Federal Airports Authority of Nigeria (FAAN) Presentation by Mr. R. Aisuebeogun MD/CEO.

Federal Airports Authority of Nigeria (FAAN)

www.faannigeria.org

Presentation by

Mr. R. Aisuebeogun

MD/CEO

INTRODUCTION

Federal Airports Authority of Nigeria (FAAN) was established in 1996 to develop, provide and maintain at airports all necessary services and facilities for the safe, orderly, expeditious and economic operation of air transport, amongst other functions.

At FAAN Safety and Security is the watchword and we operate from the premise that...

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INTRODUCTION -contd.

“A customer (the flying public) is the most important visitor on our premises (Airports), he is not dependent on us. We are dependent on him. He is not an interruption in our work. He is the purpose of it. He is not an outsider in our business. He is part of it. We are not doing him a favour by serving him. He is doing us a favour by giving us an opportunity to do so.”

Mahatma Gandhi3

OUR VISION

OUR VISION To be amongst the best airport groups

in the world OUR MISSION

To develop and profitably manage customer-centric airport facilities for safe, secure and efficient carriage of passengers and goods at world-class standards of quality.

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Statutory Functions

To develop, provide and maintain at airports all necessary services and facilities for the safe, orderly, expeditious and economic operation of air transport

To provide adequate facilities and personnel for effective security at all airports

To provide conducive environment under which passengers and goods would be carried by air and under which aircraft would be used for gainful purposes5

Statutory Functions -contd.

To provide accommodation and other facilities for effective handling of passengers and freight

To develop and provide facilities for surface transportation at Airports

Carrying out, at airports, such economic activities that are relevant to air transportation and other commercial activities, which are not relevant to air transportation, but which may be carried out without prejudice to its other functions 6

Current Status

There are 21 airports under the management of FAAN, categorised into International, Major Domestic and Domestic.

The airports in each of the categories operate for 24 hrs, 18 hrs and 10 hrs respectively.

The airports are now to be managed regionally viz:

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MURTALA MUHAMMED AIRPORT(The Flagship of FAAN) 8

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Current Status

Lagos Region

S/n Airport Category

1 MMIA, Lagos International

2 Ibadan Airport Domestic

3 Ilorin Airport Domestic

4 Akure Airport Domestic

5 Benin Airport Domestic

Current Status -contd.

10NNAMDI AZIKIWE INT’L AIRPORT, ABUJA


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Abuja Region


1 NAIA, Abuja International

2 Kaduna Airport (including Zaria Aerodrome)

Major Domestic

3 Minna Airport Domestic

4 Jos Airport (& Bauchi Airstrip) Domestic

5 Makurdi Domestic

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Kaduna Airport

Kano Region


1 MAKIA, Kano International

2 Maiduguri Airport Major Domestic

3 Yola Airport Major Domestic

4 SA A, Sokoto Major Domestic

5 Katsina Airport Domestic

Current Status

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KANO AIPORT

KANO AIRPORT TERMINAL BUILDING14


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Port Harcourt Region


1 PHIA, Port Harcourt International

2 Enugu Airport Major Domestic

3 MEIA, Calabar Major Domestic

4 SMICA, Owerri Domestic

5 *Osubi Airport Domestic

*Osubi Airport is managed by Shell

16 Port Harcourt International

17 PHIA – Domestic Terminal

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Aviation Statistics (2001-2007)

The following presents the aviation statistics as recorded by FAAN over the period 2001 till 2007.

The area of Airport Operation Information is to be bolstered by the introduction of our ultra modern robust Airport Operations Database (AODB) with an Electronic Data Capture/Interchange module.

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Aviation Statistics (2001-2007) -cont’d

YR PAX AIRCRAFT CARGO* MAIL*

2001 5.22m .13m 45.19m 11.35m

2002 6.05m .14m 52.55m 2.92m

2003 7.13m .17m 65.12m 5.86m

2004 8.14m .20m 71.81m 12.63m

2005 8.31m .19m 106.72m 19.84m

2006 8.08m .18m 105.86m 19.82m

2007 8.41m .18m 103.85m 34.12m

* Weight in Kg20

Our Contribution to Nigerian Economy2001-2007

YR AERO (N) NON-AERO.(N) TOTAL (N)

