COVID-19: FAAN loses N17.5bn in 23 weeks

 

Posted by Sade Williams 

 

The Federal Airports Authority of Nigeria (FAAN), has said that it lost N17.5billion of aeronautic charges in 23 weeks and incured N1.4 billoon loss of non-aeronautic charges from April to June, 2020.

Managing director of the Authority, Capt. Hamisu Yadudu also disclosed that the agency Internally Generated Revenue (IGR) reduced by over 90 per cent in the last six months due to the COVID-19 pandemic which broke out in March this year.

These were disclosed at virtual stakeholders meeting held on Tuesday night .

Speaking at the event Capt. Yadudu said that notwithstanding the challenges posed by COVID-19 on FAAN’s revenue, the agency has ensured that all its local airports have commenced domestic operations after meeting the requirements set by Presidential Task Force (PTF) on COVID-19.

He also stated that it was based on that fulfilment of the conditions that the Nigerian Civil Aviation Authority (NCAA) and other regulatory agencies and issued clearance to airports to reopen.

Yadudu said that during the lock down, the airport managers opened airports that were involved in evacuation flight arrangements .

This according to him  further makes the agency incur cost on maintenance and utilities despite the total decline in traffic as well as revenue.

According to him, “In spite of the drastic drop in revenue, FAAN has managed to ensure that all its local airports have commenced domestic operations having met the requirements by Presidential Task Force (PTF) on COVID-19, NCAA and other regulatory bodies and have been issued clearance to reopen.”

“Plans are also at advanced stage to ensure that the International Airports are set for re-opening on the 29th of August, 2020 as announced by the Hon. Minister of Aviation as we will be seeing during the course of this meeting. All these have come at a huge cost to the Authority with little or no cash inflow”, he said.

On the plans to commence international flights, Yadudu said, “Plans are also at advanced stage to ensure that the international airports are prepared for re-opening on August 29, 2020 as announced by the Hon. Minister of Aviation, Senator Hadi Sirika as we will be seeing during the course of this meeting. All these have come at a huge cost to the Authority with little or no cash inflow.

Speaking on the protocols put in place for the commencement of international operations as guideline to ensure that more than 1,280 international passengers are allowed on a daily basis, Yadudu said that it would translate to reduced revenue for the agency, as fewer passengers would be coming in.

“ The above automatically translates to fewer passengers and limited income even with the resumption of international operations. All these are issues of great concern to the authority and partly what has necessitated the need for all our stakeholders to rub minds on strategies to adopt to ensure that the industry remains in operation to provide the very much needed service,” Yadudu said.

The Director of Finance and Accounts (DFA), Mrs. Nike Aboderin in her presentation titled, “Ongoing COVID-19 and Implications on FAAN” revealed that the agency lost over N17.5 billion of aeronautic charges in 23 weeks and also N1.4 billion loss of non-aeronautic charges from April to June, 2020.

She explained that the loss is huge compared to the same period in 2019.

Aboderin lamented that compared to 2019, only 8.7 per cent of the agency’s non aeronautical revenue charges were collected from April to June 2020.

She pointed out that as a result of the pandemic FAAN customers were not only defaulting on payment for services rendered to them but that there is an increasing request for payment suspension, deferral and waivers

Aboderin further stated that 87 per cent of 2020 budgeted overhead cost was wiped out in six months with up to 95 per cent decline in weekly revenues.