NAIA closure: Airlines, handling coys, others chalk up N6bn loss

…It’s sacrifice for Nigeria,says FG

From Uche Usim, Abuja

 

As Nnamdi Azikiwe International Airport finally reopend for business last Tuesday, airlines and ground handling companies are currently counting their losses,put at over N6billion.

This amount was lost to the relocation of  their operations from Abuja to Kaduna Airport.

Daily Sun authoritatively gathered that foreign airlines operating in Abuja who refused to relocate to Kaduna lost about N5.5 billion in ticket and cargo sales charges during the six-week closure. Domestic airlines and ground handling companies lost about N500 million within the same period.

Industry records show that about 263 international flights from the Abuja airport were cancelled by seven airlines during the closure. 

Ethiopian Airlines, the only international carrier that operated the Kaduna route during the closure latched on the benefits of a monopoly status. The carrier reportedly processed over 5,000 passengers from the Kaduna airport and raked in about N2 billion in revenue. 

The seven airlines that hitherto operated from the Abuja airport and  refused to fly to Kaduna airport included British Airways, Air France KLM, Lufthansa, South Africa Airways, Asky, Egypt Air and Turkish Air. Combined, they operated 263 flights in six weeks. 

Unfortunately, they did not increase the number of flights on their Lagos or other routes.

The average passenger traffic and ticket cost  $900 for economy and $3,000 for business class passengers.  Analysis showed the losses in ticket sales for foreign airlines could be as high as N5 billion while cargo charges could be as high as N500 million across all the seven foreign airlines that refused to fly to Kaduna. 

The charges to the airlines vary, depending on the capacity of aircraft, the distance of the route, the number of hours an aircraft is parked and the number of passengers booked among other indices.

Aircraft traffic analysis on the foreign airlines showed a total of 45 flights per week by the foreign airlines. Thus in six weeks, the Abuja airport should have operated 270 international flights. 

The average number of passengers on the airlines suggest that about 6,490 flights per week from Abuja airport on the seven airlines, excluding Ethiopian Air. Thus in six weeks, some 38,940 passengers were processed.  

Based on this estimated passenger traffic, the Federal Government lost some N593.835million ($1,947,000xN305) in passenger service charge. $50 is charged per passenger on each ticket sold on international flight by the government, which is collected by the Nigerian Civil Aviation Authority (NCAA).  

There are other charges which the airlines pay which include; Enroute Charge (navigational charges) which is about $500 or more on each foreign aircraft depending on the route and on every landing.  

However, the Federal Government was not insulated from the gale of losses during the closure. The Federal Airports Authority of Nigeria(FAAN), the Nigerian Airspace Management Agency (NAMA) and other revenue- generating agencies lost over N1.5 billion cumulatively from ticket sales charge, over flyer charges and others. This was besides the taxes and other revenue generating streams of the aviation sector. Also, Cargo Sales Charge is collected on all cargo the aircraft carried. Other charges include; landing charges and parking charges which is also charged depending on the aircraft type and number of hours on ground. At least between $2,000 to $3,000 is charged depending on the aircraft type. Fuel surcharge is also charged to the oil marketers and collected by FAAN. 

Commenting on his company’s loss, the Spokesman of Skyway Aviation Handling Company Limited (SAHCOL), Basil Agboarumi said the six-week closure cost him company N50 million on a conservative estimate.

“This comes from high cost of moving huge ground handling equipment from Abuja to Kaduna and back to Abuja. We hired trailers, cranes and drivers for these. We also moved 44 staff to Kaduna and checked them into hotels and paid all their emoluments. Some staff were redundant in Abuja and we still had to pay them because we could not have suspended them for six weeks. We know the runway was closed in the interest of safety and we had to cooperate. Nothing is too much to be done for our passengers’ safety and comfort. If there is anything the government can do to clear some of these expenses, it would be soothing”, he said.

Also speaking in the same vein, the Spokesman of Air Peace, Chris Iwarah said the airline also recorded some losses but said it was not insisting on getting compensated by the government.

