Ladies and Gentlemen,
1. It is my honour and pleasure to welcome the Chairman and Distinguished members of the Senate Committee on Aviation to the Federal Airports Authority of Nigeria (FAAN) on this very important Legislative oversight function.
2. Without any iota of doubt, FAAN has enjoyed the highest level of support, collaboration and co-operation from the Distinguished Chairman and Members of this Committee. This support has immensely contributed to the Authority’s vision and mission. The effort of the Committee in considering the repealing of the existing Aviation Agencies Act and enacting new ones, including that of FAAN is highly commendable as it will position the Agencies for greater and better achievements.
3. As we are all aware, the world is currently going through one of its toughest times occasioned by the COVID-19 pandemic and other attendant social and economic challenges. Just when nations were gradually taken steps to return to their normal way of life, the news of the new variant of the virus hit the air waves, leading to imposition of new travel bans and various levels of restriction in and out of some travel destinations.
4. However, while taking steps to ensure we stay safe by complying fully with all the lay down protocols as provided by the Presidential Task Force (PTF) on COVID-19, Nigeria Centre for Disease Control (NCDC) and other relevant agencies, it remains our duty to ensure that we remain afloat and come out stronger from the pandemic.
5. Over the years, Nigeria has strived very hard to develop her aviation sector to ensure viability, sustainability and affordability.
6. Permit me to mention that the Act setting up the Federal Airports Authority of Nigeria (FAAN), CAP.F5 Laws of the Federation of Nigeria, 2004, statutorily empowers the organization to:
I. Develop, provide and maintain at all commercial airports all necessary services and facilities for the safe, orderly, expeditious and economic operation of air transport
11. Provide adequate conditions under which passengers and goods may be carried by air and under which aircraft may be used for other gainful purposes.
111. To charge for services provided by the Authority at airports.
1V. To provide adequate facilities and personnel for effective safety and security at all airports.
V. Generate and collect revenue for services rendered. This makes up the Internally Generated Revenue (IGR).
V1. Spend monies collected on expenses and projects approved in its yearly IGR budget. The monies derived from the various revenue sources annually are spent on the following: Personnel, Overhead and Capital Cost. In addition to this FAAN is also expected to make remittances to the Federation Account.
7. The Internally Generated Revenue (IGR) can be broken down into two (2) categories namely; Aeronautical Sources (Landing, parking, Passenger Service Charge etc) and Non-aeronautical sources of revenue (Rent, Car parks, Airport Adverts, Concession fees, Airport Protocol Services etc).
8. For us in FAAN to achieve our Vision of being one of the best airport groups in the world as well as the Mission to develop and profitably manage customer-centric airport facilities for safe, secure and efficient carriage of passengers and goods at world-class standards of quality. The Authority will from time-to-time support and attract local and foreign direct investments from individuals, corporate bodies organisations.
9. It might interest us to know that most of the airports we inherited their management were built over 3 decades ago. Thus, looking back, with growth in passenger traffic and aircraft movements over time, facilities have been over-stretched and aged, also given that most often it takes more resources and time lags to remodel an existing structure, one has every reason to say that FAAN made and still are making steady and sustained improvements given these constrains.
10. In the last 5 years FAAN through the support of the Federal Government and other stakeholders turned around Nigerian airports for good as can be seen through the massive upgrade, rehabilitation and remodelling of existing terminals in our 21 local airports and construction of series of brand new terminals with ultra-modern facilities, in our five International airports of MMIA, Lagos; NAIA, Abuja; MAKIA, Kano; Port-Harcourt International Airport, AIIA, Enugu and Reconstruction of the Enugu Airport Runway amongst others.
*Abuja and Port-Harcourt New terminals already commissioned
*Kano New terminal ready and to be commissioned before the end of First Quarter 2021.
*Lagos New terminal is at 95% completion and will also be commissioned before the end of first quarter 2021
*Enugu New terminal to follow.
