FAAN Plans Tariff Review, Eyes Non-Aero Revenue Growth

BY ANTHONY OMOH

The Federal Airports Authority of Nigeria (FAAN) plans to commence an urgent tariff review and retail overhaul to align airport operations with global standards and rising domestic economic pressures. The move comes as the agency struggles with obsolete tariffs amid over 20% inflation and a lopsided revenue structure in which 92% of earnings come from aeronautical sources while only 8% are generated from non-aeronautical streams. Although FAAN earned over NGN2 billion in 2024 from below-the-line advertising, officials say this figure, while promising, falls short of the sector’s commercial potential.

Speaking at the 2025 Commercial and Business Development Stakeholders’ Engagement Forum themed Strengthening Partnerships for Sustainable Growth and Development, Director of Commercial and Business Development, Ms. Adebola Agunbiade, described the tariff reform as overdue. “This is a sore topic for everyone,” she said. “We’ve been running on outdated pricing. The cost of doing business has changed, and we must respond to that reality.”

She assured stakeholders that the new rates would be competitive, phased, and preceded by proper notice to enable tenants to plan. “We’re not trying to shock the system. We’ll communicate changes early enough. What we want is a fair structure that works for both FAAN and the businesses,” she noted.

Agunbiade emphasized that boosting non-aeronautical revenue is a critical pillar of FAAN’s future strategy. “Globally, the benchmark is around 45% non-aeronautical income. But we’re at just 8%. That’s far from ideal,” she said. “Even the NGN2 billion we generated last year from below-the-line advertising is just scratching the surface. It shows what’s possible, but we must aim higher.”

She also provided statistics of businesses per size at all the nation’s airports with Oyo having 720, the MMA, Lagos having 551 businesses while Makurdi has just one as lowest. According to these stats, AbuJa has 311, Owerri has 375, Port Harcourt has 200; while Kano ad Enugu has 252 and 66 respectively.  These number however belie the businesses to the airports as the value of most are not premium.

To better organize and project value across tenant operations, FAAN has now classified all businesses into Bands A through D. “Every single business within FAAN airports falls into one of these bands, and this will be reflected in your approval or renewal letters,” Agunbiade explained. “It helps us track value and respond accordingly.”

As part of this broader overhaul, FAAN conducted a comprehensive retail mix audit across its five busiest airports—Lagos, Abuja, Port Harcourt, Kano, and Enugu. Findings revealed a dominance of low-yield, small-scale operations. “Our analysis shows that 32% of businesses in these airports are Band D, while only 26% are Band A, which are the big-ticket operators like fast food chains, lounges, and premium retail. That’s a gap,” she explained. “We need to create more room and incentives for Band A businesses, because that’s where the revenue lies.”

Band D businesses include provision shops, bookstalls, mini-marts, and car wash services—important but not high-earning. “There’s a place for them, but we must rebalance to attract more strategic, revenue-generating partners,” she noted.

To boost efficiency and transparency, FAAN is deploying a visibility dashboard to monitor space allocations across all 32 airports. “This will end double allocations and guesswork. Anyone can check if a space is free in Abuja or occupied in Kano, all in real-time,” Agunbiade said.

A new digital platform will streamline the commercial application process and reduce long response times. “You’ll be able to apply online, get approvals faster, and reduce back-and-forth delays. It’s a smarter way to work,” she said.

Ground transport services are also receiving attention. FAAN is introducing a structured slot system for car hire operators, with assigned vehicles per operator to curb touting. “We’re also introducing a new category called the Smart Hub for CNG and electric vehicle operators. It’s part of our green energy commitment,” she added.

Traditional categories like VIP and limousine services are being restructured to bring uniformity and meet the premium expectations of airport users. “Our airports are premium environments. Every business around them should reflect that standard,” Agunbiade stated.

She also announced FAAN’s transition to a fully cashless system across all airports. “All revenue points—from access gates to tenant payments—will now be processed via cards, digital links, or USSD. Lagos and Abuja will pilot this rollout,” she revealed.

Tenants were urged to comply with the use of FAAN’s Electronic Cash Register (ECRN), which will now be enforced more strictly. “These systems cost money and are essential for transparency. We’ll be increasing monitoring and compliance,” she warned.

Another innovation under development is a digital platform for charter flights. All operators will soon be required to register and make payments online, eliminating the need for physical invoices or on-site billing visits.

Agunbiade concluded by calling on stakeholders to partner with FAAN in this commercial shift. “We are building structured, data-driven systems to drive airport revenue forward. The tariff review and retail reforms are just the start of what is possible when we collaborate,” she said.

The stakeholders’ forum brought together commercial operators, advertisers, ground service providers, and other partners operating across FAAN’s 32 airports. The agency’s vision is clear: transform Nigerian airports into commercially vibrant and globally competitive hubs.