AIRPORTS FOR LEASE: Is FAAN A Fun?



The Federal Airport Authority Of Nigeria (FAAN) is a public enterprise owned by the Federal Government of Nigeria. Today, there is a speculation that this dispensation is on the move to lay off their responsibilities to private participants, on an agreeable service terms. The planned mode of privatization is concessioning beginning with the Nnamdi Azikwe International Airport (NAIA) Abuja on a pilot basis before the others, including: MMA Plc comprising Murtala Muhammed international airport Ikeja, Lagos, Akure, Ibadan, Ilorin and Benin airports ,MAKIA Plc comprising Maiduguri, Sokoto, Yola and Katsina Airports,PHC International Airport Plc comprising Port Harcourt, Calabar, Owerri, Enugu Airports and Abuja Plc comprising Abuja, Kaduna, Jos, and Minna Airports.

The market for airport services is potentially large. Out of the population of 120 million people, if 10% travel by air in a year, a minimum of 24 million travelers are expected to use the airports for a return trip. It can therefore be inferred that there is a 25% potential capacity utilization of Nigerian airports. FAAN currently enjoys the monopoly of managing the Airports in Nigeria . However, the service of the Aviation Industry is threatened by competition posed by road transport mode. It is expected that new strategies will be put in place to counter the shortfall in revenue caused by the competition posed by alternate travel modes. The poor state of Nigerian Railways has ruled out a major Competitor in passenger movement. It is hoped that the following strategies will enhance airports’ performance to maintain the competitive edge, Output and Marketing Outlets. The Authority manages 21 airports namely: MMA, Kano , Port Harcourt , Abuja , Maiduguri , Kaduna , Calabar, Enugu , Owerri, Jos, Sokoto, Yola , Benin , Minna, Ibadan , Akure, Makurdi, Katsina, Ilorin , Zaria and Osubi airports. Presently, it has potential output of generating and collecting revenue of about N18 billion annually.

FAAN operates all the 21 airports in Nigeria and these are distributed across the country with five of them providing links to other countries. The recent strategy in airport development has shifted from mere site for runways and terminals to being global cities with support offices, hotels, retail and industrial facilities, etc. The list of some airlines that patronize the Nigerian airports are British Airways ,Bellview , KLM, E.A.S., Mobil, Lufthansa, A.D.C., Total , Air France, Chanchangi, Texaco ,Alitalia, Virgin Nigeria, Agip , Cameroon Air, Freedom Airline ,Arik Air, Egypt Air ,Albarka Airline, Juhi, Ethiopia Airways , Skyline Aviation , Ghana Airways , AAL Others,Iberia Airways, Sosoliso, Federal Government, Kenya Airways, Afrijet, Diplomatic Tours,Middle East Airline,Capital Airline 3. Nigeria Air force Kabo Air, NNPC, Sabena AirCharter Operations, Nigeria Police AirShuttle,Saudi Air, Bristow Helicopters, South African Airways, Aero Contractor , Sudan Airways , Dana/Afri Air, Swiss Air , Premium Air Shuttle, Air Gabon, Caverton, Virgin Atlantic, Afret Air, African International, Balkan, Air Niger and Tap Air. Traffic statistics report for the last three year indicated that the business performance of FAAN for the last five years and the overall performance of FAAN relative to the critical success factors in the aviation sector.

However, with the recent development of airports shifting from mere site for runways and terminals to global cities with support offices, hotels, retail and industrial facilities, the Authority can generate more. Product Pricing Policy FAAN’s pricing policy is guided by the policies, rules and regulations of the Aviation Industry for airport pricing. FAAN has limited control over the fixing of rates and charges on aeronautical sources since these charges often require approvals from the Federal Government. These include the Product Pricing Policy, Landing & Parking and Domestic Passenger Service Charge (Internal & Domestic), Fuel Charge Port Charge Aeronautical sources subject to Government approval, Rent/Service Recovery Charge (SRC)/Concessions Fixed by FAAN: Charges are fixed based on prevailing market rates, Utilities: Electricity Water Telephone Adoption of government rates with 5% increase for administrative expenses/charges


Maintaining and building airports is an expensive business. Fuel tax revenues are often not enough to cover the costs. Some budget-strapped states have turned to alternative funding for some domestic airports.. Rather than pay for airport maintenance and construction themselves, they wish to enter into long-term lease agreements with private companies. These investors take over an agreed upon airport or section of airstrip, tarmac or runway and charge users a toll. That's how they make their money. And none of the profits are shared with taxpayers.

