In 2011, when the immediate past administration began the airport remodeling project, many in the industry had expressed the fear that government would not be able to accomplish it because of the huge funds needed. But the then Minister of Aviation, Stella Oduah, now a Senator, was optimistic that government could really transform the airports and in less than two years, some of the airports were transformed and new structure, like the General Aviation Terminal at the Murtala Muhammed International Airport, Lagos, where new terminal facilities were built.
But as industry observers had warned that government might not be able to complete the project due to paucity of funds, when Oduah was removed, the remodeling project stopped. Her successors said there was no money to continue and there was obvious disinclination to continue to fund the project by successive administrations.
This is why stakeholders in the sector reason that government must have to insulate airport development and management from the intemperance and idiosyncrasies of ministers by put in place policies that would not be subjected to daily rigmarole by top government officials in the industry.
There are diverse opinions about how government can solve this problem. Some people suggest that government should give the Federal Airports Authority of Nigeria (FAAN) autonomy and yearly targets, whereby it would be made a profit oriented company that is not directly answerable to government in its day to day activities and free to take all decisions, but at the end of the year it gives account of its operations to government.
Those behind this suggestion insist that FAAN must be operated as a profit oriented company that pays itself, generates and raises money to develop and maintain airport facilities and at the end of the day makes record profits.
They noted that this would help the company explore new revenue generation sources, expand existing ones and becomes more accountable. The company would also get rid of the dead wood that presently constitutes a huge financial burden to FAAN. Besides, they argue that the agency would also device ways to continuously maintain the airport facilities; rather than leave them to decay for years before attempting rehabilitation at huge cost.
So it is expected that the Buhari administration would take a decisive decision whether to leave the airports as it is under FAAN, the facilities will in dilapidated state; reorganise FAAN to make it more purposeful and efficient or to concession the airports to private investors who will bring their funds to develop the airports.
Industry experts have been canvassing for the concession of airport facilities. Some had suggested privatisation while others said that Nigeria is not ripe to private its airport facilities. But the trend in the world is that concession has become the in-thing. But will the present administration concession the airports? Many express the doubt that the Buhari administration would move away from the old system of allowing the airports to be managed by government concern, FAAN. But some airline chiefs and industry analysts believe that concession should be the best option to sustain airport development and make it profitable.
Industry analyst and CEO of Belujane Konsult, Chris Aligbe is among those who believe that concession is a better option to revamp the airport facilities.
Aligbe reasons that the status quo where FAAN is laden with the responsibility of managing all the 22 airports is not going to be successful and what this means is that the infrastructural problems with the airports may never be solved.
“The little revenue FAAN earns is not enough to manage all the airports, not even enough to expand Lagos and then to expand Abuja and make them world class airports. They are spreading the revenue they are earning in administering over too many airports, which should not be. I don’t also believe that we are at a stage of privatisation of the airports, so what we should do is to concession the airports.
“When you concession it you will see the manager who now owns the airport turn it into what it should be but once you concession airports, like I always say, you must put in place an anti-competition system that will make sure that people don’t become anti-competitive. You must also put in a system that will stop them from being a cartel. All airports are monopolies and monopolies don’t care what they do with customers because they now see that the customer has no choice, users have no choice, operators have no choice,” Aligbe said.
Chief Executive Officer of Bi-Courtney Aviation Services Limited (BASL), Christophe Penninck, on his part, posited that Nigeria should go with the modern trends whereby airport facilities are concessioned. This way, government does not inject its scarce funds to airport development; rather, the private sector does the financing.
“Aviation is not Nigerian; aviation is not even African; aviation is global. So what we have to do is to look at the global standards. When international airlines fly to Lagos they will expect the same level of safety, security, operational quality service delivery when they fly to New York, Amsterdam, Brussels or Singapore. Let us use Singapore as an example; the Singapore way is the way Nigeria should go. Don’t forget Nigeria has the largest population in Africa; that is a fact. There are very few things I think personally that Nigerians cannot do compared to the rest of the world.
“You have everything in Nigeria, so let’s take out the element that says Nigeria is a different standard; I think we should say that Nigeria should look at global standards and the quality that is giving at other airports. So if we now agree that Nigeria should look at global standards, let’s look at what is the best practice. And to me, the best practice is privatisation. You can have privatisation with the participation of the government .I am not saying you should privatise 100 per cent, but if you want to do that no problem. When you said that there must be a certain level of service delivery, you can put that in the concession. In Europe it is there,” Peninck said.
He also said that government would regulate charges even when the airports are under the management of private concerns, noting that whenever aeronautical charges are changing and usually they are changing upwards, the International Civil Aviation Organisation (ICAO) regulates to say that you must first have a meeting with the stakeholders, give the minutes to the civil aviation and then take the decision with the stakeholders. This means that everyone must be carried along when airport charges are reviewed.
Peninck cited example with BASL and said, “We are the only private terminal in Nigeria. Now, what do we do better than FAAN for example? I will not say what FAAN could do better but I will say what we are doing better, we have a very strong maintenance culture. We have also a small team but we treat our staff well. I am not saying FAAN doesn’t treat their staff well but there is a very big problem in the aviation industry in Nigeria at the moment, a lot of companies don’t pay on time. I can proudly say we pay on time and we pay above what the industry pays. So we have a culture within the company that at least satisfies the staff and in return to that the staff satisfies the customers that pass through the terminal.”
He said BASL has massively invested in trying to keep up with the international standards; “We don’t have the bureaucracy of a public company. There are many airports in Africa that are still state-owned but they run like companies. The philosophy in the airport is that you have a private company but the government is a shareholder, either majority shareholder or minority shareholder; they definitely have something to say in it. If you move out of Africa, Heathrow airport in London is privately owned, Brussels is privately owned, the government has a stake in it, about 10 per cent, 15 per cent or 20 per cent, just to make sure that the interest of the state is still well represented. This is because sometimes the ownership of these terminals might not be a national of the countries.”
Former Managing Director of FAAN, George Uriesi however said government can hand over the management of the airports to semiautonomous body that will manage them effectively and give account to the government. This body, he said should be autonomous, even though it is answerable to government at the end of the year.
“I have always said that concession is the right thing to do. That is why South African airports are the way they are. They are partly privatised and government lets them operate independently. Government is a shareholder but it does not intervene. It is inactive shareholder. That is one thing that South Africa did that is very good. It is the same thing Kenya did with Kenya Airways; it lets Kenya Airways operate without any form of interference.”
For Nigerians to feel the expected change in the aviation industry, the airports should be upgraded to compete with airports in other climes; they expect that our airports should be equipped with modern facilities and high speed internet services and wifi; and good parking lots. Government may not have the resources to transform these airports but it can reorganise FAAN to actualise this or concession the facilities to private investors under the regulation of FAAN.
