Market News

•Air Peace loses N500m as stakeholders condemn industrial action

Chinedu Eze

Flight operations by domestic and international airlines serviced by the Nigerian Aviation Handling Company Plc (NAHCO) resumed after the workers called off their 14 hours strike yesterday.

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 as its aircraft were unable to fly.

In a letter signed by National Union of Air Transport Employees (NUATE), Air Transport Senior Staff Association of Nigeria, NAHCO management and observers, stated that following a joint meeting held between the aviation unions and the management of NAHCO, the strike was called off following agreements being reached on salary increment and staff welfare.

 The letter explained: “Management has decided to withdraw the suit and vacate the earlier obtained court order; a counter offer to the union’s demands will be issued by the management before close of business on Monday 23rd, January, 2023.

“Negotiations on staff welfare will commence on Wednesday, 25th January, 2023 and all negotiations will be concluded within the week.

 “All staff should resume work immediately and no staff would be victimised as a result of the strike action,” the joint letter stated.

The aviation unions said it gave five – day notice of strike to NAHCO management last week, citing slow progress in negotiation for salary review.

 The industrial action which started in the early hours of Monday, paralysed operations of domestic and international airlines that use NAHCO’s services as the airlines were forced to abruptly stop operations when the company’s workers failed to turn up to provide service to the airlines early Monday morning. The airlines, which did not have prior notice of the strike, were told that the workers of the company embarked on strike over issues relating to their wages.

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 solution to the problem.

A statement from Air Peace stated that the strike action 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 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 500 million naira 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 added.

From Monday morning till later afternoon when the industrial action was called off, several flights that should have emanated from the General Aviation Terminal (GAT), known as Domestic Terminal 1, where Arik Air and Air Peace operate most of their flights and the Murtala Muhammed Airport Terminal Two, (MMA2) Lagos were disrupted.

International flights serviced by NAHCO that flew in early Monday morning to the Lagos airport, THISDAY learnt departed with empty aircraft, losing huge amount of money in revenue.

 One of such airlines 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.

Industry analyst and one of the passengers affected by the strike action, Alex Nwuba, explained that NAHCO staff in the early hours of yesterday walked out of international airport, saying they were on strike and would not handle any passenger.

 “Even the Qatar flight I’m traveling with this morning landed and has returned to Doha as there was no one to handle the flight,” Nwuba said.

He said passengers were frustrated as they have been kept outside to avoid a crisis and no information, announcements or emails was sent to passengers.

THISDAY learnt that NAHCO handles check-in, boarding and ramp services for several international airlines including Air France/KLM, Qatar, Ethiopian Airlines, Delta Airlines, Virgin Atlantic, Turkish Air.

In one of the message by Air Peace to its passengers, it explained that due to NAHCO strike, its flight schedule had changed.

A source at NAHCO disclosed that the management had met with the staff on Sunday over the proposed strike and there was a court injunction against the action, which the workers defied and laid down their tools.

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 jet starter (equipment for starting aircraft) from Skyway Aviation Handing Company Plc (SAHCOL), but the company refused and said that the alliance it has with NAHCO and other handling companies barred airlines from seeking service of any member not officially the handling company of that airline.

 Sanusi described it as 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 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 then 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 would want to invest in aviation handling services to join the market. This is also a warning to address this cartel situation,” Sanusi stated

A stakeholder in the industry told THISDAY that airlines would lose a projected N1 billion as Air Peace alone lost about N500 million and lamented that neither NAHCO nor the unions informed the airlines about the impending strike and noted that Qatar Airways had to depart Lagos this morning with empty plane because they were not informed about the strike, saying it was the same with domestic airlines, adding that the airlines did not have any clue that those NAHCO workers would embark on strike.

 “The action of NAHCO workers is bad because they did not give us any notice. Air Peace is losing N500 million due to cancellation of flights. We even heard that there was a court injunction to stop the strike but the workers defied it. Their action has damaged the image of Nigeria. Do you know how much it will cost Qatar Airways to come to Nigeria and return to Doha wit empty plane?” he asked.

The stakeholder also disclosed that Air Peace sought assistance from SAHCOL but the company refused because of the agreement the handing companies have, which industry stakeholders described as anti-competitive.

He described the strike action as outright sabotage for the striking workers to ignore the court injunction that directed that they should not embark on any industrial action.

Speaking on the resolution at the end of the meeting held at NAHCO Aviance House, the Group Executive Director, Dr. Sola Obabori, expressed sincere appreciation of the company to its clients who showed great understanding with NAHCO during the period of the strike action and to the passengers who were inconvenienced by the strike action.

He also expressed NAHCO’s deep appreciation to these esteemed clients, the large community of airline passengers who depend on NAHCO and to the stakeholders who have intervened in calming down the situation.

He expressed the readiness of the company to provide excellent customer experience to its clients and delight them continually pointing out that both staff and management are key stakeholders in the bigger picture.

Reacting to the industrial action, the Chairman, House Committee on Aviation, Honourable Nnolim Nnaji, called for restraints over the industrial dispute between NAHCO and its workers.  Nnaji also urged the management of the ground handling company to immediately enter into dialogue with the leadership of the union to avert further disruption of flight operations across the country.