‘01 5.76bn (81%) 1.38bn (19%) 7.14bn

‘02 7.18bn (85%) 1.23bn (15%) 8.4bn

‘03 9.30bn (85%) 1.67bn (15%) 10.98bn

‘04 10.34bn (75%) 3.49bn (25%) 13.83bn

‘05 11.27bn (75%) 3.73bn (25%) 15.00bn

‘06 12.14bn (78%) 3.37bn (22%) 15.51bn

07 12.70bn (81%) 2.99bn (19%) 15.69bn

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Focus – Short Term

• Sustained and continuous debt recovery• Sustained and continuous fund management• Full Automation of the four International

Airports for improved and efficient revenue generation

• Improved relationship with all stake holders• Revamp the Airport and its environs thus

ensuring clean and comfortable travel experience

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Focus – Short Term -contd.

• Rehabilitation of PHIA,MMA Runway 18L and MAKIA Domestic Terminal.

• ICAO and FAA Category 1 certification for MMA

• Improved service delivery to the travelling public & our clients

• Training and retraining of staff on mandatory programs for airport certification

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Degreasing of Apron at MMA25

Focus – MediumTerm

• Infrastructural improvement.• Improvement in fire and Safety

management at all airports.• Create incentives for Private-Public

Partnerships• Increased Non-Aero Revenue

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Focus – LongTerm

• To make all the Airports under FAAN Management viable.

• Automation and integration of all airports with Headquarters.

• Seamless communication• Expansion of infrastructure provision• Acquisition of long-term financial facility

from Developmental Banks. E.g. ADB,etc27

Revenue Sources PerformanceJAN-DEC ‘07

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SOURCESGEN-

ERATED

COLL-ECTED.

BAL-ANCE

VAR

Aeronautical 12.71bn 11.02bn (1.68bn) (15.25)%Non-Aeronautical

2.98bn 2.518bn(0.47bn) (18.47)%

TOTAL15.69bn

13.54bn (2.15)bn (15.85)%

REVENUEBUDGET Vs ACTUAL FOR JAN. – DEC. ‘07

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REV. HEADS

BUD-GET

GEN-ERATED.

BAL-ANCE.

VAR.

Revenue 18 15.69 (2.31) (14.75%)

FGN Appropriated Fund

9.93 (9.94) (0.00%)

TOTAL 27.94 15.69 (12.24) (78.10%)

All Revenue in Billion Naira

EXPENDITUREBUDGET Vs ACTUAL FOR JAN. – DEC. ‘07

EXP. HEADSBUDGET

(bn)ACTUAL

(bn)BAL. (bn)

VAR (%)

Personnel 7.54 6.14 1.41 (4.82)

Overheads 6.74 6.41 0.33 (5.15)

Capital Projs. (IGR)&Debts

3.72

2.71 1.01

(37.18)

Appr.Capital Projects

9.94 *** (0.00)

TOTAL 27.94 15.26 2.75 (71.08)31 *** - Enbloc deduction by AGF

Performance Summary -contd.

• We budgeted a total revenue of N18bn from IGR and N9.936bn as anticipated FGN Appropriation, totalling N27.936bn.

• As at end of the year, Total IGR was N16.329bn, i.e (71.08%) of Budgetted Expenditure.

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Performance Summary -contd.

• The shortfall on revenue generation is due to:

Revocation of licenses of some Airlines due to non-compliance of NCAA Regulations.

Commencement of operations at BOT Terminal

Grounding of aircraft in the Airlines’ fleet due to none airworthiness.

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2008 Budget Focus

Upgrading, renewal and maintenance of the Runways, Perimeter Fences, Terminal buildings and other infrastructures and equipments so as to improve the Airports’ efficiency, capacity utilization and also attain the ICAO standards.

Improvement in safety, security, facilitation, fire fighting and prevention measures;

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2008 Budget Focus -contd.

Improvement in automation and information technology;

Improvement in Human Resource Management and effectiveness for efficiency.

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BUDGETED REVENUE 2008

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Head Amount

i IGR

Aero. 17.52bn

Non. Aero. 6.48bn

24.00bn

ii FGN Appro. (MTSS) 1.40bn

TOTAL 25.40 bn

BUDGETED EXPENDITURE 2008

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Head Amount

i Personnel 8.17bn

ii Overheads * 7.07bn

iiiIGR Capt. Proj., Capt. Debts.,Safe Tower Loan

8.76bn

iv FGN Appro. Capt Projects 1.40bn

TOTAL 25.40 bn

*The Overhead costs include contribution of 5% landing fees to NIMET and operating surplus to FGN.

