Prospects, Issues, Concerns over Enugu Airport concession

This project is being viewed as the litmus test for the government’s broader plan to concession the “Big Four” airports (Lagos, Abuja, Kano, and Port Harcourt), writes WOLE SHADARE

The concession of the Akanu Ibiam International Airport (AIIA) in Enugu has generated various issues and has reached a critical juncture.

 The recent signing of the Enugu Airport concession has brought the long-standing debate over Nigerian airport concessions into sharp focus.

Just days ago, the Federal Government formally signed the concession agreement, transitioning the airport to private management.

At the signing in Abuja, the Enugu State delegation was led by the Commissioner for Transport, Dr Obi Ozor, while the Aero Alliance team included Engr. Chuks Aniekwe, Barrister Oyiwodu Okibe-Oga, Onyedikachi Nwachukwu, Kester Enwereonu, and Barrister Michael Nwaechie of Ivy Solicitors.

Also present from the Federal Government side were the Permanent Secretary, Ministry of Aviation and Aerospace Development, Dr Yakubu Adams Kofarmata; the Managing Director/Chief Executive of the Federal Airports Authority of Nigeria (FAAN), Mrs Olubunmi Kuku; Director, Legal Services, FAAN, Mrs Bridget Gold, alongside other top officials of the Ministry and FAAN.

Friction

While the government hails this as a modernisation milestone, it has triggered immediate friction with labour unions and raised several matters arising regarding the project’s transparency and execution.

 The Federal Government officially signed the agreement with Aero Alliance Limited, the designated concessionaire.

 The deal covers the operation and maintenance of the entire airport, including the long-unfinished cargo terminal.

 The Federal Executive Council (FEC) originally approved the 30-year concession business case on July 31, 2025.

 The unions alleged that because Keyamo signed the main deal with Aero Alliance Limited without the secondary labour contract, they view the “job security” promises as non-binding political rhetoric rather than contractual obligations.

 Despite government assurances, aviation unions (ATSSSAN, NUATE, and ANAP) have rejected the deal, calling it opaque and insensitive.

 Unions claim they were sidelined during the final negotiations. While the Minister insists that workers’ rights are protected and that no one will be retrenched, the unions argue that no formal labour agreement was signed with them before the main contract was sealed.

“We consulted unions”

The Ministry claimed it consulted unions, but the Union General Secretaries argue that only Union Presidents were involved.

Even with the ink dry on the main contract, two significant matters arising remain unresolved.

 Critics have pointed out that the government has been relatively quiet regarding the exact duration and specific performance KPIs expected from Aero Alliance.

 Not a few believe that signing a 30-year concession without a locked-in financial model is highly unusual. It leaves questions about how revenue will be shared between FAAN, the Enugu State Government, and Aero Alliance.

 Without a defined model for security fees, there is no clarity on who bears the cost of airport security—a critical concern given the region’s current security climate.

Keyamo has repeatedly stated that “no worker will be retrenched.” However, the specific Labour Protection Agreement—a separate document intended to guarantee these protections in writing—was said to have never signed.

It remains unclear what specific milestones Aero Alliance must hit (e.g., cargo terminal completion dates, passenger volume growth) to maintain the concession.

$600 million Exim Bank loan

Enugu Airport was part of the $600 million remodel funded by a loan from China Exim Bank. How much of the concession revenue will be dedicated to servicing this sovereign debt?

Feature	Detail
Concessionaire	Aero Alliance
Duration	30 Years (Correcting earlier rumours of 80 years)
Approval Date	July 31, 2025 (Federal Executive Council approval)
Worker Status	Workers will remain employees of the Federal Government/FAAN
Pending Issues	Final financial models and security fee structures are still being resolved

There is no public clarity on whether Aero Alliance inherits a portion of this debt or if the Federal Government continues to bear the full burden while the private firm takes the profit.

There is a fear that a private operator will prioritise high-yield international traffic, neglect domestic secondary routes, or increase landing fees, which would inevitably lead to even higher airfares for passengers.

There has been minimal public disclosure of Aero Alliance Limited’s technical track record, which has led to uncomplimentary remarks.

There is public confusion about Aero Alliance’s background, with some industry watchers noting a lack of a clear corporate history in Nigeria’s aviation sector compared with global high-tech firms with similar names.

 Benchmarking the Enugu Deal

When evaluating the Enugu transparency questions, the “Standard” global model would typically require a published RFP (Request for Proposal) and a clear Business Case showing how Aero Alliance plans to recoup its investment over the 30-year term.

Critics and industry analysts have pointed to a lack of a visible, competitive international tender. Transparency questions often arise when a “Preferred Bidder” emerges without a public comparison of technical and financial capabilities with those of other global firms.

In standard models (like the Delhi or Istanbul concessions), the technical scores and financial bids of all finalists are often a matter of public record to ensure the state gets the best value.

Not a few would have expected an independent economic regulator to sit between the government and the concessionaire, as part of global best practice. This body prevents monopolistic pricing and ensures that landing fees and passenger service charges remain competitive for airlines.

Currently, economic regulation in Nigeria remains heavily tied to the Ministry and NCAA. Without an independent referee, there is a risk that Aero Alliance could raise charges to recoup investments, potentially driving airlines away from the Lagos-Enugu route.

While the ICRC provides oversight on the contract, the long-term economic regulation of the “user” (airlines and passengers) remains a concern.

The Federal Government’s rationale—as articulated by the Minister and the ICRC—centres on moving away from “bureaucratic” management toward a private-sector-led model.

Keyamo has been candid that the airport is currently running at a loss, explaining that the government’s primary goal is to shift the fiscal burden of maintenance and operations to Aero Alliance, the private concessionaire.

This, he said, allows the government to stop subsidising a loss-making asset and instead receive a share of the revenue.

The FG envisions Enugu as a major international gateway for the South-East, rivalling Lagos and Abuja.

By concessioning the airport, they aim to boost connectivity by approving new regional operations from Enugu to other African states.

Last line

Keyamo is very thorough in his dealings and has repeatedly framed the Enugu deal as a transparent milestone, which is expected to serve as a window to what happens to other aerodromes slated for concession.

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