Pilgrims Airlift: FAAN Loses $4m Yearly

The Federal Airports Authority of Nigeria (FAAN) loses about $3m to $4m yearly due to the waiver on pilgrimage operations, the Managing Director, Capt. Rabiu Yadudu, has said.

According to him, the government’s policy of waiving 65 per cent of gross revenue accruing from annual pilgrimage operations is eating into the revenue of the organization. He spoke in Lagos when members of the House Committee on Aviation paid an oversight visit to the organization.

Economic Confidential learnt that with the policy on pilgrimage operation, airport charges payable by operating airlines running into millions of dollars were highly subsidized by up to 65 per cent.

This, the MD said, “On an annual basis, between $3 million – $4 million is being waived and this amount is not passed onto the passengers but to the airlines.” Speaking further, the MD stressed the need for the review of FAAN rates/tariffs on services, saying the last time FAAN reviewed charges was in 2011.

Also, the authority called on the federal government to assist it in recovering debts owed by Aero and Arik Air, the two airlines being managed by the Assets Management Corporation of Nigeria (AMCON), another government agency. He said given the huge infrastructural deficit facing the organisation and the huge funding required, the authority had devised several strategies to shore up its internally generated revenue (IGR).

The measures, he listed, included the ongoing full automation of car parks, cargo operations and other revenue points; metering of all customers to ensure current and full amount are recovered for electricity consumptions; introduction of pay-as-you go system on some revenue heads especially with difficult customers.

“We seek government support in collecting AMCON related debts such as Arik and Aero etc,” he said. Yadudu said most of the 20 airports under the purview of FAAN were inherited three decades ago, and required upgrade to meet with the rising passenger growth.