Business

Concession: Stakeholders worry over fate of 18 airports

 

● Aerodromes record losses

As the Federal Government pushes through its airport concession agenda, stakeholders have raised concerns over the fate of over 18 other airports.

 

The airports slated for concession are the Murtala Muhammed Airport, Lagos, Nnamdi Azikiwe Airport, Abuja, Mallam Aminu Kano International Airport, Kano and the Port-Harcourt International Airport, Port- Harcourt.

 

These aerodromes generate over 80 per cent of the total annual earnings of all the airports in the country.

 

Although stakeholders are divided over the reason for concession of the four viable airports, the Minister of Aviation, Hadi Sirika, recently disclosed that the concession of the airports, especially Lagos, would fetch the nation over N30 billion annually and bring enormous investments to the nation.

 

Not a few are of the view that the other airports may lack necessary finance to maintain services and infrastructure going by the disclosure from the Managing Director of the Federal Airports Authority of Nigeria (FAAN)  that Nigerian airports were running at a loss.

 

The current Managing Director of FAAN, Capt. Hamidu Yadudu, had recently disclosed that FAAN was subsidising 18 airports that are not viable to keep them operational. “It’s either we compromise on standards or comply with remittances,” he said.

A former Managing Director of FAAN, Mr. Richard Aisuebeogun, in a recent presentation titled: “Viability of Airports in Nigeria – Why airlines fail,” at a two-day aviation, cargo and export symposium held in Lagos, showed with statistics that cumulative revenue generated by Kano airport in 2017, 2018 and 2019 stood at N8.28 billion, while expenditure stood at N9.6 billion, leaving a deficit of N2.44 billion.

 

For the same period, Katsina generated N42.1 million, expended N1.58 billion, a deficit of N1.54 billion; Sokoto raked in N400.1 million, expended N2.71 billion, amounting to deficit of N2.31billion; Ibadan generated N349.2 million, expended N1.39 billion with N1.14 billion deficit; Ilorin N437.1 million, expenditure N2.453 billion, a deficit of N2.19 billion.

 

Others are Akure airport with accumulated revenue of N168.7 million, expenditure N1.06 billion, N893.7 million deficit; Benin generated N930.1 million, expended N2.02 billion, N1.09 billion deficit; Calabar airport generated N559.6 million, expended N2.50 billion with N1.94 billion; Owerri airport generated N1.08 billion, expended N2.50 billion and incurred N1.42 billion deficit.

 

Aisuebeogun further stated that funding from high-traffic Lagos and Abuja airports’ exceeded revenue to the tune of N26.1 billion that was used to cushion the operational cost deficits incurred by the unviable airports in 2017, 2018 and 2019.

 

His words: “Airports are interested in their route and capacity utilisation, and the traffic of pas- sengers and airlines. Airports’ primary concerns are how many departing or arriving passengers do we have to handle?” “Airport infrastructure investment decisions are usually based on data from capacity utilisation.

 

“Capacity utilisation and traffic information allow airports to have vital info about their traffic patterns (peaks/crests, troughs, and seasonality).”

 

Speaking on the frequency at which airlines go into extinction in Nigeria, the former FAAN MD stated that on the average, a Nigerian airline had a 10-year life span, stressing that statistics from the Nigerian Civil Aviation Authority (NCAA) shows that domestic airlines on the register of NCAA have reduced from 150 to eight in 2017.

 

He listed factors responsible for their high mortality rates to include unstable foreign exchange, which, he said, affects direct operational cost, jet fuel, spare parts, insurance and simulator training, among others.

 

Other factors, according to him, include management arbitrariness and owner – manager over daunting influence on major decisions, lack of businessfriendly environment for local industry as against foreign competitors and high debt profile, among others.

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