THE chairman, House of Representatives Committee on Aviation, Honourable Nnoli Nnaji has declared that immediate job loss resulting from downsizing will be the biggest challenge that may confront Nigeria in its determination to embark on privatization of some airports.
Speaking at the 2019 NigerianTravelsmart (NTM) colloquium held in Lagos, Nnaji cited how the airports presently absorb a lot of Nigerians seeking for jobs, but added that unfortunately the size of the airports has not significantly changed.
Besides, Nnaji cited what he called “the peculiarity of Nigerian airports, development model and the critical role the airport plays where it is seen as catalyst for business activities, does not necessarily make profit as long as it meets the social economic needs.”
According to him, he referred to the ongoing national security issues, through which he cautioned that the nation’s gateway may be open to abuse.
Speaking on passenger traffic, Nnaji described Nigeria as a great nation, but lamented that its air transportation usability was far below its population ratio, making some airport locations redundant while some are overly active, which he said was as a result of low middle class capacity.
He also made mention of the Act that set up the Federal Airports Authority of Nigeria (FAAN) which he said gave it the power to dominate in an area that can be open for private sector entry thus calling for a review of the Act.
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“I have had the opportunity of reading through the report of Nigeria’s Annual Airport Business Summit for 2017, 2018 and 2019, organized by FCI International limited each of these reports show consistently that the biggest challenge to airport concession in Nigeria is first and foremost the fear of ‘Job Loss’.
“The 2019 report of the Summit suggested steps that can be taken before a successful airport privatization is achieved, following the peculiarities of Nigeria’s airport development structure as itemized earlier. The Summit further suggested the unbundling of Federal Airport Authority of Nigeria, which will help to address the basic problem of job loss and unemployment.
“However, the unbundling of FAAN may lead to a more efficient and progressive airport development and an enabling environment that will attract private sector investments and tourism development in Nigeria.”
The three organizations that are being proposed to emerge from the process include: Nigeria Airport Development Agency which shall have the authority and capacity to process, supervise, monitor and forecast the development of airports in Nigeria.
The proposed agency will advise, check the capability, practicability of interests and applications in line with developmental needs, security approvals and compliance to NCAA regulations. This will help address both aeronautical and non-aeronautical business matters for both private and public airport developmental interests.
Airport Management Company PLC, another organization being proposed shall
be a limited liability company or public quoted company with less than 20% shares held by the Federal Government of Nigeria while the remaining shares shall be sold.
According to Nnaji; “This shall be a first class global company with the sole function of engaging in airport operations and management worldwide. The company shall compete and bid for the management, operation of FAAN airports and other airports worldwide. It shall be allowed to develop its structure and business model without government interference.
The third organization being proposed is the Federal Airports Property Company Ltd which shall be the owner and custodian of all Federal Airports Lands and Properties where Government can invest in airport development but not in its operations.
“The argument may be endless, but the important thing here is that we need functional airport services that will balance the observed variance of the International Air Transport Association (IATA) and the quest of Airport Council International (ACI) to liberalize the airports. The ultimate beneficiary should be the airport users so that commuters can commute safely and in a secured manner,reliably, efficiently and affordably.
“Therefore to which ever direction we choose to go, the regulatory frame work that will ensure proper guidance on the operations of privatized airports in the country or government running of airports like in Egypt and Ethiopia, will need to be instituted and this still requires further debate that will enable a well-structured economic regulation that ultimately ensures air transport safety.”