The Federal Airports Authority of Nigeria on Thursday said its revenue had dropped by over 95 percent in the wake of the lockdown declared to curtail further spread of COVID-19.
The Managing Director of FAAN, Rabiu Yadudu, said this at a press conference in Abuja while responding to a question on why FAAN decided to effect a 100 percent increase in Passenger Service Charge at this time.
The increase of PSC from N1,000 to N2,000 per passenger for domestic flights, Yadudu said, would take effect from September 1 and have been communicated to all airlines.
“The increase is a matter of necessity. Our revenue is down by over 95 percent. In that case, we will do whatever we can legitimately to ensure we carry out our duties.
“We need to survive. There is no better time than now for FAAN to do this,” he said.
Describing airport management as capital intensive, Yadudu noted that FAAN had not increased PSC since 2011 despite the huge capital investments at the nation’s airports.
He said the current N1,000 charge was no longer realistic and that it did not correlate with realities of cost-related inflation rate which the Central Bank of Nigeria put at 12.82 percent.
The managing director said FAAN, until late 2019, was collecting naira equivalent of PSC at an official rate of between N305.50 and N344.38 to a dollar while airlines were collecting at subsisting market rate of about N362 to a dollar.
He added that the Federal Government was increasing its direct deduction from FAAN to 40 percent from 2021.
He said with such deduction, FAAN would have a shortfall of over N16bn on overhead cost; hence, the authority decided to engage the government in order to be exempted from the deduction.
Yadudu said, “It has, therefore, become imperative to review the Passenger Service Charge from N1,000 to N2,000 per passenger.
“This review which takes effect from September 1, 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.”
The managing director said as the nation prepares for the resumption of scheduled international flights, new advisories for airlines and air travelers would be rolled out.
He said the advisories would be made public as soon as they were ready.
While answering a question on the latest on the alleged violation of COVID-19 protocols by VIPs at the nation’s airports, Yadudu said the task was being handled by the Nigerian Civil Aviation Authority and the nation would hear from the authority as soon as it was ready.
He also said the NCAA was working with the Ministry of Aviation and airlines on the planned resumption of scheduled international flights.