Nigeria’s Airport Pension Crisis Deepens as Liabilities Top ₦200bn

Nigeria’s Federal Airports Authority (FAAN) is grappling with an alarming pension liability of over ₦200 billion, a crisis attributed to its exclusion from the National Pension Commission (PENCOM) scheme during the 2004 reforms.

The scale of the liability was revealed by Ilitrus Ahmadu, National President of the Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) and leader of the Joint Aviation Trade Union’s Forum. Speaking at a strategic aviation trade union leadership conference in Lagos, Ahmadu described the situation as a “bubble waiting to burst,” warning of dire consequences for both the aviation sector and planned airport concessions.

Ahmadu explained that FAAN’s failure to join the contributory pension scheme two decades ago has left the agency with a growing financial burden. The pension liabilities, initially estimated at ₦150 billion four to five years ago, have since ballooned to over ₦200 billion.

“FAAN did not comply with the new pension reforms in 2004 as directed by PENCOM,” Ahmadu said. “An assessment was conducted to determine the contributions owed by both workers and management. At that time, it stood at ₦150 billion. Although FAAN agreed to monthly remittances of ₦350 million, they have struggled to meet this obligation, and the liability has since grown.”

He added that FAAN is still responsible for paying retirees under the old pension scheme, a separate obligation that further strains the agency’s finances.

The mounting debt has significant implications for the government’s airport concession plans, which aim to transfer the management of key airports to private operators. Ahmaducautioned that the financial overhang could jeopardise these efforts, particularly for prime aerodromes.

“No entity can be concessioned with this massive internal liability,” he argued. “If major airports are handed over without addressing this burden, FAAN will be left with the responsibility of paying over ₦650 million monthly. The agency simply cannot survive under such conditions.”

Ahmadu disclosed that unions had raised the issue with the former Minister of Aviation, warning that unresolved pension liabilities could deter investors and derail the sector’s long-term development.

The pension crisis is not the only financial quagmire facing Nigeria’s aviation sector. Ahmadu also lamented the country’s inability to capitalise on Bilateral Air Service Agreement (BASA) routes, describing many of these air pacts as unfavourable to Nigeria.

“Billions of naira are being lost annually because key BASA routes remain underutilised,” he said. He also highlighted the mismatch between Nigeria’s promotion of the Single African Air Transport Market (SAATM) initiative and its reluctance to invest in a national carrier.

“If we claim to be a frontline state supporting SAATM, why are we not investing in a national carrier? The government has decided it lacks the funds, but that decision has left us at a disadvantage in the competitive African aviation market,” Ahmadu added.

With the aviation industry under pressure from multiple fronts, union leaders have called for urgent reforms to address FAAN’s pension liabilities and reposition the sector. Without decisive action, they warn, the financial and operational viability of Nigeria’s airports—and the broader aviation ecosystem—could be at risk.

As FAAN struggles to balance its pension obligations with the demands of modernisation and privatisation, the agency faces mounting scrutiny over its ability to steer the aviation sector toward a more sustainable future.