FNAC 2022: Dissecting issues, exploring investment opportunities in Nigeria’s aviation through synergy

A cross section of Aviation Agencies’ bosses at the event

 

By Sade Williams

 

Saddled with the responsibilities of managing Nigeria’s airports and providing services to both passengers and cargo airlines, Federal Airports Authority of Nigeria (FAAN) took a bold step at organising the first-ever National Aviation Conference, tagged FNAC, as part of ways to share ideas, challenges, solutions, collaboration and synergy on the advancement of aviation in Nigeria.

The four-day event, which held between June 14th and 17th, 2022, at the International Conference Centre, Abuja, attracted captains of industries and professionals in aviation and allied sectors, featuring topics such as Implementing Single African Air Transport Market (SAATM): Prospects and Challenges; Collaborative Service Delivery in Nigeria Air Transport Industry: The way forward; Aviation and National Security: Emerging Trends; Addressing Nigeria’s Unviable Airport Syndrome; Nigerian Airports: Gateway to Developing and Managing Tourist Destinations in Nigeria; Ease of Doing Business as a panacea for boosting investments in Nigerian airports, among others.

Nigeria’s aviation minister, Senator Hadi Sirika, in his goodwill message, said the theme of the conference was very timely and could not have come at a better time.

He noted that the conference was an avenue to further discuss, evaluate, analyse and synergise the advancement of aviation in Nigeria.

He therefore called on well-meaning foreign and local investors to come on board and take advantage of the business opportunities, with limitless potential for huge returns on investments, in the sector.

According to Sirika, “the aviation sector in Nigeria is a goldmine, with lots of latent potentials waiting to be explored. Our vantage position in terms of regional positioning, population and natural resources has positioned us strategically as a continental leader.”

While charging stakeholders not to lose focus on the core variables (safety, security) in driving air transport, Sirika urged them to continue to “discuss issues that bother on these variables, and while we continue to emphasise safety and security, we must operate profitably so as to be able to achieve efficiency and sustainability.”

Capt. Rabiu Hamisu Yadudu, managing director, FAAN, said the theme was carefully and thoughtfully chosen to proffer solutions to major industry challenges as well as chart the way forward for a National Air transport industry that would be effective, efficient and profitable, in addition to being a major catalyst to national economic growth and development.

As the industry commences the process of rebounding, Yadudu said it was imperative to come together to identify and analyse the positives from these challenges, with a view to consolidating on them and fostering sustainable development in our industry.

”This is the motive for inviting all stakeholders – airlines, handling companies, aviation agencies, concessionaires, security agencies, etc, to discuss issues, share ideas, and proffer solutions to the myriad of challenges facing our industry. Furthermore, we have assembled a crop of seasoned faculty who have distinguished themselves globally in various fields of aviation: from regulation, operations, financing, among other critical areas, to bring these issues to the fore, and also proffer lasting solutions.

”At this juncture, let me state that our potential and capacity in the global air transport industry is grossly underutilised. If we are desirous of attaining the status of a major player in the global aviation sphere, this is the time to reposition and move the industry forward. The focus is on Nigeria because we have the largest fleet of aircraft within the sub-region. As at 2021, it was reported that Nigeria lost $2.5 billion (about N1.25trn) in Maintenance, Repair and Overhaul (MRO) investments to neighbouring countries. Having such investments here would have created more employment opportunities for Nigerians, revenue generation and training of technical personnel for maintenance of aircraft. The inter link and value chain between the air transport, tourism and hospitality industry for economic growth cannot be over emphasised. We are blessed in Nigeria by our natural geographical positioning and so, I believe if we can sit together like this, share ideas and intelligence, we can from this meeting develop a workable plan of action that will make Nigeria the next destination for tourism and investment.

Both the minister and FAAN MD posited that the conference would be institutionalised as a platform where great ideas that will propel the Nigerian aviation sector into a global reference point would be developed.

”It is our intention to come up with a working document that would be transmitted to all the stakeholders for immediate and sustained action. It will be a living document. We hope that the resolutions and recommendations that would come out from this conference will bring lasting and sustainable solutions to the challenges confronting the industry,” Yadudu said.

A presentation titled: ‘Collaborative Service Delivery in Nigeria Air Transport Industry; The Way Forward,’ by Capt. Yadudu, further highlighted Nigeria’s current performance, prospects and statistics while also not ignoring the contextual issues in the sector and how to address them.

According to Yadudu, the sector creates over 241,000 jobs; generates $1.7 billion Gross Value Added, while 0.4 percent of the country’s Gross Domestic Product (GDP) is supported by inputs to the air transport sector.

As for the prospects, it is projected that by year 2037, Nigeria would be processing 14 million passengers, the sector would support 555, 667 jobs and would add approximately $4.7 billion to the GDP.

FAAN has projected Nigeria’s passenger traffic to grow by 7 percent over the next 10 years.

The agency said the expected growth is higher than 5.3 percent, which is what the aviation industry would experience globally during the period.

While stating that the expected growth is an indication of the huge potential the sector has, the agency called on investors to harness the potential in the proposed airport city.

The Federal Government recently got 12,000 acres of land for aviation development in the Federal Capital Territory (FCT).

The land, which is proposed to host the airport city, offers land to investors to build MROs, hotels, restaurants, own farmlands and other businesses that are guaranteed to thrive, FAAN said.

Speaking in Abuja at an investment forum of the programme, director, Commercial and Business Development of FAAN, Sadiku Rafindadi, said: “Nigerian aviation market is huge, yet untapped. We plan to fully tap Nigeria’s potential and fully harness the available opportunities within the 21 airports managed by FAAN.

