Salary payment, running costs in FAAN rest on Lagos, Abuja airports
- Abuja, Lagos airports’ closure dims May salary payment
- Expert highlights agency’s survival plans
Chairman, NIGAV Centre and Airport Business Summit, Mr. Fortune Idu disclosed that the outbreak of COVID 19 pandemic has taken a serious toll on the fortunes of the Federal Airports Authority of Nigeria (FAAN), describing it as the strongest player within the nation’s aviation industry.
To him, the dilemma of FAAN is that whereas it has 22 airports in its kitty, the burden of paying both salaries and running costs of the entire airports sadly rests on the revenue generation of just two of the airports.
The survival of FAAN he stated is hinged on three aspects namely – State Intervention, FAAN recovery essentials and closing wastage gaps, just as he pleaded with the Federal Government to assist the agency in the recovery of outstanding debts currently owed it by airlines, agencies and states.
He called on the Federal Government as a matter of urgency to design and implement a financial Intervention process to support airport infrastructure projects, re-investing its internally generated revenue into airport development and introduction of annual airport development levy to be paid by states or private airports to FAAN as the airports development authority.
The said levy, he advised should be used to set guidelines and monitor airport development operations nationwide as required by its statutory obligation.
He noted that the situation led to recent outcry by its Management that if the lockdown occasioned by the pandemic continues, it might find it difficult in meeting its salary obligations for the month of May amidst fear of downsizing.
This revelation, according to Idu did not only send shock waves to the over 12,000 income earners on the payroll of the authority comprising of both active staff and the retirees, he said the ripple effect were also felt by other agencies and business that derive their revenue from FAAN’s good financial performance.
Speaking to Woleshadarenews, Idu said it is rather unfortunate to note that in the aviation industry, FAAN is the only airport authority with such a peculiar business model of airport subsidization.
His words, “It must be emphasised here that the critical position of FAAN as the pillar of the fragile and slowly developing Nigeria aviation sector requires that careful consideration be made by government in taking decision concerning the organisation and as such, retrenchment of staff cannot be considered in this circumstance but serious effort should be made to reposition FAAN to save the industry”.
He called on the airport authority to begin the design and the implementation of a private sector-like business model so as to make at least 10 out of its 22 airports self-sustaining or viable bearing in mind that in practical terms, not all airports can be viable as some will merely play social and economic support roles which are catalysts to development of other related businesses which will not enhance their own bottom-line.
He counseled FAAN to pursue with vigour, the improvement of non-aeronautic revenue and bring it up to 50 per cent in its total airport revenue, stressing that the authority urgently needs to lead a national drive for full scale aero logistics development with special investment focus on agro logistics as a way to improve cargo services and revenue.
He reiterated that the airport authority should aspire to earn 35 per cent of its revenue from cargo services.
“Efforts should be made to optimise the land rental services through a collaborative effort by stakeholders which will see land allocation within airports serve as quick revenue generation to allow for five per cent returns on turnover.
“FAAN should consider direct involvement in retail concessions through part ownership of retail outlets under PPP agreement to create bigger retail shops. Implementation of full automation of the revenue collection system in all revenue points especially the parking lots and the Toll gates and others”.
He lauded FAAN for opening up a channel relationship with Munich Airport which has good and extensive experience in the area of airport management with successful track records and kin interest to assist it to prosper.
This is one opportunity, he said that should not be wasted but rather optimised for technical partnership, knowledge transfer and investment prospecting.
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