The government wishes to collaborate with between public bodies, such as local authorities or central government, and private companies to limit airport choices, operators can get away with charging higher revenues since They may not care who can't afford those fees, as long as their profits stay healthy. They also don't care how much traffic is diverted to more dangerous air space in an effort to avoid the extreme charges. Such concession could facilitate the sharing of expertise, experience and risk. After a competitive bidding process, this administration is entering into an agreement with capable corporate body to management four international airports; to move forward with the implementation of a rapid transit network.

The concession is an advocate that would facilitate the formation of public-private partnerships at the stipulated airports, where appropriate, and to raise the awareness of governments and businesses of the means by which their cooperation can cost effectively provide the public with quality goods, services and facilities. It brings to the partnership extensive international experience in planning and implementing major transit infrastructure projects. The partnership provides the following benefits to Nigerians: Faster implementation of the rapid transit network and its associated benefits, Application of private sector business practices and innovative technologies to generate efficiencies and reduce implementation costs Sharing of financial risk between the private and public partners — an important consideration for major, long-term projects ,Obtaining financial support from senior levels of government to implement a project of this scale — both the Federal Government support the delivery of major infrastructure through public-private partnerships


In addition to these benefits, the Airports will ensure that the partnership operates with appropriate public direction, control, accountability, and transparency. The Corporate body would: Maintain responsibility for setting service levels and fare policies ,Retain ownership of the rapid transit system , Have voting majority in the partnership ,Receive regular reports as part of the ongoing process ,Incorporate an open, transparent price analysis by an independent auditor to establish the final Design/Build Contract price in order that the project provides good value for the money being spent.

The Nigerian Civil Aviation Sector is in for a major overhaul over the next few years. In the wake of major policy changes taking place (due to a shift in the mindset of the government from considering air travel as elitist to making it available for the common man) and liberalization of air travel services, a sharp increase (5-10%)in air traffic is expected. The airports in Nigeria are inadequate for handling this increase and with Nigeria hosting the FIFA u-17 world cup in 2009, upgrading airport infrastructure assumes prime importance. The problem is further compounded by the lack of resources with the government. Hence, the recent thrust on airport privatization. This paper examines the different modes of providing airport infrastructure in India . Interestingly, these range from government owned airports (use of civil enclaves and government operated airports) to publicly held airports ( Nnamdi Azikiwe International Airport ) and airports built/upgraded through Public Private Partnerships (PPP), like MMA (Ikeja), MAKIA ( Kano ) and NAIA ( Abuja ) airports.

The economic and management issues confronting our airports differ considering governance reform has varied aspirations for their airport infrastructure. Consequently, the federal government needs managerial performance and financial resources appropriate for their situations. Beside it is explained that three widely used governance modes effect managerial and financial resource acquisition and, simultaneously, determine returns to private shareholders and other stakeholders, such as users, employees, the state and local communities. The task confronting the state is to choose a governance mode that links its aspirations with the inducements needed to attract private sector resources. In other words there are ‘horses for courses’ and states intent upon airport governance reform need to consider both the situational context and the kinds of resources needed to accomplish their objectives.

The beneficial claims made for the airport reform are considerable. In the airport business much attention has focused upon the relative efficiency of private sector management and the translation of efficiency gains into lower user charges. Free from government constraints managers can focus upon operational and service improvements that provide consumers with greater convenience and choice. Given the correct incentives managers can focus upon productivity enhancements through better people and facilities management .

Our prior audit found that inspection areas were designed and constructed improperly and lacked important surveillance and communication equipment. The Federal Airport Authority Of Nigeria (FAAN) had not pursued a program to require upgrading of older facilities. In addition, the FAAN did not enforce provisions of the Act against airlines when facilities were not acceptable. The FAAN did not develop performance indicators, under the Government Performance and Results Proposal, to fully address the adequacy of facilities.