“In 2020, the domestic and international passenger traffic stood at 9,358,186 as against 15,886,955 in 2021, representing a difference of 41 percent.

“Analysts have forecast that Nigeria’s passenger traffic will exceed that of the global aviation sector, as such, aviation remains pivotal to the socio-economic growth of Nigeria.”

While wooing investors further, the authority unveiled more investment opportunities at the airports to include: Independent Power Plant (IPP) projects; Agro Allied and Cargo Facilities; Aircraft Maintenance Facilities (Hangars); Amusement parts/Aquarium; Training Schools; In-flight Catering complexes; Horticulture/Flower gardens; Public gallery; Develop surface/ground transportation (Roads and Monorail); Shopping malls; Large Scale farming; Media hub/film village; Bank Pavilion; Equipment leasing and Medical Tourism (hospitals), among others.

Specifically, the authority noted that at the Murtala Muhammed International Airport, Lagos; the Nnamdi Azikiwe International Airport, Abuja; Mallam Aminu Kano International Airport, and Port Harcourt International Airport, Omagwa, investment opportunities such as advertisement, especially on below-the-line platforms, e.g. special branding on Business Class Lounges; Trolleys; Bus shelter and elevator; Multi-storey car park development; Agro-Allied and cargo facilities (wet and dry cargo facilities; Mono rail transportation system; Surface ground transportation; Airport hotel facilities; Mixed use malls/event centre; Hangar facilities; IPP, Automated Trolley Management system; Fuel Hydrant System, and export processing zones, among others, abound.

Jos, Ibadan, Akure, Katsina, Benin City, Calabar, and other airports, have opportunities for Holiday Inns/Resort centre/Cinemas; Shuttle Bus services; Water bottling; apart from the above opportunities common to the four main international airports.

While airport concession is in top gear, a former managing director of the Nigerian Airspace Management Agency (NAMA), Roland Iyayi, backed the plan by the Federal Government to concession some Nigerian airports.

He disclosed that the airport concession would address two major problems currently adversely impacting the performance of FAAN. Iyayi listed the problems as cross-subsidisation of airports and charging aviation fees at the same level for all airports, which encourages major domestic airlines to concentrate their operations in the “Business Triangle.”

He stated that the authority’s focus on the “Business Triangle” deprives the secondary airports of the necessary traffic to generate financially positive operational conditions… hence “unviable.”

He therefore wants FAAN to develop the aerotropolis model at the Lagos and Abuja airports, develop national air connectivity, seeks the need by the Ministry of Aviation to establish a national air transportation stabilisation board and develop Murtala Muhammed International Airport, Lagos, into a strategic regional hub.

The FNAC platform also created opportunities for aviation critical stakeholders and organisations such as fuel marketers, airline operators, ground handlers and catering services organizations, among, to present their views on issues with a view to finding solutions to them.

At the forum, aviation fuel marketers, airline operators, ground handling companies and catering services among others,  decried scarcity of foreign exchange, increasing cost of Aviation fuel and other issues adversely affecting their businesses.

The Airline Operators of Nigeria (AON) expressed fears that at least three domestic airlines may close shop in the coming months due to the continuous rise in the price of Jet A1, otherwise known as aviation fuel in the local parlance.

The association raised the alarm that aviation fuel has skyrocketed to N714 per litre in some airports in the country, thereby further compounding the woes of the operators.

The stakeholders bemoaned the paucity of foreign exchange and the collapse of naira against major currencies.

Mr. Allen Onyema, the Vice Chairman of AON, warned that if the present challenge of aviation fuel was not nipped in the bud, more airlines may shutdown operations in the coming months.

Onyema, however, said that the aviation fuel challenge was not limited to Nigeria alone, but emphasised that ours is made worse because of the slump of naira against major currencies, especially the dollars.

According to AON, in order to address the challenge, the Federal Government had approved 10,000 metric tonnes of aviation fuel to the airlines, but said the carriers were yet to access it.

He said: ”That is why we ran to the government and the Federal Government has given us about 10,000 metric tonnes of fuel at the cost of N580 per litre in Lagos and about N607 per litre outside Lagos.

”This is not the only issue. Since the COVID-19 crisis, most airlines all over the world, including Nigeria have not recovered from COVID-19, except those whose countries have injected so much funds to assist them. This is no body’s fault. It just happened. Government has tried it’s best by giving us this aviation fuel. This aviation fuel can take airlines out, not only in Nigeria but everywhere in the world.

”Some airlines outside Nigeria have closed down because of the effects of rising aviation fuel. If these things are not addressed in Nigeria, it can affect the bottom line of all airlines in Nigeria.

”We have come to realise that there is little or nothing the committee set up can do because this is as a result of foreign exchange and price of oil all over the world now. The fuel marketers will sell according to what they are paying. The cost of aviation fuel has increased, even in London and every other country. Our own is worse because of the increase in foreign exchange.”

Also, Mr. Bashir Ahmed, the Vice Chairman, Aviation Ground Handling Association of Nigeria (AGHAN), decried the level of infrastructure at most of the airports, saying that it limits pthe turnaround time of operators at the apron.

According to Ahmed, the scarcity of foreign exchange further reduces the operations and expansion of ground handling businesses in Nigeria.

He appealed to the Federal Government to take a critical look at the challenges in the industry and device a mean to addressing them.

He, however, lauded FAAN for installing two explosive detective scanning machines each at the warehouses of the ground handling companies in Lagos, saying this had gone a long way to enhance the performances of the handling companies in the industry.