May 15, 2021

Nigeria Transport Hub

…the epicentre for all transport modes

FAAN Doesn’t Owe Salaries, Its Workforce Its Greatest Asset

4 min read

Captn Hamisu Rabiu Yadudu, Managing Director, Federal Airports Authority of Nigeria, FAAN.

The Federal Airports Authority of Nigeria, FAAN, says as a responsible and responsive corporate entity it does not owe staff salaries.

However, due to the sudden intrusion of COVID-19 pandemic into the global supply chain thus bringing aviation to its knees, FAAN management for a very brief period, resorted to a staggered manner of salary payment.

The Managing Director/Chief Executive of FAAN, Capt. Hamisu R. Yadudu, made the clarification while hosting the House of Representatives Aviation Committee members, who paid a courtesy visit to his Lagos office last week, while on project inspection tour at the Murtala Mohammed International Airport, Ikeja, Lagos.

He explained that paying salaries in two instalments was outrightly diametrical to the falsehood making the rounds that FAAN owes or is withholding workers’ salaries.

FAAN MD said at the heat of the pandemic when very few emergency flights were recorded, when cargo and passengers flights, both domestic and international were nil, the management had to vigorously exert itself and ensure salaries were paid and at the very worst, payment made in two tranches.

He said the challenge of that time compelled a little delay in the payment of the complete salary as at when due but not total skipping of salaries for workers who he said, were the greatest asset to his management team.

FAAN Appeals for Exemption from Remittances

In what is now a persistent prayer, the Managing Director made an appeal to the Federal Ministry of Finance, to exempt FAAN from the financial and revenue management law which compelled Federal Government Owned Enterprises, FGOE, to retain a mere 25% of their operating surplus and remit 75% to the federation account.

Mrs Nike Aboderin, Finance Director, FAAN

Captn Yadudu pleaded with the Finance Ministry to do a rethink and allow FAAN reinvest its operating surplus so as to continuously and seamlessly improve on the quality of its service level delivery to its numerous customers.

Yadudu highlighted the unfriendly operating environment for managing 25 airport chain, which he said placed pressure on its revenue streams as the basis of his request for exclusion from remitting 75% of its operating surplus to the federation account.

He said, “it is necessary to reiterate that aviation business is driven by volumes and turn over, with an operating profit margin of between 2.5 per cent to 5 per cent. Without the required volumes and traffic, it will be difficult to break even”, he explained.

The MD while given the abridged financial performance of FAAN for the three quarters of 2020, (January to September) during the COVID-19 pandemic, he said the agency recovered over N5billion of outstanding debts and generated revenue of over N30 billion

He said despite the harsh operating environment occasioned by the pandemic, FAAN was able to remit N2billion to the Consolidated Federal Revenue Account.

Yadudu said a revenue projection for the three quarters of the year without taking consideration of COVID-19 was, N69, 555,131,079. But the sum of N30, 084,235,670, which was 43.25%, was generated while the sum of N26, 967,455,341 was actually collected.

He further explained the actual sources of the revenue that, the sum of N17,610,732,478 was generated from aeronautical sources while N5,776,622,874 was from non-aeronautical sources.

On the Non-aeronautical sources, the FAAN boss said the target was N15,524,988,286 with the actual generation put at N7,680,802,689, and the actual revenue collected was N5,776,622,874, given a percentage performance of 75.21% on revenue collected.

It will be recalled that about five months ago, management of FAAN appeared before the House of Representatives Committee on Finance, in Abuja.

The Chairman of the Committee, Hon. James Abiodun Faleke, from Ikeja federal constituency, had demanded an explanation why a total of N65billion shortfall in the revenue FAAN was expected to have remitted to the federation account cumulatively for the past six years but never done.

Capt. Yadudu responded that the special protocols in making airports comply to recommended standards imposed a duty on the management who too often times make prompt reinvestment into the airports by way of an upgrade, maintenance and repairs in making the airports serviceable at all times and at the different seasons.

He added that those challenges requiring urgent compliance to international standards and recommended best practices made it a little difficult to exclusively placed remittance of revenue ahead, and above making the facility constantly retain its top-notch. And when necessary without prompting, to up the ante on its service level delivery to the admiration of its internal and external customers

The FAAN MD, however, concluded in his defence that, “FAAN is subsidizing 18 airports that are not viable to keep them operational. Its either we compromise on standards or comply with remittances”

Nigeria Transport Hub, NTH, says never, and never should even the faintest thought of compromising on standard ever come among the options. Safe, and secure operations are expected from the airport managers. And normally, users of the airport naturally assume these two crucial elements are given. As no one would arrive anywhere on the planet earth and begin to consider whether oxygen will be available or not. It is given. Ditto for basic infrastructure at the airports.

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