FAAN is boosting revenues by refining retail, hospitality offerings at airports – Agunbiade

Adebola Agunbiade is the Director, Commercial and Business Development, Federal Airports Authority of Nigeria (FAAN). In this interview with IFEOMA OKEKE-KORIEOCHA, she speaks on challenges of attracting investments into Nigerian airports and what FAAN is doing to boost non-aeronautical sources of revenues.

What are the primary revenue sources for Nigerian airports?

Nigerian airports derive revenue from various key sources, with the primary ones being aeronautical and non-aeronautical. Aeronautical sources encompass passenger service charges (PSC), landing and parking fees for airlines, retail concessions, cargo handling, and airport advertising. Furthermore, rental income from retail spaces allocated to airlines, restaurants, Bureau De Change, shops, and land leases for projects like hangars, fuel depots, shopping/office complexes, and car rental services within the airport constitutes a significant revenue stream. International airports also garner revenue from duty-free shops and exclusive lounges. Collectively, these revenue streams are vital for sustaining airport operations and financing future developmental endeavours.

What are the main challenges in attracting investments to Nigerian airports?

Securing investments for Nigerian airports encounters obstacles such as regulatory complexities, political and economic unpredictability, and apprehensions regarding security and transparency. Investors typically seek stable environments, and inconsistencies in policies may foster uncertainty. Moreover, the high operating costs often impact airport profitability adversely. Nonetheless, Nigeria’s sizable population and expanding aviation sector present a promising long-term investment prospect for individuals who discern the potential within the country’s market growth.

What advantages do foreign investments bring to Nigerian airports?

Foreign investments yield significant advantages for Nigerian airports. In addition to providing essential funding for extensive infrastructure projects, foreign investments introduce global expertise in airport management and operations. Overseas partners often introduce cutting-edge technologies that can enhance operational efficiency, security measures, and passenger contentment. Furthermore, international collaborations can elevate Nigeria’s status as a pivotal travel centre, potentially augmenting passenger traffic and contributing to economic development through job creation and tourism. It’s crucial to acknowledge that local investments also play a pivotal role in driving economic advancement.

How does Nigeria plan to enhance airport revenue in the future?

Nigeria is actively diversifying airport revenue channels by emphasising non-aeronautical sources to bolster profitability. Key strategic initiatives encompass refining and reevaluating retail and hospitality offerings at airports, amplifying advertising prospects, enriching cargo handling services, and forging land lease partnerships. FAAN is engaging with stakeholders from the private and public sectors, promoting investment opportunities through conferences, seminars, and workshops. The government is committed to attracting more international flights by enhancing facilities to meet global benchmarks, potentially augmenting passenger traffic and consequent revenue. Additionally, FAAN is exploring digital technologies to streamline services, reduce costs, enhance operational efficiency, and foster sustained revenue growth in the long run.