Passengers, aircraft movement drop Q1 2017 amid economic downturn

Nigeria’s air passenger and aircraft movement declined in the first quarter of 2017, compared to same quarter of last year as a result of the economic downturn.

Reports released by the National Bureau of Statistics, (NBS) showed that passenger traffic declined by 29 per cent in the first quarter of 2017 relative to 2016. Total aircraft movement dropped by 29.89 per cent within the same period.

Experts said this development partly resulted from the Abuja Airport closure and the general economic downturn, which affected the purchasing power of customers.

Tayo Ojuri, an industry expert and Chief Executive Officer, Aglo Limited, an aviation support service told BusinessDay that air travel industry is often the first to be affected when there is a recession since travellers are propelled based on their purchasing power. Ojuri added that the industry is also often the last to pick up when the economy comes back to life.

The NBS data shows that 2,505,612 passengers passed through Nigerian airports within the period, 67.3 per cent of which comprised domestic passengers travelling within Nigeria. 22.7 per cent were international passengers who either entered or left Nigeria. This is a considerable drop compared to 31.3 per cent the previous quarter, and compared to the 34.5 per cent recorded in similar quarter of 2016

Ojuri assured that the Nigerian air transport industry will continue to be attractive because most travel in Nigeria are business travels.

Industry experts say that the closure of Abuja Airport might have impacted international passenger numbers less than the domestic ones as trips to or from Abuja usually had corresponding effects on other domestic airports. Nevertheless, the decline was also broad-based, with nearly all airports contributing to the decline.

BusinessDay’s checks show that international airlines had to cut down frequency of flights into Nigeria, while local airlines suspended operations as a result of the economic downturn and the high exchange rate.

Kola Olayinka, Regional Commercial Manager West Africa at British Airways said that Bristish Airways adjusted from flying Boeing 747 to flying 777 because of prevailing realities.

“Dollar scarcity is bringing about uncertainties to all businesses. Our dollars are in our banks that needed to be transferred. We were selling tickets at the rate of N197 to a dollar before it went up to N285 to a dollar,” Olayinka said.

“At this rate, for every $I million, we lost N80million. Some of the airlines could not survive and there were a lot of readjustments,”

In addition to this, United States carrier, United Airlines and Spanish carrier, Iberia pulled out of the country.

Relative to the previous quarter, there were 13,024 fewer aircrafts to travel through Nigerian airports, a decline of 23.7%. This decline was considerably smaller than the decline in the number of passengers, of 28.2%, indicating that aircrafts carried fewer passengers on average.

Gbenga Olowo, President of Aviation Round Table (ART), explained that recently there has been continuous depletion of the fleet of Nigerian airlines.

Olowo recalled that in 2010, Nigerian airlines had 54 commercial operating aircraft but by 2014 the fleet had reduced to 39, noting that with declining fleet size, route expansion would be limited and robust schedule very difficult and down time for maintenance would impact negatively on schedule.

He attributed the failure of airlines to replacing or adding more aircraft to their fleet to the harsh operating environment and high charges paid by the airlines to aviation agencies.

 

IFEOMA OKEKE