A critical dispute between domestic carrier Xejet and the Aviation Ground Handlers Association of Nigeria (AGHAN) has escalated, as AGHAN withdrew ground handling services from Xejet due to outstanding debts of approximately N300 million. According to AGHAN, Xejet failed to honor agreed payment plans despite repeated efforts to recover the debts. The withdrawal of handling services has significantly affected Xejet, forcing the airline to divert some check-in luggage of its passengers to another domestic airline.
AGHAN President Olaniyi Adigun and Vice President Bashir Ahmed stated that several domestic airlines had complied with payment arrangements reached with ground handling companies, but Xejet remained "recalcitrant." The association claimed that Xejet's management failed to engage with its members in negotiations over the debts as of the previous week. AGHAN directed its members to withdraw services from Xejet due to the airline's failure to meet payment plans, despite efforts by its members to ensure compliance.
The association warned that its members would continue to deny services to Xejet until its outstanding obligations were settled. AGHAN threatened to take similar action against any other airline that failed to honor agreed payment plans for services rendered. The group expressed regret over the operational and financial challenges confronting businesses in the aviation sector but emphasized that ground handling companies were also exposed to the same economic conditions.
The latest development follows an earlier seven-day ultimatum issued by AGHAN to some domestic airlines with outstanding debts. The association had directed affected airlines to settle at least 75 percent of their outstanding obligations or risk suspension of ground handling services. According to AGHAN, the ultimatum was a result of an executive meeting with its members to address growing indebtedness of airlines to ground handling companies.
AGHAN suspended services to some airlines after they presented payment plans and commenced steps towards settling their obligations. However, Xejet failed to comply with the agreed arrangements, leading to the latest directive for its members to withdraw services from the airline. The association emphasized that it had made every effort to ensure Xejet complied with payment plans, but its management had been uncooperative.
The withdrawal of ground handling services has had significant effects on Xejet's operations. The airline was forced to divert some check-in luggage of its passengers to another domestic airline, causing inconvenience to travelers. AGHAN's decision has highlighted the challenges faced by ground handling companies in the aviation sector, particularly with regards to payment for services rendered.
The dispute between AGHAN and Xejet is ongoing, with no immediate resolution in sight. The situation may have implications for the aviation sector as a whole, particularly if other airlines with outstanding debts fail to settle their obligations. Key stakeholders will be watching closely to see how the situation unfolds and its potential impact on the industry.
Key points
- AGHAN withdrew ground handling services from Xejet due to N300 million in outstanding debts.
- Xejet's management failed to engage with AGHAN members in negotiations over the debts.
- The dispute may have implications for the aviation sector if other airlines with outstanding debts fail to settle their obligations.