Financial Statements

The set of accounts for year’s 2007 and 2006 are yet to be audited, but we have a fully audited report for 2004 and 2005 as presented here.

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INCOME PROFILE

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2007** 2006** 2005* 2004*

Aeronautical Sources

11.26bn

10.14bn

9.60bn

9.68bn

Non-Aeronautical

4.43bn 5.35bn 5.66bn 4.85bnSub-Total 15.69bn15.49bn 15.29bn 14.43bn

* - Audited**- Un-Audited

EXPENDITURE PROFILE

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2007** 2006** 2005* 2004*Staff Cost 7.25bn 9.36bn 6.79bn 6.34bn Power & Fuel 1.13bn 1.40bn 1.46bn 1.27bn Repairs & Maint. 1.64bn 2.71bn 2.25bn 2.11bn Other Op. Cost 6.18bn 5.87bn 4.31bn 3.81bnFinancial Charges 0.01bn 0.01bn - 0.02bnTotal 16.21bn19.35bn 14.81bn 13.55bn

* - Audited **- Un-Audited

PROJECT HIGHLIGHTS

There are over 180 projects on-going at various stages of completion across the Airports.

We have been striving to meet-up with our payments as much as we can while prioritising in the light of the Budgetary constraints

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PROJECTS HIGHLIGHTS

• Resurfacing of MMIA Domestic Runway • CARGO Apron expansion at MMIA• Water Supply Improvement at MMIA• New Domestic Terminal at MAKIA• PHIA Terminal Rehabilitation, Apron

Expansion, Runway Resurfacing and Power Improvement

• Procurement of 20 Fire Tenders• Cat II AFL Installation at SMICA45

ProjectCost (bn)

Amt Cert.(bn)

Status

Runway Resurfacing

3.56 1.78 70%

Cargo Apron Expansion

0.85 0.43 20%

Water Supply 0.30Awaiting

FECapproval

Power Project 0.17 0.07

MMIA PROJECT HIGHLIGHTS

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MMA Runway 18/L undergoing resurfacing47

ProjectCost (bn)

Amt Cert. (bn)

StatusComplet-ion Date

Runway Overlay

3.00 2.28 bn 90%

AFL Cat III. 0.92 0.46 bn 0%

Apron Expansion

0.54 Awaiting

FECapproval

Power Improv.

0.74 0.362bn “

PHIA PROJECT HIGHLIGHTS

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Project CostAmt Cert.

StatusCompletion

Date

Domestic Terminal Building Completion

762.7m 547.7m 75%

MAKIA PROJECT HIGHLIGHTS

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Project Cost Amt Cert. Status

Runway resurfacing, Expansion and Extension

6bn Tendering

Airfield Lighting CAT II

960m Tendering

ENUGU AIRPORT PROJECT HIGHLIGHTS

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Project CostAmt Cert.

Status

Runway resurfacing

3bn Tendering

Airfield Lighting CAT II

960m Tendering

KADUNA AIRPORT PROJECT HIGHLIGHTS

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CHALLENGES

• Decayed and decaying Airport Infrastructure • Crippling Indebtedness to Contractors.• Rising Debt profile of Government Agencies

and Airlines to FAAN• Appropriate & Right Staffing• High Wage-Revenue Ratio• Dwindling Revenues• High rate of Litigation and its attendant cost.• Uncompleted Projects

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Challenges -cont’d

Funding of mandatory programs for Fire, AVSEC and Operations staff for airport certification.

Funding Pensions Liability gap of about N30bn.

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Opportunities

Opportunities

Investment opportunities abound in Nigeria airports for both local and foreign investors.

The scope for growth is vast, especially in the non-aero sector as seen in the ratio of Aero to Non-aero revenue which is 85:15

Most airports worldwide generate up to 50% of their revenue from Non-Aero Sources. Investment in Airports infrastructural facilities top list of such opportunities as listed below: -

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Opportunities -cont’d

Construction and management of terminal building; already, Bi-Courtney and Associates has started the operation of the first Build Operate and Transfer (BOT) MMA Domestic Terminal 1.

