Uriesi: Remodelled Airports Will Quadruple FAAN’s Revenue

07 Jun 2013

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 George Uriesi

The Managing Director of the Federal Airports Authority of Nigeria (FAAN), George Uriesi said the upgrade of Nigeria’s airports will boost the agency’s revenue and put the country into reckoning as major air transport nation in Africa. He spoke to Chinedu Eze in Enugu. Excerpts.

There is an ambitious remodelling project going on at the international terminal of the Lagos airport. What are the strategies you have to boost the non-aeronautical revenue?
Lagos is going to be the eye opener. The revenue from that terminal is going to more than quadruple because the commercial offering after the remodelling is going to be more than five times what we have before. There was even nothing there before but now is when you are going to see Lagos make money. We should have the E wing up and running by the end of May. We started testing the belts since the last two weeks and we have been adjusting and adjusting. That alone will change the arrival experience at the airport. When we close that, there is the old one which we have to take out the belt, clean it up, make it look like the other parts and then open it up so it becomes a very big single arrival hall with high capacity baggage belt. So work will be going on there for another three months there but passengers will arrive in a nice place.

We are going to move that central security and Immigration area to this opened E hall. From there we have six or seven Immigration points but we will move into a place we will have 40 Immigration points. That is going to be a major change in the passenger experience because you don’t have to queue and it is air conditioned with its own independent air conditioning so if one fails, the whole airport will not fail. I believe with the changes we are making, Nigerians will begin to have a different airport experience.

How is FAAN going to process both international and domestic passengers from one terminal?
We now have an integrated domestic and international terminal, so we now have to carter for both departing and arriving, but it is mainly a domestic terminal. The beauty is that it is designed in such a way that when the international terminal is finished, this will be used as domestic terminal. It is a flexible design but I think the most interesting aspect of it is the high street concept where everybody can come in and you can walk from one end of the terminal to the other and there will be a lot of shops in the next few weeks and months. By the time these shops will be occupied, offering different types of products and services will have the comfort to choose where they want to stay and shop or drink or eat. The airport is a full service airport.
Enugu now has the capacity for the next 10 years, depending on the growth, will be capacity sufficient with the international terminal coming on board. We hope to see the demand growing faster.

What is the arrangement like between the Chinese investors and the Federal Government in terms of MoU for the international terminal project?

It is a very straightforward agreement. It is a loan obtained on a very, very favourable terms; you will look very hard to get a better deal from them. In exchange for that, one of their best construction companies will construct the airport. We retain the consortium, the architecture and the project management, while the construction is with the Chinese firm. We are working together with them and we are looking forward to a very quick construction period of 15 months from start to finish. They are fully mobilised as you could see; so as the President has just laid the foundation stone building starts straightaway.

The minister of aviation said the cost of the project is N13.3 billion. Is this the cost of the building structure alone or with the facilities?
It includes the complete building and all the appurtenances like air conditioning and generators, the car park in front of it and all of it for N12 billion and then the perishable cargo is N1.3 billion and all together are N13.3 billion.
Now, let’s look at Enugu being designated as international airport, while Port Harcourt is already designated as international airport, how do you look at the capacity in terms of passenger movement?

The fact is that politically you cannot stop different regions from developing airports. Every region aspires to its highest economic potential, so it will be very difficult, following extant rules to reiterate the theories that if you have international airports close together it stifles everyone. By that theory you can then say, Enugu you should not develop to its capacity because it will cannibalise Port Harcourt. If Enugu wants to aspire let Enugu aspire and what usually happens is that this theory is often turned on its head because you then find that you have multiple international airports and sufficient customs across the board from passengers. I know a lot of passengers from Nigeria are from the South East region. They will now have the opportunity to travel directly from Enugu to wherever and back to Enugu without having to go somewhere else. Let’s see how it goes. Some airlines have indicated interest. Based on their numbers they know there is business here. Within the next few months there will be an international carrier coming to Enugu.
Looking at the economic value of the remodelling process, how do you intend to boost the revenue of FAAN and in turn boost the economy of this country?

You take Enugu for example, if Enugu was making a N100 a month and FAAN was spending a N1000 on it, the net loss was N900. With the remodelling, this N100 Enugu was making is going to become N800. It may become profitable as an airport simply because of the commercial offerings it has or at least it may pay off its bills and save FAAN from subsidising it. So as we replicate all these, the income from every airport is going to go up in my estimation by at least 500 per cent. The former terminal in Enugu had about four shops and they were very rundown rickety shops that were not serious. Now we are going to have serious players. People who travel are more or less elite people who have a little bit of money. They have income that they can spend on other things rather than just life; eating and housing and all that. If you provide those commercial offering in an airport you can be sure that people will respond. This airport is going to offer 60 shops from about four. So you can imagine the revenue profile that is coming from there.

George Uriesi was born in Lagos on 08 August, 1968. His career spans more than 20 years, mostly in airline and airport operations as well as both the safety and economic regulation of the industry. Having graduated from Bendel State University Ekpoma (now Ambrose Alli University) in 1991 with a BA (Hons) degree, he served with the then Nigerian Airports Authority and worked for ADC Airlines PLC until he moved to South Africa in February 1996 to join multi-national consumer products' company, Procter & Gamble South Africa, as Products Supply Manager.

He returned to the aviation industry 3 years later to play key roles in the institutional reform and transformation of South Africa's air transport industry, joining the executive team of the South African Civil Aviation Authority, first as Executive Manager for Aviation Safety Promotion and later General Manager: Aviation Safety.

Tags: Airports, Business, FAAN, Featured, Nigeria, Revenue

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