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MMA2: The big landlord and his tenants


Although, the terminal operator has for the umpteenth time insisted that it has not increased its rent from the previous rates, tenants are alleging that there has in fact, been about a 100 per cent increase in rent in the last one year.

The Head of Corporate Services, Bi-Courtney Ltd, Mr. Olufemi Kolawole, said his company has not effected nor made any demand for increase in rent from any of its tenants, adding that on the contrary, tenants whose leases are expiring have been invited to renew their leases, at the same prices as their expiring leases or at reduced rates.

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He insisted that there has been no increase at all since Bi-Courtney started operations in 2007, saying that it has neither given any bank or business operator a quit notice, claiming that banks are having issues and some of them are rationalizing their operations.

MMA2 terminal, which commenced flight operations in April 2007, after the old terminal owned by the federal government got burnt in May, 2000, is undoubtedly an edifice that has breathed fresh air into airport facilities in Nigeria through the Public Private Partnership (PPP) of Build, Operate and Transfer (BOT) and it is the best in the sub-region.

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When the old terminal abruptly got burnt, the federal government under Chief Olusegun Obasanjo, sounded it loud and clear that it was not ready to inject additional funds to erect a new structure more so, as the government believed that the involvement of the private sector will go a long way to propel not just the sector forward, but the entire country.

The call for the involvement of the private sector brought in the Royal Sanderton, the initial construction company that was awarded contract to build a new local airport for the Nigerian aviation industry.

But after more than a year, the contract was awarded to the construction company, it was cancelled by government due to its (Sanderton’s) inability to secure enough funds for the construction of the terminal. Its inability to secure needed funds, eventually brought about the birth of Bi-Courtney Services, which was re-awarded the contract and ensured its construction in good time.

But since the concessionaire came onboard, it has been one problem or the other and it has been striving to stay in operations.

Apart from the recent problems the terminal operator is having with its tenants, issues surrounding the agreement that brought about the terminal have always been confronting the operator.

The first crisis came up on the duration on which Bi-Courtney is to operate and transfer the airport to the government as there was an argument that  the company was to operate the terminal for 12 years. Some said it was 24 years while Bi-Courtney claimed that it had an agreement to operate it for 36 years.

One of the major domestic operators, Arik airline, had refused from the outset, to operate at MMA2 even though Bi-Courtney attempted to take over the General Aviation Terminal (GAT) where Arik is operating.

The issue degenerated when Bi-Courtney’s demand that the Federal Airports Authority of Nigeria (FAAN) should remit to it all the money generated from GAT since the date the agreement that set it up with exclusive approval to operate domestic terminal in Lagos became effective.

Currently, four airlines: IRS, Aero, Air Nigeria (formerly Virgin Nigeria), Dana (new entrant), Associated Air and some chartered aircraft that run skeletal services, operate from/into the terminal.

Before the airlines attempted to move out of the airport, other tenants like banks had earlier come up with compliants about the rates charged by Bi-Courtney to the extent that Guarantee Trust Bank (GTB) attempted to move its cash branch before the management of the bank was able to renegotiate with Bi-Courtney.

The banks which operate as pay/savings points with Automated Teller Machine (ATMs) for travellers and the airport users say they are groaning under the yoke of high rent rates charged by the MMA2 management.

Apart from the GTB, other banks like Zenith and Skye are planning to leave while UBA which has only one ATM, removed it long ago.

The banks claimed that its annual rent at the terminal was increased from N60 million to N80 million.

Other banks such as Access Bank and Oceanic Bank moved their branches out of the terminal before airlines cried aloud and Aero eventually attempted to relocate to its private terminal which was later stopped by a court injunction.

Aero had planned that its operations to Osubi airstrip and Port Harcourt would originate from its private terminal at GAT.

The head of commercial of Aero, Rob Prophet, said at that time flights operated with the Dash-8 fleet of aircraft would no longer depart from MMA2, but will be operated from Aero’s private terminal at the airport.

According to him, the move became necessary as the cost of MMA2 operations is astronomical and “we have continually tried to reach an amicable cost structure with Bi-Courtney Aviation Services Limited but to no avail.”

He said the airline’s management had agreed not to relocate because of a court injunction.

Aero in a statement said, “we regret to inform that due to an exparte injunction by Bi-Courtney restraining us, resumption of all Dash-8 operations out of our private terminal is herby suspended. Our services will continue to operate out of MMA2 till further notice.”

While Aero wanted to relocate, others like Dana said it had no problem with the operator of MMA2.

According to the Dana Air Corporate Communications manager, Mr Tony Unisdamen, the issue of high charges is not peculiar to Bi-Courtney.

Unisdamen explained, “as far as I am concerned, Dana has a good working relationship with Bi-Courtney because we understand that the issue of high cost is not only in MMA2 but the whole industry. Business operating cost in Nigeria is higher than any other country in the world because of the operating environment.”

Chairman of the Airlines Operators of Nigeria (AON), Mr. Steve Mahonwu, said that relocating out of MMA2 is a matter of internal logistic issue with individual airlines.

He explained that if the airlines are alleging high cost of operations at MMA2 and the operator of the terminal said it had not increased charges, it becomes a choice for airlines to decide whether to continue operating from there or not.

Mahonwu said that the airlines should be allowed to exercise their freedom as entrenched in the constitution.

He said, “there is economic freedom and airlines should be permitted to enjoy such freedom. Before MMA2, Aero was operating from its terminal because it had some small aircraft that that facility could accommodate and if because of logistics or whatever reasons the airline decides to divide its operations, there is nothing bad in that. The airline has done well by obeying court order.”

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