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Nigeria: Local Sector Not Ready For Opportunities In Cargo Services

With COVID-19 robbing aviation of 90 per cent passenger traffic, freight movement has become the main survival strategy of global airlines. Ground Handling operator and Chief Executive Officer of Nigerian Aviation Handling Company (NAHCO) PLC, Olatokunbo Fagbemi, told reporters that the local sector was yet to latch on or optimise freight capacity despite opportunities that abound among local carriers. WOLE OYEBADE was there.

COVID-19 has brought enormous disruption to businesses. What is it like in your operations? It is quite enormous for all of us. I remember we recorded between 20 and 30 per cent growth in the month of January 2020. It started to dwindle when the impacts of COVID-19 started here in March. We had our eyes on the development, as something happening in Asia, but couldn’t imagine it becoming a pandemic or coming to Africa. In March, we had a business contingency plan as part of our operations’ policy. We were just reviewing it in early 2020 and weeks to the lockdown. So, we had preparations in our continuity plan and how to react. We took proposals to our Board and we got their full support. That has helped us to be able to move forward. So, when the industry shutdown started, we already had our special team in place. Our dedicated staff were quite instrumental in our survival because a lot of them stayed behind and made sacrifices to ensure that things were happening. It was a smaller team doing the work of a lot of people.

As things turned out, it was cargo that picked up. Not only that, it also changed from cargo coming on freighters to cargo being loaded in passenger aircraft with seats. You can imagine how difficult that can be, moving packaged goods between seats. But our team was able to take on that opportunity and they supported the airlines. Today, we can say that we had seamless cargo operations all through. It was very tough but the board and our workers all showed understanding. As activities started picking up, we began to bring back our workers. We are grateful to God that we were still able to meet all our obligations with a good end-of-the-year for everyone. I didn’t take our staff for granted.

How much relief has come through cargoes? It was a relief actually, but did they come at the rate of 2019? No! But it is still far better than nothing. As cargo was improving, it was a ray of hope for us. It cushioned a lot of effects. More of our services had been passenger services and aircraft handling. We actually have a new cargo airline coming directly from China that we handle now. Business is beginning to pick up on every of our airlines recording improvement in cargo. We are happy for them all.

How much of a drop did you record in 2020? I won’t be able to say exactly yet because we are just closing the books for 2020. But I know that the drop was huge. At a point in time, we had 70 per cent drop. Then it began to improve. One of the other things that were a challenge for us was we having to operate at a higher cost because of the spike in the cost of dollars. In Nigeria, ground handlers charge less than others in the region. Sometimes, it is as low as 300 per cent compared to other countries. So, we should be supported as ground handlers because we have put in enough to support aviation, especially the domestic market.

We understand the challenges but there is a time we need support too. We need that support now from every quarter to ensure that we recoup all that we put into operations. Recently, we got about N70 million from the government’s palliative and we are grateful. But it is not any compared to what we have lost. Like Oliver Twists, we will ask for more like tax exemptions on our equipment, similar to what is given to aircraft. Because, these ground equipment still have to support the aircraft. Our business has peculiarities like high cost of equipment that do not have resalable value like an aircraft has. More so, there is a limited number of years that you can flog the equipment. Yet, we still pay all these duties and charges. Exemptions on duties will go a long way to help us to be able to do more. Whatever window of opportunities the government has to help us, be it zero percent loans or palliatives, they are all welcome.

How convenient is it to adjust to the dynamics of deploying passenger aircraft from freighter purposes? It has not been easy but we have had to review how we use our resources. The type of high-loaders used for freighters are different from those of passenger aircraft. So, we needed to be more strategic in deploying our high-loaders. You will need more steps and more people, unlike that of the freighters. But, it is actually easier now because most of the airlines have removed their seats.

Do you think we have been able to maximise cargo dynamics locally? Or, what do you think we should be doing differently in this regard? I think our domestic airlines should lean more towards doing cargo operations. The other thing is that we have not, as a country, structured cargo well enough to optimise benefits. For instance, there is no standard packaging yet for Nigeria. When you see goods from China, you readily know from their packaging. The same for England, India, even African countries and so on. That is a lot of work that goes into cargo packaging. Some of the procedures may depend on the government closing its eyes to some banned items. These are some of the discussions we have had with the Nigerian Export Promotion Council, so that we can standardise the packaging. Fruits that are exported to England from Africa must have been packaged up to 90 per cent from here. It is just the wrapper of the supermarket that is added on getting there. Our people must also be trained to do that. They look like small things, but they are part of the standards in the international market.

Again, a lot of people don’t know that they can export their aso-ebi, for example. People have started doing that since COVID-19. There is so much you can do without leaving your base or travelling. So, let us optimise the cargo opportunities. Nothing stops me from buying tubers of yam from Abuja and put them on the aircraft to Lagos. Only a few people do that. Some will say the airlines will not carry it. But if the produce is properly crated, yams and tomatoes among others can travel by air – for our family members or for sale. But the price has to be right and the warehouse suitable. There is a lot of agro related potential in local aviation.

By: Wole Oyebade


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