Understanding the consessioning of Asaba Airport…



It is normal for citizens to be concerned when any critical asset of the commonwealth is being privatised or concessioned. It is therefore important to educate the citizens, many of whom do not understand the peculiarities in the structure and operations of many assets, on what the issues are and the expected outcomes of some policies.

Airlines and airports operations require steady huge capital investments for stability and competitiveness, still they remain tricky businesses.

Let us ask ourselves, for instance, why it is that most Nigerian airlines have gone under, others operating at a steady loss and some taken over and under administration by the Debt Management Office.

One of the reasons is that domestic passenger traffic is low, probably because citizens are unable to afford the cost of flying regularly and, perhaps, also because Nigeria has not proven to be a top tourist destination for international travellers.

FRED EDOREH, a veteran journalist

We must understand the two main sources of airport revenue as being incomes from earonautical services and non-earonauntical activities.

The earonauntocal revenue which accounts for between 50 and 60% of airport incomes comes from passenger departure taxes, terminal services, landing and parking charges on airlines.

The non-earonauntical revenue which accounts for between 30 and 50% of airport income are from retail services within the airport, parking slots, rentals and other commercial activities.

Low in and out passenger flow means that very little is realised from departure charges. It also means low number of flights and low income from terminal, landing and parking charges on airlines.

The resulting low incomes affect the ability of airports to invest in upgrades and maintain standard services to attract bigger airlines.

This has remained a major problem for Nigerian and very many African airports.

Indeed, it is known that 70% of Nigerian airports across various state capitals and cities operate at a loss. The state governments struggle to keep them alive to provide for the take off and return of citizens and business partners in and out of their states, albeit at great cost in subsidisation.

This difficulty is not peculiar to Nigeria. In 2013, 70% of airports across the world ran at a loss.

At about 2015, major airports across the world began to see the need to invest more to improve on income from non-earonauntical services. This is done mostly through airport privatisation and consessioning to attract capital investments from local and international investors.

For instance, John F Kennedy Airport in the US, the most profitably run airport in the world, has series of concessioned activities and most airport concessions across the world are granted for between 30 to 50 years to enable return on investment for the risk takers.

As we speak, Brazil, one of the fastesr developing nations, is on its seventh tranche of privatisation and concessining. It involves the giving out of about 43 airports to private investors to invest on and msnsge while the government rakes in funds from the fees to apply on the development of other social infrastructure and services.

The situation is the same in various European, Asian, North and South American countries.

It is only in Africa that there has remained a prevarication on the part of governments to privatise or consessiin airports mostly because of political fears and our emotional attachment to property.

But, for most governments that understand airport privatisation and concessining, they look not at the immediate revenues but at the direct funds from private investors to re-engineer and reposition their airports into international or regional aviation hubs through improvement on earonautical and non-earonauntical services. This also with the objective of attracting bigger airlines and more passenger and tourism traffic into the local area to impact on various other businesses. This is the now global trend.

Sadly, Africa has not been a major consideration for international investors because of the various social and infrastructure deficits, usual inconsistency in maintaining government policies and the consequent huge risk in the uncertainty of return on investment.

We all know the Asaba Airport. We know the low passenger traffic and the low number of flights in and out of it, usually one or two a day to Abuja and Lagos.

We know that big aircrafts don’t ply the route for a number of reasons. We know that there is little or no significant presence of non-earonauntical services and commercial activities in that airport.

We should therefore understand the need for huge investment to improve on its efficiency and safety standards, raise its standing in aviation ranking, attract more airlines and improve on non-earonauntical and commercial services to reposition it into a preferred hub for local and international passenger flow.

Indeed, it is a mystery that Governor Okowa was able to attract and convince foreign investors to commit to an investment of about N28 billion towards improving on the Asaba Airport. Not many airports in Nigeria and Africa have been that lucky in the face of the circumstances under which they exist.

The consessioning of the Asaba Airport therefore is not to be judged in haste. It is a forward planning move intended to give future hope of a better aviation condition for airlines and passenger experience for Deltans and all origins and classes of travellers.

Thankfully too, the Delta State Government has renewed focus on the Osubi Airport too, so as to enhance air travel in the Warri axis of the state.

These moves should be better understood and encouraged as they show a government with a good sense of insight and responsibility for progress. Still, we can’t blame those criticising in ignorance. Let’s educate and enlighten.


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