11.Some other recent achievements and developments include:
a) Achieved Airport Certification of two international airports (Lagos and Abuja) while Kano and Port-Harcourt Airports are in view.
b) Improvement in Safety and Security of the Airports as the Nnamdi Azikiwe International Airport was chosen as the best improved airport in safety by Airports Council International, Africa region.
c) Establishment of a Fire Simulator at Zaria, NCAT for the Training of Fire Personnel.
d) Positioned the Airports for COVID-19 operations despite the decline in revenues, which attracted commendations nationally and internationally.
e) Upgrade and rehabilitation of facilities at the 21 Airports under FAAN amongst others.
f) Continuous training/capacity building of staff especially those in the Aviation Security, Fire & Rescue, Operations, Safety and Engineering Departments, has received a new impetus. This is in recognition of the need to continually bring staff up to date with emerging technologies and best practice, without necessarily expending so much on foreign training
g) Upgrade of the FAAN Training School at MMIA Lagos to a world class standard so as to facilitate the hosting of ACI and ICAO training programs. It is interesting to note that several of such programs have since been held at the Centre, to the delight of stakeholders.
h) Elevation of the welfare of Staff in the areas of Medical Care and education of children of Staff as immediate measures. In medical care, the FAAN Hospital at Lagos Airport has been seriously elevated in terms of installation of modern equipment and service level, amongst many others.
12. However, FAAN is constrained by the following factors amongst others, despite the aforementioned achievements:
a) Capacity and Contribution of Airports to revenue generation. – MMIA and Abuja mainly sustains other Airports.
b) Human Capacity development, the work force especially Security, Fire officers etc requiring continuous Certification Trainings which is the trend in the world for Aviation Fire and Safety Personnel. These come at a huge cost to the Authority.
c) The Industry is still having infrastructural gap to fully stabilise. Therefore, Government Support in stabilising the Industry is needed. This can be achieved by suspending the contributions to the Federation Account in compliance with ICAO Standards and Recommendation Practices (SARPs) Doc 9562 on Airport Generation, which provides that:
– Revenue Generated by Airports should be transparently re-invested wholly in operating and developing Airport facilities.
d) Economic challenges – Both national and international economic challenges affected airline operators which made them to reduce fleets, frequencies or totally withdrew operations and affecting revenue generations.
f) Debts arising from revenue generation – Indigenous Airlines and others are owing the Authority huge amounts of monies for services rendered.
g) Still Rising operating and maintenance cost of the new terminals and existing ones due to inflation and devaluation of the Naira.
h) Security Challenges – Affecting revenue and other areas of our operations.
13. We have identified the following areas for improving revenue:
a. Focus on Airports that are not breaking even on how to make them perform.
b. Increase adverts especially on below the line items.
c. Aggressive debt recovery.
d. Intensive marketing of the non-aeronautical revenues
e. Introduction of Pay as you go system on some Revenue Heads especially with difficult customers.
14. Further measures in place to ensure efficiency and cost reduction are as follows:
i. Blocking all loopholes/leakages and commencement of cashless policy.
ii. Setting up a management committee on efficiency with mandate to ensure judicious utilization of government resources. The committee is working assiduously on the mandate given.
iii. Strict Monitoring & evaluation.
iv. Review of policies, procedures and processes to enhance effectiveness and efficiency.
v. Strengthening the internal Audit and controls to ensure value for money Audit.
15. In conclusion, I will like to reiterate that, Airport Business is global, technical, highly regulated with huge infrastructure requirement. Nigeria is expected to be a hub in West Africa/Central Africa Sub-Region, this expectation can only be met with more funding to ensure provision of modern and up to date infrastructure and technology, this we believe can be achieved with the necessary support from appropriate quarters.
16. Once again, I want to respectfully welcome you all and wish you a pleasant time in FAAN.
*Yadudu is managing director FAAN. The senate committee on aviation visited the agency on March 6, 2021.