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Diverse opinions trail planned FAAN PSC increment

SOME unions and other stakeholders have aired varying opinions on the proposed increment of the Passengers Service Charge (PSC) collected by Federal Airports Authority of Nigeria (FAAN).

Three aviation unions in the country have thrown their weight behind the proposed increment which was revealed in a daily last week quoting a reliable source and stating that with the new terminals coming on-line the PSC needed to be increased to start repaying the loan.

However, diverging opinions are calling for caution before increment so as not to end up increasing the charges twice in a short time especially with the planned concession of airport terminals in the works.

The current PSC charges was last increased in 2011 about eight years ago and the new PSC regime is expected to take effect from January 2019 according to reports filtering in.

National president of the National Union of Air Transport Employees (NUATE) Comrade Ben Nnabue in his take said getting safety and efficiency are expensive to maintain and to do that FAAN must adjust its charges to survive.

“Safety and efficiency are expensive, for FAAN to maintain airport facilities to world-class standard, there is need to increase their charges. Most of the fittings in that airports are imported FAAN have increased in their cost”

Nnabue noted that since last increment eight years ago, the value of foreign currencies have increased while the cost of electricity generation and diesel have risen

“Last 8 years you know the value of dollar to naira . You know the cost of generating electricity, you know the cost of diesel” He said .

However, Group Captain John Ojikutu in his summations however said there should be no hurry in the PSC increment if the airports are eventually to be given out for concession.

He argued that it would amount to double jeopardy after increasing only for concessioniares to come in and increase further.

He said, ” If the international airports are planned for concessions, there should be no hurry about increase in the PSC. Any increase to sustain airports infrastructure periodic maintenance without government intervention will not be less than $10 or #3,500 per domestic passenger if the airports are eventually given out for concessions.”
“Let the concessionaires determine the PSC and not FAAN.”

According to him, passenger traffic needs to increase in all airports so that revenue generated at high yielding airports are not used to subsidise low yielding airports.

“Our airlines are carrying less than 15K passengers daily in a population of over 180m; that is poor. They need to be carrying about 50 to 80K passengers daily between the 26 Federal, states and private airports to reduce the PSC at some airports. For as long as passengers are very low at some airports, there would always be need to use the revenues of the high traffic passengers airports to service the low passengers traffic airports.”

” I agree that the PSC needs to be increased if FAAN will remain in the management of the airports; but if there are plans to concession the airports soon, FAAN should not increase the PSC; if it does, that would not stop whoever takes the concessions to also increase and that would be double jeopardy.”

General secretary of National Union of Pensioners (NUP) FAAN Branch, Comrade Emeka Njoku backed the increment stating that the review was over due in view of the the various projects being executed by the agency.

Comrade Njoku stated that acquisition and maintenance of current infrastructure at airports across the country was becoming increasingly difficulty stressing that the only way to survive was for FAAN to adjust upwards its charges to reflect the current value and cost of operation.

Comrade Njoku called for the full commercialisation of FAAN to increase revenue points without any interference from any quarters in order to enable it render better service to the public.

He disclosed that lack of funds was slowing down activities of the organisation saying that there were a lot of wage bills, maintenance of Airports and pensions.

“Equipment are becoming obsolete and they need replacement, this can only be done with funds which is not readily available”
He remarked that airport concession was not the solution in FAAN but that the organisation should be allowed to get loan from the bank to develop airports across the country for better service.

The National secretary of Association of Nigerian Aviation Professionals (ANAP) Comrade Abdulrasaq Saidu, said the running cost has increased and there was nothing wrong in moving with the trend of events as it will enable FAAN meet up with their quest of providing qualitative service

Saidu said the increment was justified after eight years of the last review stressing that things have changed in the last eight years.

Saidu noted that inflation through these years has drastically affected the cost of doing business, “Airlines and other airport users have reviewed their charges severally within these period”.

He said, “We have four new terminals built to international standards, the PSC tariff fixed eight years ago, will not be suitable for these new terminals owing to new technology, maintenance and other related costs”.

He emphasised that passenger traffic has grown by more than 65 per cent between 2011 and 2019. The effect of this increased traffic on the airport facilities , needed to be taken into consideration. But expressed doubt that passengers traffic might drop if the PSC upward review was too high.

Saidu noted that airlines might also be forced to increase airfare if the PSC was raised too high.

He however appealed to passengers not to panic over the move as air travel remained the safest

“The urgent need to begin repayment of the US $500 m (five hundred million Dollars ) China EXIM loan and the US $100m(one hundred million Dollars) DMO facility counterpart funding used in building the new terminals”,

The PSC is collected by the airlines upon purchase of tickets and is paid to FAAN upon completion of the flight.

The charges are used to cover the cost of maintaining common areas in the passenger terminals, providing passenger information, maintaining security and ensuring that customers can use the airport in comfort and with confidence.

 

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