The revenue-generating moves of the Federal Airports Authority of Nigeria (FAAN) have led to protest and petitions from aviation union members, ground handling firms, airlines and concessionaires, reports KELVIN OSA OKUNBOR
The Federal Airports Authority of Nigeria (FAAN) saw in the levies and taxes ways to diversify its sources of revenues. But for ground handling firms, such as the Nigerian Aviation Handling Company (NAHCO) Plc and Skyways Aviation Handling Company Limited (SAHCOL), the moves are bad. They have the support of the National Union of Air Transport Employees (NUATE), which has written a petition to the Minister of State, Aviation, Senator Hadi Sirika. All they want is for Sirika to prevail on FAAN to drop the proposed charges.
NUATE’s acting General Secretary Comrade Olayinka Abioye said FAAN wanted to impose the exorbitant, irregular and multiple taxes without recourse to established rules.
Abioye listed the charges as :ground rent per square metre of office space per annum; concession fee, which is five per cent annual gross income; new fees for on duty cards, airside drivers licence / permit , access fee for fuel tankers as well as cost of direction signage / company signboard. FAAN also expects companies operating around the airport to pay N10, 000 per employee per annum.
Employees of companies doing business around the stakeholders car park on the MMIA are to pay N15, 000 per staff per annum for the use of the car park. At the car park opposite SAHCOL headquarters, staff of ground handling companies, cargo agents and others are to pay a an average of N300 per entry.
The union listed other fees, taxes, tarrifs and levies imposed on SAHCOL and NAHCO to include: N150,000 per vehicle Apron Pass .
FAAN also expects companies in the Lagos airport to pay N149, 021, 723.75. Their counterparts operating in the Abuja Airport are expected to pay N 13,494,060. Firms in Kano Airport are expected to pay N20, 247, 000 and firms operating at the Port Harcourt Airport are to cough out N 22, 042, 396.80.
For installing screening machines at the SAHCOL Cargo Complex, FAAN expects the payment of N 42, 000 , 000 at four stations. The construction of equipment parking bay for the Lagos Airport attracts a fee of at N 5.5 million and N3 million for the Ilorin Airport.
FAAN expects N200, 000, 000 per annum as land charge for the SAHCOL cargo complex. It also expects SAHCOL to pay N 420,000, 000 for the construction of the link road.
NUATE’s petition reads:’’ There is a seeming industrial crisis looming within our airports between the management of the Federal Airports Authority of Nigeria (FAAN) and the two handling companies comprising of the Nigerian Aviation Handling Company (NAHCO) and the Skyway Aviation Handling Company (SAHCOL) over the latter’s arbitrary, irregular, exorbitant and multiple fees imposed on these companies and its workers without recourse to established rules. It may interest the Minister to note that as partners with all these organizations, it is our duty to intervene in this manner by drawing your attention to this grievous matter, more so with its attendant consequences.
“Whereas we affirm and have severally advised the Management of the Federal Airports Authority to engage in, and embark on increased internally generated revenue from non-aeronautical and ancillary sources, whereas the Management of FAAN has deployed its attention in this direction, in conformity with its objectives.
“Whereas these handling companies, being operators of passengers and cargo handling services require conducive and environmentally friendly airports to fulfill their obligations to its numerous customers, which has continued to add value to FAAN as an Airport Operator.
“In ensuring that industrial harmony reigns within the system, and bearing in mind that FAAN has not fully respected the rights of its “ business partners” to a round table discussions on its incessant “hike in tariff “ in consonance with international best practices.
“FAAN has violated Section ii of ICAO’s Policies on airport charges, where it was specifically stated that ‘consultation with airport users before changes in charging systems or levels of changes are introduced is important’.
“For FAAN therefore to be seen and appreciated by its business partners such as NAHCO and SAHCOL, it must ensure that consultations takes place before any change in tariffs are imposed and should not be an annual event, done in the most shady manner, lacking in transparency, bearing in mind the consequences of the impact on the users.
“May we kindly use this medium to highlight the current and various fees, tariffs and levies imposed on the Management of the two companies while painfully, their workers were not left out, as these innocent workers had to pay severally for accessing their respective offices, from their meager salaries.
‘’Minister Sir, from the foregoing, one can therefore imagine the unacceptable financial burden placed on these companies, who are expected to earn profits for its owners, plough some resources back into their operations for rejuvenation, pay salaries and associated overheads.
“Should the company find it unbearable to continue, the next thing they do is to downsize and as we write this petition, more than four hundred workers had been declared redundant in the last six months, citing heavy costs of operations.
