FAAN considering reduction in landing fees to attract investors to smaller airports

The Federal Airports Authority of Nigeria (FAAN) says it is considering various incentives and potential concessions to attract investors to smaller airports across the country.

Olubunmi Kuku, the managing director (MD) of FAAN, spoke on Wednesday at the ongoing airport business summit and expo 2024 in Lagos.

Kuku said one of the strategies under consideration is the reduction of landing and parking fees at smaller airports.

This initiative, according to Kuku, aims to encourage airlines to fly into these airports or use them as their home base, thereby making them more economically and commercially viable.

“The congestion at Lagos airport has made it eminent to look at driving home base to other airports and increasing markets,” Kuku said.

She said the industry needs more investments, stressing that the government cannot provide what will sustain the industry but can only provide an enabling environment.

“What I call on you for is, for us together, to explore the private sector model, the private sector models that actually work and put in legal entity frameworks that allow those models to favour and protect FAAN,” she added.

The MD acknowledged the challenges local airlines encounter, including issues related to fleet size, financial constraints, insurance, and foreign exchange, adding that these challenges should be considered.

Kuku said some airports are operating below capacity, specifically Minna airport, which has 122 staff members but is currently not operational.

‘FAAN READY TO SIGN SERVICE LEVEL AGREEMENTS’

Speaking on service level agreements (SLAs), Kuku said while the authority is ready to sign SLAs, the quality of service will be critically assessed with a baseline in mind.

SLA is a contractual agreement between a customer and a service provider on what services the latter will provide and the service standards the provider is obligated to meet.

“It is also very important that we really look through service quality and I know I have heard everyone talk about SLAs and when FAAN is going to sign one,” she said.

“I stand before you here today to say we are ready to sign a SLA. However, we will sign that SLA with a baseline in mind, and I agree that the SLAs position us for growth that are achievable.

“I also want to quickly state that where public-private partnerships have had a lot of progress, that is not the case, but that is where public-private partnerships have had significant success stories.”

The MD, however, said the implementation of these strategies would require approvals from the federal ministry of aviation and aerospace development.

Comparing the infrastructure in Nigeria to its counterparts, she said the industry is barely scratching the surface, hence, the need to leverage technology and innovation.

Kuku commended Fortune Idu, the convener of the summit, for bringing together various stakeholders, including airport regulatory agencies, security agencies, unions and airport managers.