The Federal Airports Authority of Nigeria (FAAN) has cried out over its 95 per cent revenue drop the wake of the lockdown declared to curtail further spread of COVID-19.
This was disclosed by the Managing Director of FAAN, Rabiu Yadudu, in Abuja while responding to a question on why FAAN decided to effect a 100 per cent increase in Passenger Service Charge at this time.
Yadudu explained that the increase of PSC from N1,000 to N2,000 per passenger for domestic flights would take effect from September 1 and had been communicated to all airlines.
According to him, “The increase is a matter of necessity. Our revenue is down by over 95 percent. In that case, we will do whatever we can legitimately to ensure we carry out our duties. We need to survive. There is no better time than now for FAAN to do this.”
Yadudu explained further that FAAN had not increased PSC since 2011 despite the huge capital investments at the nation’s airports.
According to him, the current N1,000 charge was no longer realistic and that it did not correlate with realities of cost related inflation rate which the Central Bank of Nigeria put at 12.82 per cent.
The managing director said FAAN, until late 2019, was collecting naira equivalent of PSC at an official rate of between N305.50 and N344.38 to a dollar while airlines were collecting at subsisting market rate of about N362 to a dollar.
He added that the Federal Government was increasing its direct deduction from FAAN to 40 per cent from 2021.
He said with such deduction, FAAN would have a shortfall of over N16bn on overhead cost; hence, the authority decided to engage the government in order to be exempted from the deduction.
Yadudu said: “It has, therefore, become imperative to review the Passenger Service Charge from N1,000 to N2,000 per passenger.
“This review which takes effect from September 1, 2020 has already been communicated to the airlines. We therefore implore stakeholders, airport users and the general public to bear with us as FAAN is laden with so much overhead cost of operation.”