATSSSAN) and the National Union of Air Transport Employees (NUATE) signed an agreement with the NAHCO and SAHCOL that they would be reviewing the welfare of the workers every five years. Last year, the unions gave notice to the handling companies but NAHCO allegedly ignored the notice. On January 16, 2023, ATSSSAN and NUATE wrote to the workers of NAHCO saying, “As you are all aware, our unions have been in negotiation with the management of NAHCO for the review of current salaries since June (2022) without any headway. 

“As all ultimatums issued by our unions have gone unheeded, and the management continues to play on our intelligence through scheduling of purposeless meetings, we have concluded that the management has clearly decided against hearkening to our cries for fairness and equity, despite overwhelming evidence in support of our demand,” the notice to the workers stated.

While it was alleged that NAHCO ignored the notice, SAHCOL was said to have negotiated with the unions. NAHCO later decided to go to court.

“What effect did the strike have on the stakeholders, including the federal government? I don’t know what NAHCO thought it would achieve by going to court. NCAA was supposed to come into this to mediate. Workers should have gone to picket the NAHCO offices and airlines should have been notified about the strike, but NAHCO did not do that. Look at the implication now, loss of revenue in operations and accommodation of passengers travelling to international destinations. People have missed a lot of engagements. Even at the cargo terminal, cargo aircraft that brought in goods were abandoned by the workers of NAHCO. That action damaged the image of Nigeria in the international aviation circles,” the stakeholder said.

According to him, going forward, handling companies should review their workers’ welfare six months before the expiration of the date. They should sit down and negotiate with the workers. He also said that in the relationship between handling companies and airlines, there must be a window the airline will have the option of seeking assistance from other handling companies. That option is not there now.

“NCAA must ensure that airlines have that option. NAHCO will lose clients to other handling companies. More companies should join the market because the aviation industry is growing. In our days, we had fewer airlines and operating aircraft in the domestic market. To me, going to court is not a solution and it is good to notice that the Managing Director of NAHCO was not heard. It was the director of the company that went to negotiate with the workers,” he said.