FAAN’s pension liability hits over N200 billion, may hamper concession

• Expert backs national carrier, says country’s aviation market eroded

 The inability of the workers of the Federal Airports Authority of Nigeria (FAAN) to join the National Pension Commission (PENCOM) scheme in 2004 has pushed the pension liability of the agency to over N200 billion.

 The National President of Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) and President of Joint Aviation Trade Union’s Forum (JATUF) Ilitrus Ahmadu who spoke to Aviation Metric on Thursday at the second annual strategic aviation trade unions leadership conference with theme, “Synergy For Safety and Productivity Management-Labour Collaboration”, in Lagos, said, “On the pension liabilities of FAAN, you recall that FAAN did not join the new pension reforms as at 2004”.

 “Because FAAN did not join, it is a law with which they must comply. The PENCOM directed that they must comply. In the assessment to determine how much it is due for them to remit as the pension contribution of the workers and that of the management.”

 He further stated, “At the time it was determined, it was over N150 billion. I am talking about four or five years back. They went to some arrangements with FAAN to formalise and make certain remittances. I think FAAN was paying about N350 million every month. FAAN has not been able to meet up with that target. As we speak, the liability has grown to over N200 billion. As we speak, FAAN is paying workers who are in retirement under the old scheme. That is a different scheme.”

 Describing it as a bubble waiting to burst, Ahmadu described what is playing out that precedes the current administration as a dangerous thing. He noted that it is like a bubble waiting to burst someday.

 He said that informed the discussion of the various unions in the aviation industry about airport concession, stressing that the entire issue of pension liability of the agency could affect the planned concession of some of the country’s choice aerodromes.

 He disclosed that as for the issues directly tied to concession, there is no way an entity can be concessioned with this massive liability internally.

 “That is one of the things we were discussing with the former Minister of Aviation that if, as a condition, that will lighten the burden of FAAN because if you take away the major airport, then you leave FAAN with this responsibility of paying over N650 million monthly, it will not survive.”

 The ATSSSAN President equally lamented that the country is losing several billions of Naira yearly because of the Bilateral Air Service Agreement (BASA) routes that are lying fallow.

 Not a few believe that many of the air pacts that Nigeria have with other airlines are skewed against Nigeria and in favour of other nations.

 He further stated that Nigeria enjoys less than 20 per cent of the market share because of the lack of capacity by the country’s airlines to challenge any of the foreign carriers simply because of a lack of a functional national carrier.

 According to him, “We are challenged because the Single African Air Transport Market (SAATM) has started. The pilot implementation project has started in some states. If we pride ourselves as a frontline state, promoting SAATM, why are we against an investment in a national carrier when the government has determined that it doesn’t have money to invest”.

 Ahmadu equally explained that 51%-49% is the percentage for legacy, adding that that was the arrangement under which Virgin came to Nigeria.

 “Why is it different when the government threw several stakeholders open up to the industry to come in and partner with the government, nobody was interested. I think it is a fertile opportunity that we should look at. If things were not properly done in the past, there is no need to throw the baby out with the bathwater.”

 He further lamented that the lack of a national carrier for Nigeria has made smaller airlines take a massive percentage of the market share of the country’s market in West and Central Africa.

 “We have bigger airlines in Nigeria that are nowhere. That is the danger we are talking about. There is huge potential for liberalisation. As a country, we have to get our acts right because if we don’t, Nigeria will be left behind”, he added.

Wole Shadare