As part of a broader initiative to enhance revenue generation, the Federal Airports Authority of Nigeria (FAAN) says it is set to hike tariffs for service providers operating at the airports across the country.
In line with this move, it has unveiled plans to transition to a cashless payment system, thereby eliminating cash transactions in favour of automated and contactless payment methods.
According to FAAN, its revenue streams are heavily skewed towards aeronautical sources, which account for 92% of its income, whereas non-aeronautical activities contribute a modest 8%.
This disparity is notable when compared to international benchmarks, where non-aeronautical revenue often constitutes more than 40% of total revenue in many advanced economies.
This shift, the agency said, marks a critical step in modernising its operations and rebalancing its revenue structure.
At the Directorate of Commercial and Development Stakeholders Engagement Forum held in Lagos on Monday, Adebola Agunbiade, FAAN’s Director of Commercial and Business Development, outlined the authority’s plans and challenges.
She said: “We have to find the means to review our tariff in such a way that it is not too much on you but it is also helping us to pay our bills.”
Agunbiade promised that FAAN would notify service providers early enough before implementing the tariff increase.
She said: “We have done it already, we will be putting out notices on it, but please rest assured that we will not be getting a review on a tariff that probably has been done too recently.
“But we are reviewing our tariff, and we will also ensure that we notify you early enough so that you, as businesses, can plan towards it.
“We have had a lot of issues around this, and I think it is mostly because most times when we give out these agreements, people do not read them to see what the terms are.”
She said FAAN has worked on the agreements with its legal team and has done a thorough review of the agreements.
“We have come up with different terms. So if anyone is coming for a renewal or for an application, you will see that some of the terms in the agreements have changed.
“And this will also, we try our best to ensure that you will find it doable in terms of. And they work,” Agunbiade said.
The FAAN official also mentioned that FAAN would transition to an automated and contactless payment system, stating, “All payments will soon be made online using our cards. It is an airport card. You tap and go. It is a very seamless and straightforward process that will ease the business and payment structure for all our payment systems.
“We have above-the-line and below-the-line revenue-generating platforms. Last year, we realised N2 billion from below-the-line platforms alone.
“It is a big opportunity for investors, and people can leverage on this,” Agunbiade disclosed.
She also said that FAAN is investing in reward systems for its staff.
In her speech, FAAN’s Managing Director and CEO, Olubunmi Kuku, voiced concerns regarding the sheer number of calls and enquiries from service providers concerning payment renewals and applications.
She highlighted the importance of automation, stating, “Automation makes it easier for you to track your payment. We are going cashless and contactless payment.
“So it is easier and faster. People can use these cards for payment points across our terminals. We have started the pilots in Lagos, we are going to be rolling this out across other airports, and of course across all of our different lines.
“There are a lot of investments that have gone into our infrastructure upgrades and automation, specifically. We will be using ECR devices for all of the payments at the terminals.
“We are also upgrading some of our parking and automating the tollgate facilities as well. All in a bid to make sure that there is visibility, there is transparency.
“And of course, accountability for the funds that we earn for our passengers to understand that it’s going right back into the businesses.”
Kuku also cautioned that licences of car hire service providers and Bureau de Change operators which exploit their airport duties to engage in touting activities would be revoked.
She disclosed efforts to ease congestion on Lagos airport access roads by removing tankers parked on the roads.
She said: “This is not the scene I want to see. We have received orders to take out those tankers. We will be taking drastic measures.
“We cannot just have businesses on the side of the road in a manner that is not organised. We will be taking very drastic actions.
“A lot of the tankers there do not operate in our environment. They will have to go. They are a security risk, and the scene is obnoxious for an airport environment.”
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