Operators bemoan low contribution of 22 airports to economy

Some operators in the aviation industry have expressed worries over the poor contribution of the country’s 22 airports to the Gross Domestic Product (GDP).

The contribution of the airports has been put at a mere two percent, a development that has made stakeholders in the sector to call for the privatization of the entire 22 airports to make them perform optimally and also contribute maximally to the GDP.

Among these callers is the former Managing Director of the Federal Airport Authorities of Nigeria (FAAN), Richard Aisuebogun, who said the privatization, would enhance their income generation capacity and deliver on efficient services.

The former FAAN boss who spoke in Abuja at the 2nd Airport Business Summit and Expo, which ended yesterday, said getting the private sector involvement would give the airports the operational freedom and a greater measure of financial performance.

He lamented that the 2 percent airports’ contribution to GDP comes mainly from the flagship airports, adding that the time has come for stakeholders to start working on the viability of the other airports scattered across the country.
The entire airports contribute perhaps about 2 percent to the GDP. “If you break that down, on a proportionate scale, how many airports add value to the entire GDP. Perhaps, it is just the flagships and we need to go beyond the flagships today.

Giving instances of South African and Ghanaian airports that have transformed from airport authorities to airport companies, with the private sector shareholders getting involved in its operations and business development, he said the transformation, has made the airports to be efficiently managed.

The former FAAN boss stressed the need to encourage private investors into the country’s airport operation, so that the “unviable airports will become Strategic Business Units (SBUs), once this is done, these airports will now be challenged to raise benchmarks and operational standard for efficiency” he averred.

Also speaking at the same event the current boss of FAAN, Mr. Saleh Dunoma expressed the readiness of the agency to partner with genuine private investors for a mutually beneficial relationship.

Dunoma, who was represented by FAAN’s Acting Director of Commercial and Business Development, Mr Toyin Okpaise said the sector is strategic in the Federal Government’s quest to diversify the economy and create wealth.

Aisuegbedion said: “We need to now begin to make the rest of the nation’s airports viable by investing in non-aeronautical activities. Out of the over1600 airports across the globe, 1000 handles less than 1 million passengers annually. The challenge is therefore obvious.

“The tendency is that if they are companies under privatized commercialized model, then they would have to depend largely on non-aeronautical revenues. They will need to now depend on other activities within the airport to enhance their revenue platforms, therefore making them more business minded, rather just being operations as it is.

“This does not require ours or your personal funds. We need to encourage private investments to cone into the airports and develop it in terms of non-aeronautical activities, so that the unviable airports will become Strategic Business Units (SBUs).”
According to him, it is not until Nigerians began to look at the airports as a business unit that is accountable financially, economically and commercially, including operations and safety activities, that we may be able to develop an airport that will add to the Gross Domestic Product (GDP), of the country.