TAKING AVIATION INDUSTRY IN TANZANIA TO THE APEX The importance of ground handling services and the challenges facing it. Presented to: First National Aviation Forum On: 20th September 2017 By: Gaudence Kilasara Temu

Outline What is Ground Handling Historical Background Legal and Regulatory Framework Ground Handling Services Importance of Ground Handling Challenges facing the Industry in Tanzania Recommendations Conclusion Q&A

Historical background Initially carriers provided ground handling services to each other on reciprocal basis.  Aviation industry consolidation and the need to operate more efficiently paved way to independent handlers. The Major ground handling service providers in Tanzania are Swissport Tanzania PLC (formerly DAHACO), NAS-Airco, Zanzibar Aviation and Travel Services (ZAT), Puma (Formerly known as BP), Oil Com, Prime Fuel, and LSG Sky Chefs.

Historical background More than 20 other companies are holding ground handling licences but only few such as Equity Aviation, United Aviation Services Co Ltd, Alliance Cargo Services Ltd, African Flight Services, Kilimanjaro International Caters Ltd etc. are operational albeit on a small scale. Most if not all domestic carriers such as ATCL, Precision Air, Costal Aviation, Auric Air, Nomand Aviation etc. are licensed to self-handle their flights.

Legal and Regulatory Framework Tanzania Civil Aviation Authority Act Cap 80 (R.E 2006). The Act mandates TCAA to regulate civil aviation industry in Tanzania including among others ground handling services, inflight catering and aviation fuelling. Tanzania Civil Aviation (Ground handling Services) Regulations 2012. The ground handling regulations empowers TCAA to have economic oversight of the ground handling business as well as licensing of Ground handling operators. Under the regulations TCAA is mandated to determine the number of ground handling operators at any airport.

Legal and Regulatory Framework Tanzania Airports Authority TAA owns and manages majority of airports in Tanzania except for Kilimanjaro International Airport which is under KADCO and those in the national parks or mining areas. No one is allowed to do business at such airport without being concessioned by the aiport operator (TAA, ZAA, KADCO). TCAA Board also formulates Policies that governs ground handling operations in Tanzania.

Legal and Regulatory Framework International Air Transport Association (IATA) By means of its Airport Handling Manual (AHM), IATA sets a series of standards for secure, efficient airport operations. IATA is also responsible for innovating and researching into new handling policies and security guidelines on a day-to- day basis.

Ground handling services Schedule one of the TCAA (Ground Handling) Regulations 2012 list Airport Ground Handling Services as follows: Ground Administration and Supervision: Representation and liaison services, Load control, messaging and telecommunications etc. Passenger and Baggage Handling: Any kind of assistance to arriving, departing, transfer or transit Passengers including check-in, baggage registration, loading and unloading Cargo and Mail Handling: Physical freight Handling of export, and import freight, handling of related documents, customs procedures, security etc.

Ground handling services cont. Fuel and Oil Handling: Organization and execution of fuelling and defueling operations, including the storage of fuel and the control of the quality and quantity of fuel deliveries; Aircraft Line Maintenance: Routine services performed before flight; Non-routine services requested by the airport user; The provision and administration of spare parts and suitable equipment; The replenishing of oil and other fluids. Aircraft Services: External and internal cleaning of the aircraft, toilet and water services etc;

Ground handling services cont. Surface Transport: The organization and movement of crew, passenger, baggage. Inflight Catering Services: Preparation of bar and food supplies and delivery of equipment. Storage of food and beverages and of the equipment needed for their preparation etc.

Importance of Ground Handling Aircraft safety starts on the ground therefore ground handling is essential in ensuring safe operation of an aircraft. Ground handling in aviation is extremely important as it is an integral part of an airline operation. No airline can leave an airport without undergoing most if not all the ground handling services.   Most airlines outsource from independent handlers all or at least 50% of the ground handling services as a cost saving strategy.

Importance of Ground Handling The provision of a good ground handling service contributes towards the image of an airport from airlines and other users’ perspective. Ground handling is labour intensive – the business is thus a good source of employment. Ground handling companies contributes to government coffers through payment of tax when operating profitably. They also pay other charges and levies.

Challenges facing the industry in Tanzania Inadequate airport infrastructure. Lack of sufficient workforce of skilled labour at both regulatory and operational level Lack of level playing field others are listed at DSE others are not. Lack of serious joint effort to curb theft and pilferage Small Market Size while the business is capital intensive: No much business at regional airports. Conditions set by TAA for the ground handling Tender for regional airports are unfriendly –open to only category 1& 2 handlers Domestic carriers are licensed to do self-handling- Not sure if they are paying concession fee. Ground handling business depends on the performance of carriers most of whom are struggling.  

Challenges facing the industry in Tanzania Multiple licensing requirements Ground handlers have to pay for business licence, TCAA GH License of which fee is based on the type of service applied for. Municipal taxes Skills Development Levy (SDL) In addition to rent for leased premises, handlers must pay airport operators concession fee of not less than 10% of the turnover.  

Recommendations Continue investing in infrastructure development Develop and enhance maintenance culture Invest in Human capital and skills development at all levels. In addition give incentive to companies with training facilities. Give TAA more autonomy –KADCO a success story. Increase TCAA oversight on ground handling given the changed business landscape following liberalization of the industry. Scrap off self-handling in ramp services for safety and economic reasons.

Create a level playing field –All should list at DSE. Recommendations  Create a level playing field –All should list at DSE. Focus more on airport safety and security – Any terrorist attack at our airports will not only result to loss of life and equipment but will seriously affect ground handlers and affect other sectors of the economy such as tourism etc. The government should continue promoting destination Tanzania and continue creating a more conducive business environment as this will act as an incentive to existing airlines to increase their frequencies and new ones to call at our airports and in the process create more business to ground handlers. .

Conclusion  In aviation, ground handling is very important as it is an integral part of flight operation. It will be very difficult for airlines to operate efficiently without having competent ground handlers to work with. The industry should thus be nurtured and supported so that it can continue contributing towards the growth of aviation in our country and the general economy at large.

Food for thought Does airport categorization and further issuance of ground handling licenses make sense?

Thank you for listening

Q&A