The Federal Airports Authority of Nigeria (FAAN) on Thursday says its revenue has dropped by over 95 percent in the wake of the lockdown declared to curtail further spread of COVID-19.
FAAN Managing Director, Rabiu Yadudu, said this at a press conference in Abuja while responding to a question on why FAAN decided to effect a 100 percent increase in passenger service charge at this time.
The increase of the charge from N1,000 to N2,000 per passenger for domestic flights, Yadudu said, would take effect from September 1 and had been communicated to all airlines.
“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,” he said.
Describing airport management as capital intensive, Yadudu noted that FAAN has not increased PSC since 2011 despite all the huge capital investments at the nation’s airports.
He said 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 percent.
He also said that the Federal Government plans to increase its direct deduction from FAAN to 40 percent from 2021. He said with such deduction, FAAN will have a shortfall of over N16 billion on overhead cost, hence, the authority decided to engage the government in order to be exempted from the deduction.
