A Gateway to Growth

0

By Saleh Dunoma

To harness their potential as gateways to growth, African airports must develop infrastructure, modernise processes, innovate and diversify revenue sources. No government today can, on its own, muster the funds required for the infrastructure, technology and human capacity development.

Collaboration and cooperation with the private sector as well as with regional and international bodies like the Airports Council International (ACI) and International Civil Aviation Organisation (ICAO), however, can turn our airports into engines of growth. The role of aviation as a catalyst for sustainable socio-economic and human development can’t be overlooked. In Africa, the sector provides 6.8 million jobs (direct and indirect) and currently generates $72.5 billion in GDP.

For over a week, the Federal Airports Authority Nigeria (FAAN) hosted over 300 international and regional aviation experts in Lagos under the aegis of ACI Africa. Delegates at the conference all agreed that our airports must move from being public service providers to efficiently managed commercial enterprises.

The transformation of African airports is long overdue. Passenger traffic in this region of the world grew by 5.9% between 2016 and 2017, the third after Europe and Asia-Pacific regions. Though income from aeronautical revenues (per passenger) was among the highest in the world, airports in the region generated the least overall per passenger in 2016. In the same period, African airports’ non-aeronautical revenues were the lowest: just over 20% compared to the world average of 39%.

African airports lag the world when it comes to generating revenues from retail concessions, car parking, property and real estate, car rental and food and beverages. 

According to the World Economic Forum’s 2017 Travel & Tourism Competitiveness Index (TTCI), a benchmark that measures development of the Travel & Tourism sector in 136 economies, travel and tourism in sub-Saharan African economies remain mostly untapped despite sustained economic growth. Travel cost, connectivity and airport infrastructure are the biggest barriers.    

With higher business potentials than mature travel and tourism destinations, African airports must explore ways to transform their business models to meet the challenges of upgrading infrastructure and capacity, improving services and transforming customer experience.

In other regions, a more commercial focus, spurred either by change of ownership or business models, has seen airports discard their perception as mere utilities. Infrastructure upgrade: more commercial space, better designed buildings, improved retail planning have helped airports around the world to diversify their revenues.

In addition to increasing aeronautical and terminal capacity of airports, the best managers of airports in the world run them as businesses and pay attention to partnerships, operational efficiency, customer service and optimal capital expenditure.

To make this transformation happen, a change of mindset is necessary. Technology, business innovations and human capacity development are also critical variables.

Transforming Nigeria’s airports

Faced with financial pressures and budget constraints, more African governments are granting concessions to the private sector to build new airports, and invest in or take over the management of existing ones.

 Private sector investment in African airports has played a critical role in improving services and increasing revenues. At the Murtala Mohammed International Airport, a multi-storey car park was built by an investor in 2017.

 Deliberations at the conference reiterated the role of private sector partnership in the transformation process. Such partnerships are critical to the goals of the roadmap for the sector which was approved in 2016. So far, we have attained international safety certifications for the international airports at Lagos and Abuja – the objective is to certify our five international airports.

 The construction of new terminals at all five airports is expected to expand passenger handling capacity to 15 million a year. Already, the executive order to remove bureaucratic bottlenecks and constraints to doing business in Nigeria has eased the experience of travellers at our airports.

Last year, Nigeria signed the agreement to become one of the ACI global training centres, to further advance the goal of human capacity development in FAAN and in Africa. The first training after the agreement was conducted in December 2017 where Nigeria received participants from other African countries.

To better aid our understanding of passengers’ views and their needs, FAAN signed up to ACI’s Airport Service Quality (ASQ) programme, the world-renowned and globally established benchmarking programme measuring passengers’ satisfaction.

ASQ which measures passengers’ reactions to access, check-in, security, finding way, airport facilities and environment ranks airports around the world based on their performance. Being ranked alongside our peers in the industry will keep us up to date with service standards throughout the world.

Getting feedback from thousands of passengers who pass through our busiest airports daily will help us focus our priority, assist the process of changing mind-sets, determine the technology to deploy as well as define our approach to service delivery.

Customers’ needs and expectations drive change. With a better understanding of what customers consider important, FAAN can work on the capacities, processes, procedures and policies to develop and deliver better service to customers.

With feedback on passenger satisfaction, we can determine whether or not to innovate or adopt existing technologies to improve efficiency and profitability. 

Backed by the Presidential Enabling Business Environment Council (PEBEC), FAAN is committed to infrastructural development and the implementation of policies aimed at facilitating the growth and sustainability of our airports.

Overall, it was a delight to host the 59th ACI Africa Board and Committees meetings & regional conference and exhibition here in Lagos. In addition to the honour of hosting the conference, it was an opportunity to showcase recent achievements in the sector and our openness to investments. It also demonstrated yet again the commitment of ACI to develop human capacity, improve standards in areas such as safety, security and service.

Dunoma is the Managing Director FAAN & President, ACI Africa Executive Board