BusinessDay
NigeriaDecides2023

Nigerian airports need to grow their non-aeronautical revenues

 

Non-aeronautical revenues are such revenues that accrue from non-airline services, such as parking and landing charges, fuel surcharge, baggage taxes, and others that relate to passengers but include revenues generated from businesses around the airport, advertising, meeters and greeters, and others.

While airport authorities have continued to levy multiple taxations on the airlines, which have continued to serve as focal points of revenue collection to run the airports, expert say the non-aeronautical space holds a lot of potential. This area currently generates less than 20 percent revenue because it has yet to be developed to generate expected returns for government.

“In Europe, we are arriving at 30 to 40 percent of non-aeronautical revenues as against aeronautical revenues. In Africa, we are below 20 percent,” Isabel Zarza, managing director, Dufry Africa, a duty-free operator across the world, said.

“The reason is that retail is not yet well developed. We need to invest in retail. It is important to develop retail in African countries. There are new terminals that are being built in Nigeria. We need to work with Federal Airports Authority of Nigeria (FAAN) to build the perfect shops in the new terminals,” Zarza said.

In growing this segment of aviation, experts say duty-free shops are one of the major sources of non-aeronautical revenues and so the airports should be structured to have walk-through shops. This means that in order to arrive to the gate, passengers need to go through the shops. This will attract people into the shops for shopping purposes.

Saleh Dunoma, managing director, FAAN, said Nigeria was moving gradually towards raising its revenues from non-aeronautical sources. By the time projects like aerotropolis come onboard and bring about a lot of developments on the landside of the airport, Dunoma said, Nigeria would be seen to have developed the non-aeronautical sources of revenues.

“We have issued out pieces of land for construction of hotels and other giant projects that we feel by the time they are completely completed and commissioned, we are going to earn more revenues from non-aeronautical sources,” Dunoma said.

“We are working hard on that, but we want to concentrate on the aeronautical sources so that we make sure that we provide the services that we are expected to provide to airlines and passengers,” he said.

 

 

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