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COVID-19 and FAAN: Avoiding a looming disaster

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…A call to emulate Trump in saving Lagos, Abuja, Enugu, PH, Kano

FAAN
The Federal Airports Authority (FAAN)

By Chris Aligbe

The Covid-19 pandemic as declared by the World Health Organisation (WHO) is no longer a tale but a stark reality.

Its global impact on all facets of human existence, from the social to the economic and from physical life itself to the spiritual, is as alarming as it is bewildering.

Our unsuspecting and unprepared world that prides itself with advances in Science and Technology even to the point of playing god by its attempt to clone human beings, woke up to be caught pants down by an innocuous virus from a relatively unknown suburb of China, called WUHAN.

Never before in world history has man experienced the kind of devastation that the coronavirus has brought on man.  Never before has any catastrophe descended on man with the kind of total coverage we are experiencing today.  Certainly, man, in modern history has never been gripped by the kind of fear that he is presently under.

During World War II, America only felt it when Japan attacked Pearl Harbour while Britain came head on at Dunkirk. But today, the entire American territory – 50 states as well as the entire UK are under the scourge of Covid-19.  Africa’s WWII experience was at El-Alarmein and along the northern territories running from Libya eastwards.  But today, virtually all African nations are under Corona attack.

Today, all the five Continents – Africa, Americas, Asia, Europe and Oceania are all under the Covid-19 scourge with Italy, Spain, France and Iran being the worst hit, even more than China, the index country.

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On the economic side, most countries’ economies have slided into steep depression; stocks have gone down with huge losses never experienced before in last half century.

Factories have been forced to shut down to curtail the marauding virus.  Essential items are fast going out of the market, even drugs and I hear, toilet rolls also are now scarce in UK and even in Nigeria.  Panic buying is now a global phenomenon.  People are told to work from home.

This is possible in IT compliant countries.  But in analogue societies where papers and files are still being carried from table to table like in Nigeria, how can we work from home?

Inflation has started to climb in most countries as Covid – 19 induced melt-down has begun.

On the social scene, new concepts have entered our lexicon.  The prevailing concepts of “self-isolate” and “social distancing” are less understood and poorly complied with to the extent that in countries like Italy, security forces are engaged to enforce.  Even in Lagos, the State Governor, Babajide Sanwo-Olu, ordered the Police to enter Churches to enforce his “not more than 20-person order”.

During the World War II, bunkers were built as safe hiding places.  Today, our houses have become bunkers for social distancing.  Our streets and squares today are emptier than the city of Idlib where the Satanic Twin are on the prowl.

At the onset of Covid-19 in Wuhan, just as happened in 1939 when Adolf Hitler unleased the Luftwaffe and Panzers on Poland, the world laid back and only got jolted when Hitler turned his deadly machines on France.  The US, Europe and indeed the entire world were unconcerned when the covid-19 was unleashing its scourge on China.

It was just a “China Virus”, apologies to Trump.   But when it moved from China epidemic to global pandemic, the unconcerned and laid-back world got jolted into a staccato of reactive actions that not only left citizens more confused but did not also address the challenge.

From the US to UK, Italy, France, Spain, Iran, the unpreparedness is evidenced by the ravaging coronavirus scourge on human lives, the economy, social life and in all spheres of human existence; schools and  institutions of higher learning are all closed, travel bans are imposed, airline operations are suspended, visas cancelled, withdrawn or no longer issued, even if temporarily.

Sea Ports, Airports and land borders are closed even within regional blocs like EU, AU and ECOWAS and Gulf States as well as nations with excellent bilateral relations such as US and Canada.

The pride of a globalised world has, in a moment of just two months, been returned to original primitive territoriality, no thanks to poor response to covid-19.

Marcopolo, Columbus, Dagama and Drake, pioneers of sea faring, the Wright Brothers, ICAO and IATA must be wondering how a virus has, within four months reduced decades and centuries of great efforts for common humanity to inconsequence.  A virus that for almost four months now has remained above the scientific, technological and mental horizon of man; no clear understanding, no drugs yet, no vaccine.

What is yet to be attacked is ICT and other Communication media.  The coronavirus is worse than the German Blitzkrieg of WWII.

The covid-19 pandemic, no doubt, has in so short a time ignited a global downturn in the economic life and fortunes of man and nations with ramifications never experienced in recent world history.

It is true that every sector of life has been or is being impacted.  But most devastating is the Aviation Sector; from airlines to airports and from Handlers to other numerous service providers, none is spared.

I am not oblivious of the fact that road, rail and maritime transport modes have all been severely hit.  But because air transportation has proven to be the best physical connector of man and, by this role, most impactful in the life of man across divides, major focus is being put on it here.

