In News by Oluwaseun Samuel on the 28th, August, 2020

FAAN Hikes Passenger Service Cost By 100% in September

FAAN Hikes Passenger Service Charge By 100% in September

FAAN

FAAN Hikes Passenger Service Cost By 100% in September

The Federal Airports Authority of Nigeria (FAAN) will improve its passenger service cost by 100% beginning September 1, 2020.

The company’s Managing Director, Cap. Rabiu Yadudu who made the announcement on Thursday August 27, stated the choice was influenced by the loss recorded within the aviation sector as a result of Coornavirus pandemic.

Following the assessment of the PSC, home passengers who used to pay N1000 will now pay N2000, whereas worldwide passengers throughout the Financial Neighborhood of West African States (ECOWAS) area will now pay $80 whereas others can pay $100.


Yadudu Stated;

“Airport administration is capital intensive. FAAN has not elevated PSC since 2011, regardless of all the large capital investments at our airports. The present PSC cost of N1,000 is now not reasonable because it doesn’t correlate with realities of cost-related inflation fee which the CBN has put at 12.82per cent.

“Moreover, FAAN, till late 2019 was amassing the naira equal of PSC at an official fee of N305.50 – N344.38 to a greenback when airways have been amassing at subsisting market fee of about N362 to a greenback.

“It has, subsequently, turn into crucial to assessment the PSC, from N1000 to N2,000 per passenger. This assessment which takes impact from September 1, 2020 has already been communicated to the airways.

“The passenger service cost for home flight was N1000 however it’ll now be N2000. For a world flight, it was $50 for all however now, passengers throughout the ECOWAS area will probably be made to pay $80 whereas intercontinental passengers will probably be paying $100. So the increment is by $50.

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“This improve is only a matter of necessity. If it isn’t crucial for us to extend, you’ll by no means see this improve. Secondly, our income is down by over 95p.c. FAAN is a service supply company and in case you are delivering service and your income is down by 95per cent, what do you do? You’ll do no matter you possibly can legitimately to proceed to ship the service with the identical degree of high quality.

“The rise of PSC doesn’t even guarantee or assure us that we are going to be again to regular however it’s only the start. This is only one side of the need as a result of we have to survive and maintain delivering and that’s the reason we’re rising it.”

“You must perceive that just about each side of our operation is enterprise and on this modern-day, it’s relative.

“For those who have a look at it from the side of the passengers and airways, it’s clearly not probably the most acceptable time however for those who have a look at it from the perspective of the service suppliers that’s about to be consumed by the pandemic and the financial scenario, then there is no such thing as a higher time for FAAN than this time as a result of it will have been worse if we simply sit down and fold our arms.

“It’s worthy of notice that the Federal Authorities is rising its direct deduction from FAAN to 40 per cent from 2021.

“With such deduction, the Authority can have a shortfall of over N16billion on overhead value. The Authority is nonetheless partaking the federal authorities to exempt her from this deduction.”

On what the fees could be used for, Yadudu added;


“It needs to be famous that ICAO’s suggestion in Doc. 9562 stipulates that income generated by airports be transparently re-invested wholly in working and growing airport services.

“Even earlier than the rise, the PSC we obtain is what we use to pay our salaries, our overheads and virtually all our prices. Now that we’re quick in income, after all, the increment will probably be used to additional enhance our services.

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“Most of our airports have dilapidated buildings and airports are over 30 years outdated. We’ve loads of work to do, enhance the airfield infrastructure, the runway, the taxiway, the pavement and infrastructure services throughout the terminal just like the gear for bags dealing with, air con, virtually all the pieces throughout the airport wants refurbishment and with this, we hope to attain extra enchancment.”

 

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