FAAN Implements New Passenger Charge as Revenue Drops 95%

Rabiu Yadudu
Managing Director and Chief Executive Officer of FAAN, Capt. Rabiu Yadudu

Ndubuisi Francis in Abuja

Federal Airports Authority of Nigeria (FAAN) is set to begin the implementation of the new Passenger Service Charge (PSC) for domestic and international flights, as part of overall measures to bolster revenue generation.

FAAN’s finances are in dire straits as revenue has fallen by about 95 per cent due to the impact of COVID-19, and other cost-related inflation.

PSC increase, which would become effective on Tuesday, would culminate in a 100 per cent increase for domestic passengers, who would thereafter pay N2,000 instead of N1,000.

Flights within the West African sub region would attract $50 per passenger as against the current $20, while international flights would move from $50 to $100.

Though the new charge would be built into air fares, THISDAY gathered that it would not lead to a hike in the fares.

FAAN said its revenue dipped by as much as 95 per cent necessitating measures, including an increase in PSC to continue to render the desired standard quality service for flight operations.

FAAN Managing Director, Capt. Rabiu Yadudu, told journalists in Abuja yesterday that airport management is capital-intensive, adding that the agency has not increased the PSC since 2011 despite all the huge capital investments at the airports.

Yadudu noted that the current N1,000 PSC is no longer sustainable as it does not correlate with realities of cost-related inflation, which the Central Bank of Nigeria (CBN) put at 12.82 per cent.

“FAAN, until late 2019, was collecting the naira equivalent of PSC at an official rate of N305.50-N344.38 to a dollar when airlines were collecting a subsisting market rate of N360 to a dollar,” he added.

According to him, the International Civil Aviation Organisation (ICAO) recommendation in Doc. 9562 stipulates that revenue generated by airports be transparently re-invested wholly in operating and developing airport facilities.

Yadudu stated that the federal government was increasing its direct deduction from FAAN to 40 per cent from 2021 and with such a deduction, the agency would have a shortfall of more than N16 billion on overhead cost.

“The authority is, however, engaging the federal government to exempt her from this deduction. It has therefore become imperative to review the Passenger Service Charge (PSC) from N1,000 to N2,000 per passenger.

“This review, which takes effect from 1st September, 2020, has already been communicated to the airlines. We therefore implore stakeholders, airport users and the general public to bear with us as FAAN is laden with so much overhead cost of operation,” he said.

As preparations for the resumption of scheduled international flight operations into the country continue, he said it has become necessary to roll out new advisories for airlines and air travellers.

According to him, as soon as these are ready, FAAN would communicate same to the public.

On the number of international airlines embarking on flights into Nigeria from September, FAAN chief executive said the Nigerian Civil Aviation Authority (NCAA) and the Ministry of Foreign Affairs were working out the details that would be communicated to FAAN for its preparations.

Yadudu said the federal government’s efforts to renew the nation’s airport infrastructure and ensure safety in the industry had come at a huge cost.

He recalled that some of the five new terminals at the international airports have been completed while others are at advanced stages of completion.

Also, apart from other efforts to reposition the sector, the government has been reconstructing some airport runways to ensure safety.

On the protocols introduced at the airports in the wake of the COVID-19 pandemic, Yadudu, who admitted that a few highly-placed Nigerians had violated the new order, however, expressed gratitude that the new protocols have been working almost seamlessly.

He explained that NCAA was handling the cases of the few violations and would come up with a position soon.

The cooperation of air travellers, he noted, has been particularly impressive, adding: “We shall continue to urge all airport users to comply with the new policies and help keep the travelling public, and our nation safe and healthy.”

He assured travellers that FAAN would continue to review and update the COVID-19 protocols in line with the updates from the World Health Organisation (WHO).