The Nigerian airport car-hire industry is bracing for significant job losses, with over 300 positions at risk, due to a Federal Airports Authority of Nigeria (FAAN) directive. The directive requires operators to remove vehicles manufactured before 2012 from their fleets by October 2026. This move has sparked concerns among operators, who provide commercial transport services to airport passengers, about the financial implications of replacing the affected vehicles.
According to Amosola, Chairman of the Airport Cab Operators, the 17 licensed car-hire companies operating at the airport are struggling to meet the requirement. Each company has more than 50 vehicles, but FAAN has also directed them to reduce their fleets to 30 vehicles per operator. This has created a significant challenge for operators, who are finding it difficult to replace the affected vehicles due to rising operating expenses and declining earnings.
The cost of replacing the affected vehicles is a major concern for operators, with a vehicle manufactured in 2012 currently costing between N15m and N18m. Amosola said the operators are not rejecting the need to modernize their fleets but want the requirement implemented in phases to enable businesses to raise the funds required for the transition. The operators have also explored the possibility of adopting electric vehicles, but the cost of acquiring such vehicles remains beyond their current capacity.
An operator with Edom Comfort Auto Lease Ltd, Ekwuemeaku Alex, highlighted the financial challenges faced by airport cab operators. He explained that although an operator could earn between N20,000 and N25,000 on a trip, expenses such as fuel could substantially reduce the amount available to the driver. Alex also pointed out the structural disadvantage faced by airport cab operators compared with e-hailing platforms such as Bolt.
Sulieman Maman of Leviticus Auto Car Service Ltd expressed concerns about the pace at which the new requirement is being enforced. He said previous changes to vehicle requirements had been introduced over a longer period, allowing operators to gradually replace older vehicles and adjust their businesses to the new conditions. Maman also alleged that the expansion in the number of cab companies operating at airports had increased competition for a limited pool of passengers.
Gbenga Kolawole of Giant Motors Ltd disputed claims that airport cab operators were charging passengers excessive fares. He said fares differed according to the class of vehicle used, with operators offering standard cars, executive vehicles, and sport utility vehicles to passengers. Kolawole attributed increases in the cost of the service partly to higher fuel prices and charges associated with operating within the airport environment.
The operators have repeatedly engaged FAAN over the vehicle replacement requirement but have yet to find a solution that would make compliance financially viable. Aliu Abdulazee Aliu of Gentle Drive warned that failure by operators to meet the requirement could have a direct impact on employment within the sector. The Secretary-General of the Coalition of 17 Car-Hire Companies, Emmanuel Sunday, raised concerns over the impact of the vehicle-age requirement on vehicles converted under the Presidential Compressed Natural Gas initiative.
Key points
- Over 300 jobs in Nigeria's airport car-hire industry are at risk due to FAAN's directive to replace vehicles made before 2012.
- The directive has sparked concerns among operators about the financial implications of replacing the affected vehicles.
- The operators have proposed a longer transition period to enable businesses to raise the funds required for the transition.