“It was closed for safety reasons. We appreciate the government for keeping to six weeks. It’s more like a sacrifice but if the government wants to help us, fine but we are not insisting”, he said.

Meanwhile, the Minister of State, Aviation, has urged all those who incurred loss to see it as a national sacrifice done in the interest of safety.

“We know the inconveniences passengers, airlines, ground handlers and other players were subjected to. There was no way we could not have shut that runway. It was in the interest of safety and anyone who contributed did so in the spirit of national sacrifice. It is better to lose billions than lose one life as a result of a bad runway. If there is anything we can do to help, we shall do but we must all see this as a sacrifice to the country”, he said.

During the six-week closure, a lot of Nigerians shelved their trips and conferences that ought to have been held in Abuja were either postponed or moved to some other locations. For instance, organizers of the international trade and investment conference postponed it when they learnt of the closure.

Such programmes robbed hotels in Abuja and event management companies huge revenue as patronage dropped considerably.

Also affected were airport taxis, food vendors and traders.

An airport taxi driver, Adisa Wale, says the airport closure occurred at a very bad time.

“It was really tough for us. At times, we’ll come into the Abuja airport and not carry anyody despite that passengers transited through here. We’re in recession managing to survive. It was tough but we thank God it is back to life”, he said.

His colleague, Usman Tanko said: “I use my Toyota Camry 2007 model for airport shuttle. Now no airport. No passenger. I had to use it for township charter. It was not easy. I am in debt but I will pay back now the airport is opened”, he said.

On December 10, 2016, the Minister of State, Aviation, Hadi Sirika shocked Nigerians, especially the aviation community, with the scathing news that the Nnamdi Azikiwe International Airport (NAIA), Abuja would be temporarily shut for six weeks; precisely from March 8 to April 19, 2017, to effect repairs on its lone runway that was a threat  to safety.

He said Kaduna International Airport would serve as an alternate airport during the closure.

Sirika by that announcement attracted a lot of condemnation, especially from local and foreign airlines and ground handling companies. They had analyzed the development and knew it would horribly disrupt their operations and slash their revenue, a situation that was feared would be worsened by the recession. At some point, members of the Nigerian Senate joined in criticising the move and summoned the Minister to appear before the plenary. While there, Sirika said the dilapidated runway had damaged some foreign and local airlines’ landing gears and said was not prepared to gamble with lives of Nigerians. He also reminded the lawmakers that Port Harcourt Airport suffered the same fate and was shut down for over two years.

The development was subjected to wide debates and consultations with aviation stakeholders that included airlines, members of the diplomatic corps, security agencies, paramilitary agencies and other players in the sector. In all the meetings, Sirika stood his ground that NAIA must be temporarily shut for repairs because its runway was built in 1982 with a life span of 20 years and had not benefited from maintenance repairs since then.

So, in one of the Federal Executive Council Meetings (FEC), the Minister secured approval of N5.5 billion for NAIA runway repairs.

Last February, the handwriting on the wall was clear that there was no going back on the relocation of flights to Kaduna.

At this point, local airlines and ground handling companies reluctantly agreed to move, in the “spirit of safety and national service”, but the international vehemently rejected the choice of Kaduna as an alternate airport, citing security and operational deficiencies.

However, only Ethiopian Airlines agreed to move and deployed its B787 dreamliner to do the Kaduna-Addis Ababa service. At last, on March 8, the airport was shut and in six weeks, a completely rehabilitated runway and terminal building sprang up in NAIA. So, it was a soothing development for air travelers, local and foreign airlines; ground handling companies, airport taxi operators, Abuja hotels, event management companies, food vendors and other players when NAIA was reopened on Tuesday, April 18, by the Aviation Minister and parastatal Chiefs, a day ahead the scheduled re-commencement of operations.

However, as glasses are clinked for the feat achieved, airlines and ground handling companies are nursing secret pains in form of losses of gargantuan proportions.

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