A pilot involved in an Air Traffic incident should proceed as follows: During flight use the appropriate Air/ground frequency for reporting and incident of major significance, particularly if it involves other aircraft, so as to permit the facts to be ascertained immediately. As promptly as possible after landing, submit a completed air traffic incident report form; confirming a report of an incident made initially in accordance with (a) above, or for making the initial report on such an incident if it had not been possible to report it by radio; For reporting an incident which did not require immediate notification at the time of occurrence.

An initial report made by radio should contain the following information: Type of incident, e.g. near collision; Radio call sign of aircraft making report;
Position, heading, or route, true airspeed; Flight level, altitude or height, and aircraft attitude; Flying conditions (e.g. instrument meteorological condition (IMC) or visual meteorological condition (VMC); Time of incident in coordinated universal time (UTC); Description of other aircraft, if relevant; Brief description of incident, including when appropriate, sighting distance and miss distance.


The Air Traffic Incident report form initially reported by radio should be submitted by the pilot to the ATS reporting office of the Aerodrome of first landing. The pilot should complete sections 1 and 2 supplementing the details of the radio report as necessary. Where there is no ATS reporting office, the report may be submitted to any other ATS unit.

Following an Air Traffic incident the ATC unit involved should proceed as follows:Identify and designate the incident in accordance with the procedure, the aircraft is bound for a destination located within the area of responsibility of the ATS Unit in whose area the incident occurred arrangements should be made with the operator to obtain the pilot’s report on landing, If the aircraft is bound for a domestic destination, the ATS Unit of destination should be requested to obtain the pilot’s report on landing, If the aircraft is bound for an international destination, the ATS Authority at destination aerodrome should be notified and given full details of the incident (by NCAA) and requested to obtain pilot’s report, The Civil Aviation Authority of the state of Registry and the state of the operator should be notified of the incident by the state of occurrence (by NCAA) together, with all available details.




Although construction and renovation projects have improved some facilities, some new deficiencies at all our airports should be reviewed. Failure of tested security systems and equipment remain inept. FAAN staff at some airports said they did not conduct monitoring and surveillance activities because they were understaffed. Consequently, airports were still vulnerable to illegal entry, escapes, injuries, and hiding or disposing of contraband or documents. In our judgment, these conditions existed because FAAN headquarters did not notify airlines, airport authorities, or FAAN airport staff of the deficiencies noted in the prior supervisions. FAAN officials believed that the power of the airline lobby kept the organization from using its authority to enforce available sanctions, that security was not the FAAN's responsibility, and that the failure of facilities to meet standards was unrelated to serious consequences. FAAN staff did not believe that escapes, assaults, or injuries resulted from inadequacies in facilities.
International airports for the entry of aliens shall be those airports designated as such by the Corporate body…An airport should not be so designated…unless adequate facilities have been or will be provided at such airport without cost to the Federal government for the proper inspection and disposition of aliens, including office space and such temporary detention quarters as may be found necessary. The designation of an airport as an international airport for the entry of aliens may be withdrawn.

FAAN had not implemented some recommendations to; communicate needed improvements to airlines and airport authorities, develop a program to review existing facilities, apply sanctions made available by the Act when airlines fail to provide suitable landing facilities, and develop performance measures required by GPRP to assess her efforts to obtain suitable facilities. Consequently, airports were still vulnerable to illegal entry, escapes, injuries, and hiding or disposing of contraband or documents. In our judgment, the condition of security systems and equipment has resulted in increased risk that aliens can avoid the inspection process. There have been escapes, injuries, and further weakening of the FAAN's ability to perform its mission.

At the exit conference, FAAN staff indicated they felt that issuing the ATR sufficiently addressed the need to communicate needed improvements. They also felt they were making progress with their program to review existing facilities, and said they had some success in enforcing compliance with facilities standards.

In my own view, the beliefs among FAAN staff hindered their ability to implement these recommendations. Officials should establish a comprehensive plan to review existing facilities and performance measures to judge the progress of upgrading airport facilities. Once the FAAN does this, it will be able to evaluate its efforts to obtain suitable facilities. When efforts fail, FAAN officials should hold airlines accountable by exercising its authority to impose sanctions. Unless these measures are taken, we believe that FAAN airport facilities remain vulnerable to illegal entry, escapes, and smuggling of aliens and contraband into this nation, which compromises the security of our borders.


L.Chinedu Arizona-Ogwu
Founder; Nigeria4BetterRule
Writes from Oyigbo; Rivers State