... Before the question of how much RIA is reporting to the national fiscal purse, there should be the question of RIA’s revenue potential and what can be done to achieve it.
Liberia’s electricity quagmire may be alarming but the perpetual absence of reliable electricity supply at critical national assets such as the Roberts International Airport (RIA), has raised concerns about airline passenger safety at the airport, as well as the facility’s potential to be sustainable, even profitable.
So when the nation’s only international airport is in the news lately for all the wrong reasons, the absence of reliable electricity supply is one of two major issues hampering the smooth operation of the airport. The electricity issue manifests a potentially fatal threat to the safety of travelers and aircraft operators. The other major issue, according to an insider, is the airport’s extremely high wage bill.
Martin Hayes, the acting Managing Director of the Liberia Airport Authority (LAA), says he started working at the RIA at the level of a security guard and has risen through the ranks to be where he is today. In an interview on October 27, 2021, he told the Daily Observer that the RIA does not report any amount as a contribution from the LAA to the national fiscal purse.
“I have been at this airport for the past thirteen years. I was a security guard personnel and from one rank to another, I am here today as deputy managing director/acting managing director. This Airport does not give money to the Liberia Revenue Authority (LRA). It is not here generating revenue for the government now, but paying for fuel and salaries of employees and contractors,” Hayes said.
The hand-to-mouth situation at the RIA is direr than it seems. The recent scare reported by the passengers aboard a Brussels Airlines aircraft hovering in Liberian airspace on the night of April 27 in no small way amplifies the situation at RIA.
With no visibility to land due to darkness on the RIA runway and no contact with the airport’s control tower that night, the aircraft, which was due to refuel upon landing at RIA, was forced to return to Freetown’s Lungi Airport to refuel and wait for further instructions before making another attempt to land at RIA.
RIA has in its not-too-distant history an indelible experience the ultimate danger that looms when a flight cannot safely land on the runway due to power failure. Many Liberians young and old remember — albeit with mixed feelings — the tragic death of Joseph Tate, former director of the Liberia National Police.
According to the story, Tate was aboard an inbound aircraft, trying to land at RIA after dark, but there was no power to light up the runway. The aircraft roamed around the airspace with nowhere to land and ended up crashing. While the concerned public is eternally grateful to the Brussels Airlines pilots and cabin crew for their handling of that critical situation while airborne, the same is not easily said for the RIA leadership.
Yet, it is under such dire circumstances that President George Manneh Weah has nominated to the helm of the Liberia Airport Authority a low-level aircraft technician and part-time comedian who lied about his credentials and has no airport management experience.
Wage and fuel bills
The Liberia Airport Authority is a regulatory body with oversight of all airports in the country. For now, there are only two — RIA and the James Spriggs Payne Airport, located on the edge of Sinkor, Monrovia.
According to a former official of the Airport Authority, who requested not to be named, the two biggest expenses of the LAA are the electricity bill and the wage bill. The wage bill, according to the former official, includes the entire staff at the Spriggs Payne Airport as well.
The former official, who requested not to be named, recalls that there were about 500 employees and contractors inclusive at certain point in time, providing services at RIA. An effort was directed at retrenching the payroll to about 250, so as to ensure efficiency and cost savings for other necessities such as maintenance, fuel supply.
“I can’t be exact but I know there are about one thousand staff members right now at RIA,” the former official said. “Most of them have no particular task but, for the sake of accommodating them as members of the ruling political institution, they are there. This is what is killing the system. We felt then that there was a need to reduce the number to about 250 but our people now have raised the number all too high, making it difficult to save money to pay for fuel.”
According to Hayes, RIA requires a weekly consignment of at least 6,000 gallons of diesel (fuel) to operate. That’s well over US$1.5 million annually for fuel supply. However, he boasted that amid the many challenges confronting the Airport, particularly the lack of regular and sustainable electricity supply, salaries are now regular and forthcoming.
Since the ascendancy of the George Weah administration in 2018, according to the Liberia Revenue Authority (LRA), the RIA has reported revenues to the fiscal purse, contrary to Haynes’s claims. According to LRA, in 2018, the RIA alone generated US$3,937,073.94, while in the 2019 Fiscal year the amount of US$2,521,081.06 was generated. In 2020, the airport generated US$1,200,471.58 and in 2021, LAA generated US$2,169,019.64.
Haynes declined to share with the Daily Observer any financial documentation for this story. He also asked not to be recorded during the interview with this reporter but agreed that notes be taken. But before the question of how much RIA is reporting to the national fiscal purse, there should be the question of RIA’s revenue potential and what can be done to achieve it.
Few studies have been done about what it takes to successfully manage an airport. Although airport business models may vary by economic, policy, location and consumer dynamics, among others, all use a structure divided into two segments: aeronautical revenue and non-aeronautical revenue.
Aeronautical revenue refers to the airline, passenger, and freight processes. These include but are not limited to aircraft landing and take-off fees, fuel charges, cargo, and handling, among others. non-aeronautical revenues comprise commercial revenues from sources such as billboards, duty-free, retail (stores and restaurants), parking fees, land leases, and other commercial activities. Interestingly, the Farmington Hotel at RIA is an example of a land lease, from which the RIA should be generating significant revenue.
But it really boils down to the amount of air traffic at the airport, experts say. The more aircrafts landing and taking off from the airport, every day, every week, the better. A few years ago, Kenya Airways had daily flights in and out of Liberia.
But since the COVID-19 pandemic hit, many air carriers have reduced their frequency of flights to Liberia and some have outrightly pulled out. Currently, there are only six airlines taking off from RIA, namely: Brussels Airlines, Africa World Airlines, Kenya Airways, Royal Air Maroc, Air Cote d’Ivoire, and ASKY Airlines. In the recent past, RIA was much busier, having successfully attracted the likes of KLM, Air France, Delta Airlines, Gambia Bird, and Arik Air.
“Regarding non-aeronautical revenues, a large part, of course, lies with the duty-free shops and restaurants available in a terminal,” says the International Airport Review, an industry publication. “It is recognized within the industry that a happy passenger is more likely to be a spending passenger, and so it can be argued that an airport’s revenue strongly relies on securing a high-quality passenger experience.”
So Liberia’s airport management problem has a lot to do with being able to strategically pivot with the times — be it a global health pandemic, internal and external economic shocks, or political trends — to attract visitors that will make airlines want to increase their frequencies at Roberts International and Spriggs Payne Airports.
With nearly all of the money generated at RIA going toward the payment of salaries and benefits and the purchase of fuel, very little is left for many other areas of concern at the Airport.
“For that, it has been on for a long time now and it is not helping. Same is with almost every government office. Not much is left for development or maintenance of the existing structures and systems,” the former LAA official pointed out.
The Minister of Finance and Development Planning (MFDP), Samuel Tweah, recently disclosed that the government has embarked on finding a short term solution to the power outages at RIA by replacing all of the generators at the airport with new ones.
According to the Finance Minister, there is no budgetary appropriation for any contingency at RIA, but his office will work with the National Legislature to attend to the electricity problem at the airport.
“We are learning things we didn’t know. We were told that the new terminal should have never been run on generators but we are running it on generators. It is a mistake but we are beginning to correct it,” Tweah told his interviewers.
“New generators are being procured. We are buying more generators than we are supposed to buy due to the situation. If there is a need for three, we will get six. These are short term measures. We want the generators to run effectively to improve the management of the Airport.”
But the future, according to Minister Tweah, might be in the procurement of solar energy as a medium-term solution, while trying to secure electricity supply from the West African Power pool, through Transco CLSG.