Nigeria Aviation 2018

Located in Africa’s most populous nation, Nigeria’s aviation industry has the capacity to become a main driver of economic growth for the continent and transform the country into a regional and continental aviation hub. However, the local industry at present continues to be constrained by ongoing issues, such as a lack of consolidation, infrastructure and investment, new challenges stemming from the country’s recent recession. Facing another wake-up call as local carriers struggle to stay afloat, the government is taking the opportunity to push for substantial industry changes.

Privatisation of airports, investment in a new national carrier and support for the development of a range of critical aviation services to be conducted locally are all part of the shake-up that stakeholders are hoping will catalyse the sector into reaching its potential.

Recent Performance

Though the aviation industry has demonstrated robust growth in recent years, its performance was below expectations. According to the “Nigerian Aviation Landscape – A Diagnostic Assessment of the Market” report, a 2017 study by AviaSolutions for the Federal Ministry of Transportation (Aviation), in the years running from 2006 to 2015 passenger traffic increased at a compound annual growth rate (CAGR) of 6.1%, while the sector’s GDP grew by a CAGR of 6.4% during the same period.

However, Nigeria is still only the fourth-largest air passenger market in Africa, behind South Africa, Egypt and Morocco. Relative to its population of roughly 189m as of early 2018, ranking it in the top spot on the continent and seventh globally, the country’s aviation market is relatively small. In 2015 the air customer base was only 8.5m, approximately 0.05 times the size of the population, while in Brazil the market was close to 0.50 times and the US exceeded 1.80 times.

However, the industry has grown in the number of jobs it indirectly and directly supports, from just under 159,000 workers in 2010 to 651,000 as of August 2017, according to the International Air Transport Association (IATA). Meanwhile, its contribution to GDP has varied, falling from $532m in 2014 to $364m in 2016, when it accounted for 5.79% of the transport sector’s total contribution. However, in August 2017 IATA told local media that air transport contributed $8.2bn to the country’s GDP, potentially signifying an upward change.

In the second quarter of 2017 the total number of passengers was over 3m, for a year-on-year (y-o-y) decrease of 20%, according to the latest available data from the National Bureau of Statistics. In 2016, the last full year for which official data was available, 15.2m travellers passed through Nigerian Airports. The majority, 72%, used domestic terminals, while the remaining 28% travelled internationally. Traffic increased by 1.6% in the airports that data was collected for in both years, while cargo movements increased by 1.4% to 191.7m kg. However, the data from the second quarter of 2017 shows that 42m kg of cargo was moved, a decline of 7.7% y-o-y. Murtala Muhammed International Airport (MMIA) in Lagos was by far the busiest in 2016, accounting for 34.2% of domestic passengers, 69.1% of international passengers and 91.7% of all cargo movements.

Data from the second quarter of 2017 shows an increase in performance to 74.8% of international passengers and 40.7% domestic for the airport.

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