Appraising FG’s 2023 Bid To Double Nigerian airports

Appraising FG’s 2023 Bid To Double Nigerian airportsBy Ayoola Olaitan

While there is a consensus that the headway for Nigerian airports development should be Public-Private Partnerships (PPP) to save Nigeria’s scarce resources, the Federal Government 2023 agenda to double the airports in the country divides opinion.

The Minister of Aviation, Senator Hadi Sirika revealed this lofty goal of the government recently. However, this contradicts the frugal strategy of the President Mohammadu Buhari administration which has turned to PPP for the power sector, road infrastructure, seaport terminals, among others.

Presently, only four Nigerian airports generate sufficient revenue to manage the equipment and remain commercially viable.

The demand for air travel is expected to double over the next 20 years, with the International Air Transport Association (IATA) forecasting more than 7 billion passengers by 2035 globally in the aviation industry. The Nigeria aviation industry has continued to grow with global demands in developing the industry.

The Federal Airport Authority of Nigeria (FAAN) manages 26 airports of the 31 airports in the country. Out of the 26, only four; Murtala Muhammed International Airport (MMIA), Lagos, the Nnamdi Azikiwe International Airport, Abuja, the Port Harcourt international Airport, Omagwa and the Mallam Aminu International Airport, Kano are commercially viable as others can hardly sustain their operational costs.

According to aviation experts, increasing the number of airports is not a shot in the right direction as the ideal practice should see every airport built based on the commercial viabilities and the guarantee of traffic.

As the most populous African nation with over 200million citizens and a steady increase in population over the last five years, there is no doubt that the polity has the market for more aviation services.

The aviation industry having been described as the fastest growing sector in 2019 in terms of Gross Domestic Product (GDP), moving up 13.2% yearly to N83.5billion from N73.8billion in 2018, before the sector’s growth was hindered by the global pandemic.

The aviation transportation system has continued to grow rapidly, as more and more passengers regularly choose to fly. On a daily basis, flights arrive, depart, or overfly the Nigerian Airspace, while each year huge amounts of freight are transported by air into and within Nigeria.

With the growth recorded in the industry in the last five years, the Minister of Aviation, Hadi Sirika noted that this administration is set to improve on civil aviation and transportation in general.

 According to him, “we believe investment in this sector will do very well for our economy. Before the end of 2023, we would have doubled the number of airports in Nigeria.”

“We have a saying that a one-mile-long road leads to nowhere, but a one-mile-long runway leads to everywhere.

The Minister stressed the importance of aviation infrastructure as a critical component for the working of the economy and national security assets.”

Although, the minister noted that airports were being built in various locations in Nigeria and that more were in the works.

Speaking with MMS Plus, the Secretary General of the Aviation Safety Round Table Initiative and Chief Executive Officer, Centurion Securities, Group Captain John Ojikutu (Rtd), argued that the government will not build new airports but rather increase passengers’ movement across the country.

“I don’t think the government is going to build new airports, the Minister was talking about increasing passengers’ movement by 2023 that in the figure would have been doubled not that the government will build new airport”

Ojikutu posited that with the government aimed towards concession about four airports already the government would not want to build a new airport. The government is not doubling the airports because there are lots of ongoing projects in states.

Meanwhile, aviation expert and Chief Executive Officer of Top Brass Aviation Limited, Roland Iyayi, posits that in achieving viability, airports should be made friendly and charges should not be stifling so that more people including those who are not travelling are attracted to use the airports for other commercial purposes.

He argued that the Federal Airports Authority of Nigeria (FAAN) should focus more on the non aeronautical aspects of the industry.

His words: “FAAN should reappraise its priorities and focus on non aeronautical revenues around the airports. Currently, aeronautical revenue is about 80 percent of their income, if they change this to be 20 percent and 80 percent non aeronautical revenues, the airport will be viable.

Iyayi posits that taxes and charges are what funds aviation and all of the government as he urge the government to come up with ideas by which they will need to invest in the agencies to keep the industry afloat.

Industry stakeholders have speculated that the reason aviation isn’t affordable in Nigeria to the extent it should have been is simply the fact that the policies in the operation are hostile. If you remove some very hostile policies, the airlines are not stupid to be flying all over the place empty. They will do everything to cover their costs and if increasing fares is the only way they can cover their costs that is something they cannot shy away from simply because the policies put in place are not encouraging them to do otherwise.

Perhaps, the government needs to appreciate that the policies in place in the aviation sector are extremely hostile.

It is important for the government to appreciate the very pivotal and important roles that airlines play in the economy. In Nigeria, it is unfortunate that some major pronouncements by public officers indicate that the aviation sector is elitist. That’s the impression that one gets, if a Minister of Finance is saying that aviation is elitist so it needs to be taxed, then we have a problem in the sector.

On the issue of palliatives, in recognition of the role aviation plays in economics major countries like America as an example. In the US today every airline in America is owned by private entities not government. The government does not own any airline, but the government is glad to give the airlines over $6 billion worth of politics in the first round, which actually expires last week. At the end of the expired palliative, some airlines have threatened to layoff staff, because the loads they are getting now is far less than what they had pre-COVID. In order to ensure that they do not lay off people the government in America is working out a second round of palliatives for the airlines.

How does the government strike the balance between insufficient resources to manage airports and the bid to establish more without clearly defined strategy to make them viable?

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