This position is borne out by the fact that close to 90% of the spread of the virus was through air transport.  Virtually, every index case in all countries outside China arrived their destinations by air transport.  In Nigeria, only one “virus-carrier” came through the land border.

This is why the entire world, including Nigeria has closed air transport mode.  Virtually all major airlines have suspended international operations, airspaces and airports are closed to international flights.

Even Domestic flights have thinned out in many countries as travel slows down while in countries like Italy, Spain, France, Germany and South Korea, where lockdown is effective, neither domestic operations nor train and road transport services are on.

In Nigeria, all our five international airports are shut to flights while domestic operations are already contracting.

So far, the actions taken by the government in the aviation sector are in the right direction, even if a bit late.  It is also commendable that the President has set up a well-composed team on the economic impact of Covid-19.

Globally, it is a known and widely accepted fact that the aviation sector is the hardest hit by the Covid-19 pandemic.

As in all nations of the world, all our airlines are severely impacted; passengers have thinned down to the point that flights have become huge losses, schedules have been reduced drastically to 40% at best and even to zero at worst.  Airlines are bleeding.

And because of the pivotal role airlines play, any impact on their services immediately flows down to all other service providers and facilitators.  More critically, both aeronautical and non-aeronautical revenues take a smashing. And this is the focus of this piece.

It is a known fact that in Nigeria, service providers – NCAA, FAAN, NAMA, NCAT, NIMET and AIB derive their IGR largely from airlines; from 5% Passenger Service Charge, generally shared by the Agencies, to overflight and enroute charges specific to NAMA and Landing and Parking charges as well as rentals and leases specifically due FAAN, are all dependent on the level of airline operations.

In Nigeria, the most impacted Agency is the Federal Airports Authority of Nigeria (FAAN). The reasons for this are not far-fetched.

First, the Airport Authority manages 22 airports, all owned by the government.  Secondly, FAAN is not under annual subvention but is expected to run its operations from its IGR.  FAAN’s total IGR comes largely from MMIA, Lagos which contributes 58% while the next airport, NAIA, Abuja generates only 18% which is only just enough to run it.

All other 20 airports including the remaining three international airports; kano, Port Harcourt and Enugu only generate 26% of FAAN’s total annual IGR.

At normal times, FAAN requires close to 250% of its annual IGR to effectively reasonably run these airports.  This is why our airports deteriorate on a continuous basis and when danger looms as with the Abuja airport runway and Enugu airport, the government has to make special provisions in billions of naira to address challenges.

Today, not many people know that foreign airlines provide over 60% of the aeronautical revenue of the aviation industry due to the fact that the 5% PSC is higher on international ticket fares as well as the fact that they are more up to date in meeting their financial obligations to the Agencies.

With the closure of airports to international flights and the contracted schedules of domestic airlines, FAAN is losing close of N5billion monthly.

In spite of this, the Authority has to keep its staff at all the airports to avoid security breaches and degradation of facilities.  But there is no way facilities will not run down.

Yet, it is during periods of shut downs like this that all facilities; from conveyor belts, runway lights, air-conditioning systems, conveniences, etc should come under effective maintenance.

But all these can only be carried out with funds which FAAN does not, and cannot generate under the present circumstances. What then is our option?

Can we borrow a leaf from other countries who are already looking beyond the covid-19?  Surely convid-19 will end, though we cannot predict when.

The President of the United States where the spread has been exponential has secured a legislative approval of a US$2trillion (Two Trillion Dollar) package designed as “Stimulus and Relief” to ensure the non-collapse of the US economy.  In this package, the airline subsector which is wholly private is programmed to benefit up to US$200billion.

However, while our airlines need and should attract very deft financial intervention, not like the killer intervention of Sanusi’s CBN, BOI and AMCON, but one that recognises that if they die, the industry dies.

However, of more critical concern should be how to ensure that the nation’s 22 airports do not deteriorate to the point that at the end of Covid-19 which certainly will come, the nation will need huge funds outlay to resuscitate them.  This will be a very sad commentary.

FAAN needs a “sustenance intervention fund” in an ongoing manner until normalcy returns at the first instance.  Otherwise, Abuja, Lagos, Port Harcourt and Enugu and Kano, as well as all domestic airports, will return to decadence.

As at today, FAAN has the right sensitivity to these challenges.

And since luckily, the Aviation Minister is in the Presidential Committee on covid-19 impact, he should with his knowledge and usual pro-active posture, ensure that the CBN Governor, who so far has shown high responsiveness to the challenges, should put our airports and, indeed Aviation, on priority in his intervention efforts.

With this, the industry will pick up its role as a catalyst in post-covid-19 economic resurgence.

 •Chris Aligbe, Aviation Consultant

Vanguard News Nigeria.

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