Nigeria: Ojikutu Urges FAAN 5% Airport Revenue Contribution for Safety

• John Ojikutu proposed that the Federal Airports Authority of Nigeria (FAAN) contribute 5% of its commercial airport earnings to a pool funding aviation safety agencies.
• He also called for a comprehensive review of the existing 5% Ticket Sales Charge and other aviation charges' distribution among five safety agencies.
• Ojikutu argued FAAN, as a commercial operator generating substantial revenue from various services, should directly fund the safety system that supports its operations.
• The proposal recommends increasing the Nigerian Airspace Management Agency's (NAMA) share of the existing fund from 22% to 40% due to its extensive safety responsibilities and infrastructure costs.
• These recommendations, presented to the House Committee on Aviation, aim to ensure adequate and rational funding for critical aviation safety infrastructure and personnel.

Ojikutu firmly asserted that the Federal Airports Authority of Nigeria, operating extensive commercial and non-aeronautical services, should no longer be viewed merely as an infrastructure manager but as a direct contributor to the safety system that underpins its substantial revenue generation.

A significant proposal has been put before the House Committee on Aviation in Nigeria, advocating for a fundamental shift in how aviation safety agencies are funded. John Ojikutu, former General Secretary of the Aviation Safety Round Table Initiative, presented a detailed plan, obtained by The PUNCH, urging the legislative body to mandate the Federal Airports Authority of Nigeria (FAAN) to contribute five percent of its commercial airport earnings to a collective fund for aviation safety agencies. This initiative aims to bolster the financial stability of critical regulatory and operational bodies within the sector.

Beyond FAAN's direct contribution, Ojikutu's proposal calls for a comprehensive re-evaluation of the existing sharing mechanism for the five percent Ticket Sales Charge (TSC), Cargo Sales Charge (CSC), and Chartered Flights Charge. Currently, this fund is distributed among the Nigeria Civil Aviation Authority (NCAA), Nigerian Airspace Management Agency (NAMA), Nigerian College of Aviation Technology (NCAT), Nigerian Safety Investigation Bureau (NSIB), and Nigerian Meteorological Agency (NIMET). Ojikutu contends that the present distribution lacks rationality and fails to adequately reflect the diverse responsibilities and operational demands placed upon each agency.

To address these perceived shortcomings, the proposed new formula would consider several key factors. These include the number of personnel deployed by each agency, the volume of operational equipment utilized, their geographical spread across the nation, the hours of operation, and, crucially, the specific safety responsibilities assigned to each institution. Ojikutu emphasized that the original intent of the five percent charges was to sustain mandatory aviation safety services, questioning whether the current distribution effectively meets this objective given the realities on the ground.

At the core of Ojikutu’s recommendations is the argument that FAAN should no longer be considered merely an airport infrastructure manager when assessing contributions to aviation safety funding. He highlighted that FAAN operates a wide array of commercial and non-aeronautical services that generate substantial revenue within the aviation ecosystem. These services encompass passenger terminal operations, aircraft landing and parking charges, cargo handling, car parks, toll gates, fuel sales, car-hire services, land and office rentals, shopping malls, and restaurants.

Further revenue streams identified include airline check-in counters, aerobridges, VIP lounges, and various other commercial operations conducted within airport facilities. Ojikutu firmly asserted that the Federal Airports Authority of Nigeria, operating extensive commercial and non-aeronautical services, should no longer be viewed merely as an infrastructure manager but as a direct contributor to the safety system that underpins its substantial revenue generation. He stated, “The non-aeronautical services that are mostly commercial operators’ services, which mainly are the airlines operators, cargo operators, etc., must necessarily include FAAN.” He further clarified, “FAAN, being a commercial airport services operator, should contribute five per cent of its airport sales service charges into the general pool for aviation safety services.”

Ojikutu maintained that agencies bearing heavy operational and safety responsibilities should not be left struggling for funds, especially when critical infrastructure, equipment, and personnel require continuous investment to maintain safety standards.

In addition to FAAN's proposed five percent airport revenue contribution, Ojikutu also put forward a significant redistribution plan for the existing five percent fund. Under his recommendations, the Nigerian Airspace Management Agency (NAMA) would emerge as the primary beneficiary, with its allocation proposed to increase from the current 22 percent to 40 percent. This substantial boost is justified by NAMA's extensive safety responsibilities and the considerable costs associated with maintaining the infrastructure vital for ensuring the safety of Nigeria’s airspace.

NAMA is responsible for providing air traffic control and navigational services to a diverse range of aircraft, including commercial, private, government, diplomatic, and military operations within the country’s airspace. Ojikutu estimated NAMA's workforce to include over 800 air traffic controllers, more than 500 engineers and technologists, and over 1,000 administrative and support personnel, underscoring the agency's operational scale. He cautioned that inadequate funding could jeopardize critical aviation safety infrastructure, potentially leading to delays in the maintenance, replacement, and calibration of essential equipment. Ojikutu also made recommendations concerning the Nigerian Civil Aviation Authority (NCAA).

The proposals presented to the House Committee on Aviation carry significant implications for the funding of Nigeria's aviation safety agencies budget and the broader operational landscape. If adopted, the recommendations could significantly alter the financial landscape for the Federal Airports Authority of Nigeria and other key aviation safety agencies, ensuring a more robust and equitably funded safety framework. The call for FAAN's 5% airport revenue contribution Nigeria represents a strategic move to leverage commercial earnings directly for safety enhancements, aligning revenue generation with safety responsibilities.

This comprehensive review of the Ticket Sales Charge redistribution proposal, coupled with John Ojikutu's aviation funding recommendations, underscores a push for a more transparent and needs-based allocation of resources. Stakeholders across the Nigerian aviation sector, including airport operators and commercial entities, will be closely watching the deliberations of the House Committee on Aviation Nigeria, as any changes could impact operational costs, compliance frameworks, and the overall financial health of the industry.

Lawyers advising clients in the Nigerian aviation sector, particularly airport operators and commercial entities, should monitor the House of Representatives' consideration of this proposal. If adopted, it could lead to new financial obligations for FAAN and a significant redistribution of existing aviation charges, impacting operational costs and compliance frameworks for all stakeholders.

Source: Original reporting via The PUNCH.