The Minister of Aviation and Aerospace Development, Festus Keyamo, has disclosed that the Federal Government is operating several airports across the country at a loss, saying the situation informed the decision to introduce greater private sector participation in airport management and development.
Keyamo spoke on Thursday at the signing of the concession agreement for the Jeremiah Obafemi Awolowo International Airport, Port Harcourt, popularly known as Port Harcourt International Airport.
He said revenue generated from some of Nigeria’s major airports was being used to sustain other airports that were not financially viable.
“The reasoning behind it is that some of our airports are being run at a loss. We should say it the way it is. The MD of FAAN is here to attest to that.
“To lay it bare before you, we make so much money from some of our primary airports, so much money from our major gateways, and then most of those profits are ploughed into running some of the other airports that are run at a loss,” Keyamo said.
The minister explained that operating an airport involved substantial recurrent costs, including payment of personnel and provision of power, while the government was also constrained in its ability to fund further expansion.
“If you know what it means to run an airport from morning to evening, you have to pay personnel, you have to run diesel generators, you have to do so much. And government is also very constrained for funds to even expand the use of these airports, especially the non-aeronautical parts of these airports,” he said.
Keyamo maintained that Nigerian airports had significant potential beyond aviation-related services, but government funding limitations made private sector participation necessary.
“So much can be done in terms of the non-aeronautical parts of these airports. There is so much potential to expand the use and operation of these airports. But because government is also constrained, we have to bring in private participation to help us to run some of these airports,” he said.
He disclosed that the concession agreement for Port Harcourt International Airport was signed with Port Court Airport Company for a period of 30 years.
Keyamo also said the government had engaged labour unions before completing the concession process, similar to the approach adopted with the Enugu Airport concession.
“We have gone through all the processes with the unions. I am sure before this signing ceremony, you saw that we had a session with the unions first.
“Just the same thing we did with the Enugu Airport, to stave off any kind of protests,” he said.
The minister assured airport workers that the concession would not lead to job losses and that their existing conditions of service would be preserved.
“The conditions of service should remain the same, and that we should give them that comfort.
“The comfort we have given to the workers in the airports we have concessioned so far, which is Enugu, and of course, Port Harcourt now,” he said.
Also speaking before the signing of the concession agreement, the Group Executive of R28 Holding, promoters of the project, Ayo Asuquo, said the concessionaire would seek to introduce standards comparable to those obtainable at airports in other parts of the world.
He said: “The standards we enjoy in other parts of the world, that we will bring it to bear. That the facilities we see in well-put-up airports, that we will bring it to bear.”
Asuquo said the goal was to create value for all stakeholders, including the host community, airport staff, government and investors.
“Our goal is to be able to bring value to all stakeholders, community, staff, government, and investors. So we are going to open the investment to anybody who is also interested,” he said.
He added that the long-term ambition was to position Port Harcourt International Airport as a major aviation hub for the Gulf of Guinea.
“Our dream is that Port Harcourt International Airport will be the hub for the Gulf of Guinea.
“There is so much activity in the Gulf of Guinea. But nobody is hopping. Port Harcourt is well-positioned for that. And this is our promise to you,” Asuquo said.
Post Title: “Some Of Our Airports Are Being Run At A Loss” — Keyamo Explains FG’s Push For Private Sector Participation By Naijaonpoint.