FAAN looks southwards to boost revenue from non-aeronautical sources

Federal Airports Authority of Nigeria, FAAN, is exploring more channels of revenue generation and the Ibom airport, Owerri cargo terminal and the newly commissioned Anambra cargo terminal is top on the list. The agency intends to achieve this in order to promote investments in airport infrastructural and cargo terminals and facilities to enhance air cargo operations.

Director, commercial and business development FAAN, Sadiku Rafindadi said, FAAN is committed in putting strategies in place to increase its revenue base through its aeronautical and non-aeronuatical sources.

In a delivered paper titled: Improving Airport Non-Aeronautical Revenue Stream” at the opening of the Business Summit on Cargo and Aero logistics and Drone Expo at the Lagos, Rafindadi said, many successful airports in the world depend more on non-aeronautical revenue sources arising from modern facilities and the provision of services that draw both passengers and non-passengers to the airports.

He explained that, the new international airport terminals when completed apart from Abuja and PortHarcourt already commissioned would bring in 15 million more passengers and thus increase revenue for the airports.

“The new terminals shall open up potentials for tourism, businesses and effective use of Bilateral Air Service Agreement, BASA within partnering countries. The terminals provides more space to cater to passenger preference, exciting retail facilities, Duty free shops, food and beverage outlets, advertising, car parking etc”.

Among the 22 airports in the country, Rafindadi in terms of revenue generation from January -December 2020, MMA generated 58%, NAIA, 21%, PHC 4%, Kano 4%, other airports 13%.

“Nigerian airports have enormous potential for high gross earnings if we’ll harnessed, each airport have their peculiarity in terms of tourism, agriculture, mining and aerotropolis to better improve their viability”.

To shore up its revenue generation, he said FAAN was at looking at increasing the share of non-aeronautical activities from below 30% to 40%, adding that this would be done, ” by focusing on investments in airport infrastructures and technology solutions to drive cost optimization, creating enabling environment and improving none aeronautical revenue streams”.

He disclosed that, because about N576 billion ($1.2b) is lost to medical tourism yearly in Nigeria, in addition to its airport clinics being commercialized, FAAN is designating some land area at the airport to harness non- aeronautical opportunity. Among the top contributors to nonaeronautical revenues he listed, include car parking and access gate, advertising among others.

Nigerian airports have the ability to grow their none aero revenue considering the geographical location of the country as a hub, the available land, climate, competition and consumer demand. With the vast land available at our airports for business, FAAN is open to Foreign Direct Investment FDI and partnership with corporate organizations on different public, private partnership (PPP) business models through built, operate and transfer (BOT), joint ventures (JV’s) and concessions to explore opportunities for improved none aeronautical revenue streams”.