FAAN Can Shore Up IGR with Non-aeronautical Revenue, Experts Say

Chinedu Eze
Experts in the aviation industry have said the Federal Airports Authority of Nigeria (FAAN) can boost its revenue significantly by fully exploiting non-aeronautical revenue sources.
FAAN generated about N30 billion last year, but about 80 per cent of its revenue came from aeronautical sources.

But industry experts argued that the agency could boost its revenue with such non-aeronautical sources including intra-airport transport fee, advertisement at its 26 airports, electricity bills and cargo sales tax.

They said FAAN could also earn more revenues from toll gate fees, landing fees, parking fee, fuel tax, luxury items tax, car parks, shopping complex, cinema, training centers and conference halls; estates, water bills, transit hotels, restaurants, games and sports centers.

The experts spoke to THISDAY in reaction to the call by the House Committee on Aviation for FAAN to fully exploit its non-aeronautical revenue sources.

Aviation economist and the lead consultant at ETIMFRI Group, Amos Akpan, said the agency has to fully close loopholes on revenue and take advantage of other sources of revenue not currently being exploited to boost its revenue.
The Chief Executive Officer of Mainstream Cargo Limited, Seyi Adewale said if FAAN has a plan to develop infrastructure and build a smart airport city, it could double its revenue annually for the next five years, adding that it could build smart airport city across major international airports.

“Please note the capacity of its customers to pay in a depressing and COVID-19 world. Presently, many of FAAN customers owe significantly and money realized in real terms annually is pitiable,” he said.

Former General Manager, Business Development, FAAN and currently the Managing Partner, TMSS Logistics, Alhaji Nuhu Adam, said the agency has not fully taken advantage of generating huge revenues from advertisement, noting that taking advantage of above and below the line advert opportunities could generate over N30 billion for FAAN annually across 26 airports currently under its management.

The House Committee on Aviation, recently advised FAAN during its facility tour of Lagos airport to explore more of the revenue potential within the non-aeronautical sources to shore up its internally generated revenue.
The Chairman of the Committee, Hon. Nnolim Nnaji observed that the unprecedented impact of COVID-19 pandemic on aviation should be an eye opener to the authority, stressing that if there were adequate plans to harness the potential available in the non-aeronautical aspects, the challenges of meeting up with the demands of running the airports would have been minimal.

He also pointed out the air transport has remained the fastest and safest means of transportation, adding that the prevailing security challenges in Nigeria today has put more pressures on the sector which requires greater attention to the provision of adequate infrastructure and security.

The chairman during the visit, further disclosed that his committee has continued to consistently demand that the 25 percent compulsory remittance by FAAN and other agencies in the aviation sector should be retained within the sector for the next ten years to develop the infrastructures.

Nnaji, who stated that the committee members were in Lagos to access what FAAN was able to do with the money appropriated to it in 2020 budget before appropriating for 2021, assured that the lawmakers would continue to work with the agencies and the Ministry of Aviation to reposition the industry for greater efficiency.

He also promised that the amendment Bill for the FAAN Act, which is before the National Assembly when passed would ensure equity for both the authority and organisations doing businesses at the airports.

Earlier in his welcoming remarks, the Managing Director of FAAN, Captain Rabiu Yadudu expressed his appreciation to the committee for its unprecedented supports to the authority in the last one year adding that such has helped FAAN in projecting its vision and mission and as well overcome the challenges of corona virus pandemic.