Construction of Runways, taxiways and aprons;

Construction and management of helipads. Construction and management of

Independent Power Plants (IPP)

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Opportunities -Cont’d

PROPOSED PROJECTS

PROPOSED LOCATION

Hotel/Holiday Inns /Resort Centres

Lagos, Abuja, Bauchi, Jos, Port Harcourt, Owerri, Calabar, Ilorin

Cargo complex/Warehousing

Calabar, Lagos, Kano, Abuja, Port Harcourt, Akure, Yola, Jos, Owerri, Ilorin

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PROPOSED PROJECTS

PROPOSED LOCATION

Duty Free Shops Lagos, Kano, Port Harcourt, Abuja, Calabar

Aviation Fuel Depots Abuja, Kano, Port Harcourt

Water Bottling Plants Jos, Kaduna, Abuja, Akure

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PROPOSED PROJECTS

PROPOSED LOCATION

Interline Offices Lagos, Kano, Port Harcourt, Abuja, Calabar

Cold Storage facilities Jos, Yola, Owerri, Lagos, Abuja, Kaduna, Ilorin

Shopping malls Kano, Ibadan, Lagos, Yola, Abuja, Port Harcourt

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PROPOSED PROJECTS

PROPOSED LOCATION

Avio-bridges Lagos,PortHarcourt,Abuja

Independent Power Projects

Lagos, Abuja, Port Harcourt, Kano

Hangars(Aircraft maintenance facility) / FBO’s

Lagos, Abuja, Ilorin, Ibadan, Maiduguri, Port Harcourt, Kaduna

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PROPOSED PROJECTS

PROPOSED LOCATION

In-flight catering complexes

Kano, Abuja, Lagos, Port Harcourt

Airport Advertising All Airports

Cargo Management Lagos, Abuja, ,Kano, Ilorin,Calabar, Port Harcourt

Car Park: Development and Management

All Airports61

PROPOSED PROJECTS

PROPOSED LOCATION

Petrol Stations Port Harcourt, Abuja, Ibadan, Ilorin, Akure

Fish/Agric Farms All Airports

Housing Estate/Amusement Park/Conference Centre

All Airports

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PROPOSED PROJECTS

PROPOSED LOCATION

Multipurpose Hall Enugu, Minna, Abuja,PortHarcourt,Lagos

Public Gallery Murtala Mohammed Airport, Lagos

Internet Café / Cyber Café

Lagos, Port Harcourt, Abuja, Kano, Owerri, Enugu, Calabar

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PROPOSED PROJECTS

PROPOSED LOCATION

Tourist attractions All Airports

Surface/ground transportation (taxis,shuttle buses, trucks, train, etc.)

All Airports

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10 Reasons why you should do business with FAAN

The ratio of Aeronautical revenue to Non Aeronautical revenue in the sector is still about 85:15, whilst world over Non-Aero revenue is averages 50%, hence there is great scope for growth.

There is a direct linkage between economic prosperity, population growth and airport/airline/tourism activities.

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10 Reasons why you should do business with FAAN -cont’d

A number of indices can make FAAN and, by extension, tourism attractive and flourishing. Investors will find the new improved airports and Nigeria generally a haven for the following reasons:-

Stable democratic government High population (Over 140 million people) Diversified economy (farming, mining,

manufacturing etc.)

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Diverse and rich cultural heritage Potentially popular tourist destinations, a

country of scenic beauty with airport connections e.g. in Cross River, Bauchi, Kwara, Osun, Plateau,Taraba and Adamawa states.

Good export potential in Agricultural produce and Solid Minerals (cargo)

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The Government’s current support for growth in aviation and tourism industries is a tonic;

Huge investment potential in all facts of the economy;

Friendly populace. World-class hotels/restaurants are available

everywhere in Nigeria.

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Charges / Tariff Comparison

Aircraft Parking Charges

Country Airport Charge ($US)

Ghana Accra 0.15 per ton/hr 1st hr Free,

Egypt Cairo 17per/hr

CoteD’voire Abidjan 0.06per ton/hr

UAE Dubai 0.75 per/day

Nigeria Lagos 0.14 per ton/hr

Cameroon Douala 0.2728per ton/hr

S.Africa J’borg 139.76 per day70

Passenger Service Charge

Country Airport Int’l ($US) Dom (Naira)

Egypt Cairo 12.86 N/A

Ghana Accra 50.00 12.57 ($0.0977)

Cote D’voire Abidjan 23.38 754 ($5.86)

Nigeria Lagos 35.00 350 ($2.72)

S. Africa J’Burg 18.44 814.5 ($6.33)

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Thank you.

Federal Airports Authority of Nigeria (FAAN) Presentation by Mr. R. Aisuebeogun MD/CEO.

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