Industry stakeholders have raised concerns about the federal government’s decision to upgrade only five international airports in the country while leaving out 16 local ones managed by the Federal Airports Authority of Nigeria (FAAN).
Festus Keyamo, 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.
Keyamo said the Lagos airport accounts for 60 per cent of entry points and exit into Nigeria.
He said of all the five international airports, the old terminal of the MMIA was in a state of disrepair, and he was committed to ensuring the overhaul of the terminal before the end of the current administration.
FAAN manages 21 airports in Lagos, Kano, Port Harcourt, Abuja, Maiduguri, Kaduna, Calabar, Enugu, Owerri, Jos, Sokoto, Yola, Benin, Minna, Ibadan, Akure, Makurdi, Katsina, Ilorin, Zaria and Warri.
Stakeholders say these airports currently have the potential of generating revenue of about N18 billion annually. Still, infrastructures, inability to attract airlines and passengers, poor surface access, insecurity, costs, operating hours, and destinations to fly to, among others, 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 get the master plan for the other airports managed by FAAN and work on their infrastructures and device plans to make them viable.
“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 at Avaero Capital Partners, told BusinessDay.
She hinted at the need for policies that will make airports viable.
She said: “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 called on the government to carry out a complete audit on all airports.
“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,” she said.
BusinessDay’s findings show that Lagos, Abuja, Port Harcourt, Kano and Enugu airports generates about 75 percent of domestic passenger traffic, while the remaining 25 percent come from other airports, most of which are unviable.
FAAN has repeatedly said that money realised from the international airports has been used to maintain the unviable airports being managed by it.
Olumide Ohunayo, industry analyst and director of research at Zenith Travels, said Keyamo should, as a first step, invite reputable international airport management companies that will achieve improvement in capacity, efficiency and safety.
He said these private managers are internationally recognised airport operators with verifiable track records.
He said: “They will act as advisors or management consultants to the government within a limited time frame.
“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 compensation and adjustments for all collaterals.”
John Ojikutu, security expert and former military commandant at the MMIA, told BusinessDay that the minister could demand for the master plan or the survey of the airports only for their concession and the development of their security.
He said: “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 airports 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 cannot continue to keep or sustain any airport with the scarce revenues from other social services.”
Seyi Adewale, chief executive officer of Mainstream Cargo Limited, said if the development of the other domestic airports is not included in the master plan, the ministry should expand the scope and get knowledgeable people as consultants, especially those with requisite expertise in airport privatisation, concession, and commercialisation.
He said: “Allow the domestic airlines to bid for it and turn it into their hub and incentivise them for the 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.”