Experts are canvassing the need to position aviation as an economic growth engine for Nigeria similar to what the world’s busiest airports in Dubai and Atlanta have done for their respective regions.
They say there is room for growth if regulators such as FAAN, NAMA and the Federal Government create an investment friendly climate at the airports to boost investments in non-aeronautical services.
Non aeronautical services are value added to air transport facilities and they include terminal buildings with restaurants, banks, duty free shops, malls, cargo terminals, cold stuff warehouses, car parks and hotels, amongst others.
John Ojikutu, former Airport Commandant, MMA Lagos said: “To increase non aeronautical services, the aviation ministry must allow the various government service providers to operate according to the statutory laws; and carry out oversight on both government operators and private operators without undue interference from the federal government.”
The growth of non aeronautical services is being stunted now mostly because of several regulatory issues, perceived high risk by potential investors and in some cases extended litigation.
An extreme example is the land beside the Murtala Muhammed International Airport which was given out in concession 30 years ago with the objective of building a mega hotel that has not seen work begin on the site till date, due to ongoing court battles.
The FAAN however, says they are rising to this challenge and set to make non-neurological sources of funding more viable and attractive for airlines and investors to invest in.
Yakubu Dati, general manager, Public Communications of FAAN, says the five new terminals being built in the country are fitted with provisions for commercial offerings where there will be banks, eateries, pharmacies and others beyond the core business of aviation.
“The airport is a captive market, so we take advantage of this to create a situation for people to come in and do businesses and most of the airport managers are also encouraged to look at areas where they can take non aeronautical sources or revenues to be able to run the airports,” Dati said.
Dati says FAAN is looking at active public-private partnerships to help grow non-aeronautical services and businesses at the airports.
Dubai Airports and the aviation sector as a whole contributed $26.7 billion to the Dubai economy in 2013, which was almost 27 percent of Dubai’s GDP and supported a total of 416,500 jobs.
In Nigeria air transport contributed about N160 billion ($1 billion) to Nigeria’s GDP between 2010 and 2013, according to the National Bureau of Statistics (NBS).
According to the NBS data, aviation represented an average of 4.8 per cent of the transport and storage sector, and about 0.05 per cent of nominal GDP in 2014.
A source in Nigeria’s only major Private airport MM2 said Government should respect agreements signed with investors.
“Government has violated some agreements they had with Bi-Courtney Aviation Service Limited, developers of MM2 which has eroded confidence,” the source said anonymously because he was not permitted to speak publicly.
Experts have observed that as airlines are currently saddled with challenges of decrease in oil price and a falling naira, developing non aeronautical services could create revenue streams for airports and the economy at large.
Most of the time, an airport’s revenue streams depend on the number of passengers an airport serves and lower traffic equals lower income.
Nevertheless, there are some areas of an airport’s non-aeronautical operations that can still generate a high percentage of earnings, despite a decline in traffic figures.
Mary Aniche, a regular traveller at the Murtala Muhammed Airport told BDSUNDAY that she expects some services at the Lagos airports that are not yet provided, which she suggests to be as a result of lack of resources.
“By passing some of the costs on external companies, airport operators have a chance to provide passengers with improved services, or services that would not be available otherwise,” Aniche said.
She said that a service that differentiates the airport from its competitors can greatly improve the loyalty and satisfaction amongst travellers.
Airports such as Zurich, Frankfurt International, and Dubai International have teamed up with well known tobacco companies to provide millions of smokers that pass through their terminals each year with exceptional services like private smoking lounges.
IFEOMA OKEKE
