Skyway Aviation Handling Company (Sahco) Plc is demanding a new fiscal regime that exempts investors in the ground handling and warehousing sub-sector of the aviation industry from paying VAT as well as Custom duties on imported technology, machines and spare parts as part of new incentives to grow the sector and create more jobs for Nigerians.
Managing Director of Sahco, Mr. Basil Agboarumi, who stated this yesterday while conducting aviation journalists on a facility tour of the company, said the tour was necessary to showcase the potential within the company following the announcement of the Initial Public Offer (IPO) for the sale of 406,074,000 shares, which took effect on Monday, November 12, 2018.
He, however, lamented the exorbitant cost (in foreign exchange) invested on imported equipment used in the ground handling industry, saying while cost of operation had gone up astronomically in the last two to three years, ground handling firms were, however, constrained in increasing their charges or fares on customers to reflect the economic realities of the time as the majority of the customers (especially local airlines and exporters) lacked the capacity to pay what the industry considers as appropriate pricing for services rendered by ground handling and warehousing firms in the aviation sector.
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“We need fresh incentives from the Federal Government to grow this sector and create jobs for our citizens. If the local airlines are granted incentives or waivers by the Federal Government on VAT and on Custom duties on imported machinery and parts, then ground handling firms who handle the most critical job for the airlines deserve to be also considered for such waivers.
Honestly, the safety of an airline starts from what happens on the ground – on what we do, on the machines and services that we render.
The recession came and all the hard times and we were making investments on equipment yet we couldn’t increase our fares. Something is wrong with the industry because ground handling firms must survive. So government should look our own way and treat us the same way it is treating the airlines,” Agboarumi said.
He said in the last couple of years, Sahco had recorded tremendous growth, remarkable improvements and added value to the development of Nigeria’s aviation industry.
He said Sahco’s market share grew from 21 per cent in 2009 to over 40 per cent at present, while revenue had grown by over 100 per cent. According to him, the company has maintained a stable operating performance with a compound annual revenue growth rate of 4.43 per cent.
He said by December 2017, the company had recorded improved profitability with a five-year average operating profit margin of 12.1 per cent and 11.6 per cent respectively