Stakeholders have raised concerns about why the federal government has shifted its focus to upgrading and developing only five international airports in Nigeria, leaving out 16 other airports managed by the Federal Airports Authority of Nigeria (FAAN), which have continued to face infrastructure decay.
Festus Keyamo, the Minister of Aviation and Aerospace Development, last week sought a master plan for five international airports as he received the report of the Taskforce on the relocation of foreign airlines from the Old International Terminal to the new Terminal at the Murtala Muhammed International Airport (MMIA) Lagos….CONTINUE READING HERE
Keyamo said the Lagos airport accounts for 60 per cent of entry points and exit into Nigeria, adding that of all the five international airports in Nigeria, the old Terminal of the Murtala Muhammed International Airport is in a state of disrepair, and he is committed to ensuring the overhaul of the terminal before the end of his administration.
On the issue of a complete comprehensive plan for the airports, he said having a Master plan will eradicate wastage and encourage concessioners to make the airports hub.
He noted that the Master plan will consider the existing structures at the Lagos airport while renovation on the old terminal will not be disrupted.
FAAN manages 21 airports, namely Lagos, Kano, Port Harcourt, Abuja, Maiduguri, Kaduna, Calabar, Enugu, Owerri, Jos, Sokoto, Yola, Benin, Minna, Ibadan, Akure, Makurdi, Katsina, Ilorin, Zaria and Osubi airports.
Stakeholders say these airports currently have a potential output of generating and collecting revenue of about N18 billion annually. Still, infrastructures, inability to attract airlines and passengers, poor surface access, insecurity, costs, operating hours, destinations to fly to, etc, all have impacted the viability of the 16 airports.
Most airports also do not have night landing facilities and, therefore, cannot operate beyond 6pm and in inclement weather.
They have therefore asked that the minister of aviation also get the master plan for the other airports managed by FAAN and work on their infrastructures and device plans to make them viable.
Read also Keyamo seeks master plan for five international airports
“This is completely the wrong way to go. The Minister needs to understand how Nigeria’s airport system works, particularly revenue generation, cross-subsidisation, sunset airports, and airport viability.
By concentrating on five international airports, you cannot get a complete picture from which to make recommendations for Nigerian airports. What is key is can the 16 airports operate without the revenue from the five international airports?,” Sindy Foster, principal managing partner, Avaero Capital Partners, told BusinessDay.
She hinted that it isn’t for the minister to make anything viable but his focus should be on policy.
” What in the policies is making airports unviable? What does unviable mean in the context of the airports? What is the benefit to the States? What do the States need? What do airlines need? What does Nigeria need? To answer these questions, he should engage with those who can help answer those questions. Different ideas are flying around related to costs, concession grouping, etc.
“The solution will come from engagement with professionals, stakeholders, State government and businesses interested in the airports. Success or failure can never be down to one individual,” Foster explained.
She called on the government to carry out a complete audit on all airports as a start, adding that without that, no one knows the full picture.
“I would urge the Minister to engage with stakeholders who would help him. Nigeria needs to stop thinking one size fits all in aviation. Just as airlines need to have their own business plans, so do airports.
“What is appropriate for Lagos, may not be appropriate for Owerri. Local needs will be different, so local solutions also needs to be appropriate. Understanding where you are, and knowing where you want get to, helps to plan your direction effectively,” Foster said.
BusinessDay’s findings show that Lagos, Abuja, Port Harcourt, Kano and Enugu airport generates about 75 percent of domestic passenger traffic in Nigeria, while the remaining 25 percent are shared by other airports, most of which are unviable.
FAAN has repeatedly said money realized from the five international airports has been used to maintain the unviable airports being managed by FAAN.
Olumide Ohunayo, industry analyst and Director of research at Zenith Travels, told BusinessDay that airports have often been sold as a package including good and evil, small and large, domestic and international.
In achieving the objective, Keyamo should, as a first step, invite reputable international airport management companies, who will often achieve what governments can no longer take care of – improvements in capacity, efficiency and safety, Ohunayo said.
He said these private managers are internationally recognized airport operators with track records who can be sourced and verified by a click on the mouse.
“They will act as advisors or management consultants to the government within a limited time frame. I am not referring to the usual masquerades that form a ‘quickie’ consortium and rush to Corporate Affairs Commission for registration and will bid and win using Padi- Padi in government.
“During this period, the bid winner should be given a free hand to manage, restructure and position the organisation for a Public Private Partnership or partial privatisation. The management company will provide compensations and adjustments for all collaterals,” he said.
John Ojikutu, security expert and former military commandant at the Murtala Muhammed International Airport, Lagos told BusinessDay that the minister could demand for the master plan or the survey of the airports only for their Concessions and the development of their Security.
“Any other need for the request should not be for commercial reasons which may result to personal or another ‘conflict of interest’.
“I have repeatedly said that all the Federal Airports must be given out for concessions especially the non Aeronautical services. Each of the five international airport must go into the concessions with four domestic airports. None of the 21 airports should be left alone without going for concession.
“The only way to make the airports viable is to privatise them into concessions with the viable ones. Government can not continue to keep or sustain any airport with the scarce revenues from other social services. All the non Aeronautical services of all the airports must go for public concessions,” Ojikutu said.
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He said the airport’s aeronautical services must be improved to accommodate traffic beyond 1800 hours and up to 2200 hours daily.
He advised Keyamo to concede all the airports’ non-aeronautical services and face the safety and security services squarely and the oversight and enforcement of their regulations.
“Governments globally do not have business in the commercial services in aviation except for safety and security regulations, oversights and enforcement,” Ojikutu said.
Seyi Adewale, the chief executive officer of Mainstream Cargo Limited, said if the development of the other domestic airports is not included in the masterplan, the Ministry has a great opportunity to expand the scope and get knowledgeable people as consultants, especially those with requisite expertise in airport privatization, concession, and commercialization.
“Allow the domestic airlines to bid for it and turn it into their hub and incentivise them for same. Airlines are already moving their main hub out of these five international airports.
“Developing the commercial arm of an airport is a long-term investment or project. It needs the involvement of state governments, airlines, concessionaires, tourism experts, media and large corporations. It’s the strategic mix of these groups that, in the long term, will birth viable airports. It needs a deliberate and dogged approach,” Adewale said….CONTINUE READING HERE