How we plan to turn Lagos into Africa’s premier aviation hub – FAAN MD

In a recent interview with CNBC Africa, Olubunmi Kuku, the Managing Director of the Federal Airport Authority of Nigeria (FAAN), speaks on the complexities of modernizing Nigeria’s busiest gateways. Addressing the recent friction surrounding the “Go Cashless” enforcement at Murtala Muhammed International Airport (MMIA), Kuku explains how the unique urban geography of Lagos—a terminal deeply embedded in bustling communities like Ikeja and Isolo, necessitated a strategic “Hybrid” pivot approved by President Bola Tinubu.

From navigating the recovery of a recent fire incident to the 24-month rehabilitation plan involving biometric e-gates and a first-of-its-kind transit facility, Kuku reveals a blueprint designed to move Nigeria beyond its current two percent passenger traffic-to-GDP ratio. 

Where are things with implementation of cashless policy and how does final payment architecture look like? 

I’m sure you’re aware that we actually introduced a cashless policy last year. So it was actually about July last year and we intensified in October. This year we’ve seen quite a number of policy directives from the federal government asking us to stop cash activities. There are actually two circulars that had been released by the federal government to this initiative. Now, if you look closely at our airport environment, I think Lagos and Abuja are two biggest markets, followed by Kanu and then Port Harcourt. Lagos and Abuja are quite interesting.

In Abuja, most of the passengers going towards the airport area are using the airport as their end destination. There is a small community to the right, but I wouldn’t say that all of them are mobile. I would say, big contrast to Lagos.

In Lagos, if you look at the positioning of the toll gate; to the right of the international airport where you have commuters who are either transitioning from international to domestic terminal or you actually have people who are going to other parts like Ikeja, Oshodi  Isolo, amongst others. Unlike most of the other airports around the world where they have a 13-kilometer radius, the Lagos airport is actually positioned in communities.

Of course, in the implementation of the cashless policy, it made it quite hectic because a lot of the commuters and even some of the passengers, despite a lot of the awareness, did not believe that we would actually start the enforcement on March 1st. It did create a huge bottleneck over the first few days, but we saw that it actually started to ease off. I gave some interviews recently where I reeled out some data from October where we actually started the implementation to March 3rd.

We’ve registered about 100,000 customers of which 62,000 of those were actually done in three days. In Abuja, for example, we saw the traffic start to ease off. But despite that, we are an airport.

What was the disposition of Mr President in all of these ?

Our ultimate goal outside of safety and security is also to make sure that our passengers and the neighbouring areas have a seamless experience. We’re grateful to Mr. President. He was able to step in.
For him, it wasn’t just about implementing a federal government directive. He understood the uniqueness of the airport environment and realized that if we implemented the policy without looking at a broader picture, it would become a problem. Some of the infrastructure challenges that the airport has, things around potentially widening the lanes, improving or increasing the number of payment channels that we had, we will continue to have a challenge. Within the Federal Executive Council, we did get a waiver that allowed us to do hybrid, meaning that we will continue to use some of the contactless cards that we have put out which are the non-cash payments, but we can use cash until we get a broader view in terms of the number of people who can actually use contactless payments so far.

I consider this a big win for the industry because it gives us more time to pilot, transition and put in the necessary infrastructure. I look at this as trying to hit an elephant and where do we start from talking about our regional home foundations and also the rehabilitation of the airports here. And I’m thinking how do we compete? where do we start? and how are we getting there ? So Nigeria, and especially the Muritala Muhammad Airport is one of the busiest airports across Africa.

But I will start by saying that if you look at the likes of Cairo International Airport, Oliva Tambo in Johannesburg and Addis, they’ve done things that work extremely well. They have not just made their airports a destination for passengers who are coming into their country, but they’ve made it a hub. What does that mean?  A lot of people use the terminology hub very loosely. A hub is literally an environment or an airport environment where you’re able to have transit passengers move from one location to the other without necessarily making that country their end destination. In Nigeria, for example, and when you look at the key factors that drive passenger traffic, the biggest is GDP. When you look at the GDP of the Nigerian population and you compare it to our passenger traffic, it’s actually very low, it’s less than two percent. And what that means is that a lot of the passengers, who are mostly Nigerian passengers are not traveling in contrast to all of the other areas.

To drive passenger traffic, what are deliberate steps to take? 

One, you need to either improve the business environment where there’s a lot of trade activities that is happening that brings people into the country or even the economic activity. So whether it’s tourism, whether it’s business activity. But when we start to look at the hub, we really see the future in two things.

One is in driving the hub strategy and the second is also in for both passenger and cargo. To make the hub strategy effective, a couple of things need to happen. It’s not just about developing an airport or building infrastructure.

But it really requires that we look at the enablers. And what are these enablers? For example, look at the airlines. So for us to be able to increase our aircraft movements and have additional points of entry, we look at the bilateral air service agreements that we have with other countries.

I believe that in this administration of the last three years, the aviation minister has actually improved the number of routes in terms of airlines that are going outside of the country and coming into the Nigerian market. But what that also means is that as we start to say we’re driving a hub, one, you need to make sure that there’s a transit area. Today, within the Nigerian airport, it’s quite difficult for you to transit because there’s no transit facility. And this is actually one of the things that we’re doing as part of the rehabilitation work that is happening.

With the fire incident that happened recently; does this set this back and where are in your execution? 

So yes, we did have a fire incident that happened recently. It did have a bit of an impact, but I would say that it was minimal. So, the impact was really on some of our technology that we were moving from the terminal one into the temporary terminal and terminal two. But the good news is that we were actually planning on leaving that terminal. So, Wednesday was the last day for us to leave the terminal. We had manual operations and manual checking for about four or five days.

We’ve now been able to restore our operations back to normal. Now, in terms of the rehabilitation itself, yes, the 22 to 24 months still stands. As of November, if you’re passing through the airport area, we actually have now activated the temporary terminal. So, there’s a temporary terminal that has been built. There are four airlines that have moved into that terminal.

So Middle Eastern, I believe Air France, KLM, and Ethiopia Airlines have moved in there. This is a temporary facility that was built within a three month period. We did a tour of that facility very recently. We do have alternate routes that have been built into the temporary terminal. If you notice, there’s a bridge that has been built because part of the rehabilitation works is also the entry and exit from the airport as well. So we’re, on course and within the 22 to 24 months timeline.

At the end of the day, when you look at the airport experience, it’s all about how the passenger feels from the beginning to the end point.

I’m trying to imagine how you’re looking at this. How do you plan to execute them all?

So one of the things that we did, as I mentioned earlier, was just designing an airport. We basically designed an airport from inside in. What we did was to look at the entire passenger journey from when you’re approaching the airport environment. So whether it’s tools, whether it’s the passenger drop off and then when you come in. If you notice, over the last few months, we’ve actually redesigned some of our airport operations, and that has also been incorporated into the new design that allows improved passenger flow, where you’re potentially able to check in and even using certain touch points.

So it’s not just the infrastructure. We’re looking at how we can leverage technology to improve the touch points, e-gates, biometrics. Right now we have the biometrics and the e-gates being used on entry.

We’ve incorporated biometrics on exit as well, which is incorporated into the new design. So all of those are things that we’re considering. But I think the big win for us will also be the transit facility that is being built and incorporated into this new design.