“As partners in progress with all these bodies, we wish to ensure a level playing field for all, where there would be understanding and good reasons for any increase in charges and concurrence by parties without threat to the jobs of our members and or insolvency of any of the companies, including the Airport Operator (FAAN).
“We urge your good office, to speedily intervene Sir, to avoid imminent crisis as the workers of these bodies and other concerned concessionaires are groaning under heavy yoke of multiple payments, by inviting them to a meeting where parties could vent their opinions, ideas and suggest possible ways of ameliorating the unfortunate situation, as we also try to avoid any of them getting involved in unethical practices inimical to our safety and security considering the nature of their operations.
“A stitch in time, they say, saves nine. We have confidence that your good office will do the needful as soon as possible to starve off threats to the polity.”
FAAN’s General Manager, Public Affairs Mr Yakubu Dati said FAAN is aware of the complaints by aviation workers’ union , airlines, ground handling companies and other concessionaires.
Dati said: “There is a ministerial committee set up to address charges by aviation agencies. It is expected that those with such complaints approach and exploit this window. As a responsible organisation, FAAN will await the findings of the highly respected committee.”
The Managing Director of NAHCO, Mr Norbert Bielderman, urged FAAN to engage other stakeholders before it proposed any tariff increase.
He said: ‘’We plead with FAAN to review its new tax and tariff regime in the interest of its business partners, clients, tenants, concessionaires etc. FAAN must balance drive for revenue and its resultant negative impact to businesses, passenger or customer who ultimately would pay for this cost of doing business.
“We can all agree that the sector would be facing huge business challenges and there is the urgent need to all sit together to channel a formidable course of direction that is sustainable to all going forward.
He listed challenges of doing business in Nigeria to include: Naira depreciation, high exchange rate, high interest rates, high airport taxes, charges, ground rents and concession fees
“Aviation business like any other business is set up to make profit and to create shareholder value and these negative supervening factors may lead to cost saving methods that may compromise service standards and safety. This is asides the sector’s relevance in relation to GDP.
“In truth, these are trying times for the sector. We expect that there would have to be sacrifices from all ends to safeguard our industry through mutual respect, understanding, maturity, tact, long term view and professionalism. For NAHCO, we expect appropriate adjustments in sync with current realities.’’
Former Managing Director of SAHCOl, Mr Olu Owolabi, said FAAN should consider the current economic challenges before rolling out exorbitant charges on operators struggling to keep their business afloat.
He said: ‘’The Federal Airports Authority of Nigeria (FAAN) relies on us to provide these services to the airlines; yet, the charges they ask us to pay are outrageous. So, we are in a fix. FAAN is on our neck with heavy bills.
‘’How is government encouraging us? Is it by giving us high tariffs that will not allow us to function? And the sad part of it is that the moment you raise a little penny to the cost of service to these airlines they start kicking.
‘’We really need the help of the federal government and then we need succour from FAAN by not giving us charges that are not even acceptable in the world.
‘’The former Minister of Aviation set up some committees to look into the tariff but the report of the committees never saw the light of the day. So this sort of thing needs to be addressed.
‘’And we have been emphasizing this issue several times. The painful aspect of it is that even this equipment that we have been talking about doesn’t even leave the tarmac, that we pay heavy money on it, can you believe that FAAN still wants us to pay tax on it per year and at the same time they are getting five per cent on the total revenue we made in a year. That is not even double taxation it is triple taxation.
‘’I have pointed it out several times and we are still on it, it has not been rectified. There is no way the equipment I am using to make the money, you want to tax me on it and at the same time you want to collect the total revenue whether gain or loss you still collect your five per cent. Am I just working for FAAN? What of the other shareholders? Those investors are running away because there is no way you could make money in such environment.”
For the Airport Operators of Nigeria (AON), some airport charges must be scrapped to reduce operating costs. Its chairman, Captain Nogie Meggison, said: “The multiple taxes, levies and airport charges have ripple effects on airline business .They have their collateral effect on the operations of airlines. The airport charges, taxes, navigation fees, and other levies introduced by government are affecting the business.
“We are paying Customs duties and paying VAT but foreign airlines that operate into Nigeria don’t pay these taxes. There are also multiple taxation and other levies. We are not asking for rebate or intervention fund but to review the levies and the charges. They charge the airlines landing and parking, navigational charges and terminal charges. There are charges levied for which services are not provided.”
For now, it appears all have to wait for the committee saddled with the responsibility of resolving the impasse in the sector.
