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  • Ground Operations
11 November 2022

What is the IATA Standard Ground Handling Agreement (SGHA) and What Has Changed in the Latest Edition?

A straightforward and trusted ground handling agreement is the foundation of building a successful relationship between airlines and Ground Service Providers. 

IATA's Standard Ground Handling Agreement, which is considered to be the industry contract template, has been updated for 2023 to ensure airlines and Ground Service Providers have the most current information to build a comprehensive, unbiased agreement both parties can readily agree to.  

What Is the IATA Standard Ground Handling Agreement (SGHA)?

 

The IATA Standard Ground Handling Agreement (SGHA) is an agreement between airlines and Ground Service Providers that outlines the terms and conditions of contracted ground handling services. It consists of the legal and regulatory requirements, qualitative standards, and operational details. The airline and the Ground Service Providers use the SGHA to agree on the duration of the contract, services to be rendered, the limit of liability, compliance with standards, the operational requirements, and the cost of handling. All these are then recorded in Annex B.

Airlines and Ground Service Providers are not required to utilize the SGHA; however, it is common practice for IATA member airlines and non-members alike to use the standard ground handling agreement to ease negotiation and establish the common contractual ground.

 Airlines choose to contract ground handling services under the terms and conditions of the SGHA due to its ease, reliability, and coverage. The SGHA includes:

  • Main agreement
  • Annex A (list of services)
  • Annex B (location, agreed-on services, negotiated details, and charges) or Annex B with Simplified Procedure

IATA developed a standard ground handling agreement to help airlines and Ground Service Providers set standard rules, create healthy boundaries and establish common ground such as Article 5, Standard of Work, and Article 8, Liability and Indemnity of the SGHA found in the Airport Handling Manual. They are instrumental in setting a baseline for the final contract.

The IATA SGHA not only plays an integral role in negotiations, but it is the industry contract template airlines and Ground Service Providers rely on as well. It provides an unbiased agreement, presenting a fair compromise between parties that can be adjustable and allows for a clear starting point for negotiations. 

IATA has implemented the SGHA for more than 30 years and has become a trusted resource due to its experience and expertise. You can find it in Chapter 8 of the Airport Handling Manual (AHM). Over the years, the industry has fine-tuned the agreement to include all the essential components each party needs. It is so well-established that it is globally used and recognized in courts worldwide. While some choose to use their own agreements, most rely on IATA's SGHA, as it is easy to use and helps reduce negotiation time.

What Does the SGHA Include?

 

IATA's Standard Ground Handling Agreement is a comprehensive template, including the necessary Articles to come to a working agreement between the airline and Ground Service Providers, such as:

  • Provision of services
  • Fair practices
  • Subcontracting of services
  • Airline's representation
  • Standard of work
  • Remuneration
  • Accounting and payment
  • Liability and Indemnity
  • Arbitration
  • Stamp duties, registration fees
  • Duration, modification, and termination.

What Has Changed with the 2023 Updates?

 

Within the 2023 release of the Airport Handling Manual (AHM), at its 43rd edition, is the new SGHA, which is updated every 5 years to align with the most current laws and regulations available. Some of the more important revisions are as follows:

1. Main Agreement

The Sub-Article Emergency Assistance was completely revamped to update the emergency assistance that Ground Service Providers shall provide to airlines in case of need. 

Another adjustment was made to Article 5, Standard of Work - including Sub-Article 5.6 - stating that Handling Companies shall ensure that their training program complies with AHM Chapter 11, ULDR Chapter 1.6 (tables 1.6A and 1.6B) as the minimum. 

Also, a new Sub-Article 5.10 has been created, requiring that airlines and Ground Service Providers shall implement the ground handling procedures as outlined in IATA's Ground Operations Manual (IGOM).   

In Article 11 Duration, Modification, and Termination, provisions were included for when Ground Service Providers have the right to request adjustments on handling charges due to flight frequencies, changes to the minimum wage, or if there is a change in the processes which might impact the cost. 

2. Annex A

Significant changes were made to the Services section of the SGHA. You can expect to see clarifications regarding Section 1, Management and Administrative Functions. Specifically, the airline can contact supervision services from the contracted handler. 

Changes have been made to Section 2, Passenger Services, where the AHM 815 ticketing services have been fully incorporated into the SGHA. 

One particular notation is the revision to section 2.2.3, which covers the checking of documentation required to travel. This item clarifies the type of documents, including the changes made post-COVID-19, and what Ground Service Providers are responsible for. 

Section 3.10 regarding Interior Cleaning has been completely revised. 

IATA made substantial changes to Section 6.3 Unit Load Devices (ULDs). While there are many revisions in this section, it has been streamlined and simplified. 

Section 7, Security, was entirely updated to align with changes in the ICAO Annex 17. 

3. Annex B

In Annex B, adaptations to the layout were made to make the contract more readable and easy to use. 

Watch this video where Iva Pluhackova, Head of Operations and Standards at IATA, explains what is new in the latest edition of the Airport Handling Manual (AHM) containing the renewed SGHA template.

What Is the SLA?

 

The Service Level Agreement is the agreement between the airline and the Ground Service Provider at a specific location which outlines the service delivery standards for the contracted ground handling services.

It can be found under AHM803, and it should be discussed, negotiated, and agreed upon along with the SGHA.

How Does the SLA Work with the SGHA?

 

In the SGHA, the parties agree on the services and the operational requirements, and in the SLA they agree on the expected level of service.

During the negotiations, both parties use the SLA to agree on:

  • What is to be measured (KPIs)
  • How is it going to be measured
  • How to use the results of these measurements

Using the two together is a recommended practice so that both parties know what to expect and if deliverables are being met. 

Where Can You Find More Information?

 

You can find the newly revised SGHA in Section 8 of the 43rd edition of the Airport Handling Manual (AHM)

In addition to the template, IATA provides courses to help ensure a better understanding of the new changes. The SGHA Version 2023 & SLA Refresher 2-day classroom is currently available. After completing the course, you will be able to:

  • Identify the differences between the 2018 and 2023 versions
  • Analyze the changes in the articles of the main agreement and the impact on your business and operation
  • Describe the advantages of new services descriptions of the sections in Annex A
  • Refine Annex B structure and text, reflecting the business and operational requirements
  • Set achievable and meaningful targets in the SLA, using the new template, enhancing safety and service quality through commonly agreed on targets

 

IATA also offers the SGHA-SLA and Effective Negotiation Behaviors training, which provides the foundation for writing the Annex B and Service Level Agreement (SLA). 

As airlines and Ground Service Providers, the AHM is not the only manual you may need. Learn more about IATA's other manuals.

 

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