Aviation sector sees steady but slow growth in five years
The Nigerian aviation sector has in the last five years experienced a slow but steady growth as regards safety, infrastructure development and increase in cargo and passenger movement, BusinessDay finding shows.
The number of airlines, passenger traffic, cargo movement and employment created by the industry increased considerably between 2015 and 2019. Experts are of the opinion that in the five years prior to 2020 – where there was a lockdown that affected aviation business for about five months – the industry had recorded gradual growth.
BusinessDay’s check shows that parameters such as aviation safety, trained, equipped and knowledgeable personnel, aircraft fleet size, infrastructure, equipment and tools have improved over the years.
Seyi Adewale, CEO, Mainstream Cargo Limited, explained that safety being the number one consideration in aviation was optimised by the Nigeria Civil Aviation Authority (NCAA) during the Harold Demuren era whereby oversight functions by the agencies increased in span and scope and Nigeria attained a Category 1 Status until the unfortunate June 3, 2012, air crash.
According to Adewale, consequently, Nigeria had to increase its oversight function further with deeper highlights on age and maintenance of aircrafts operating locally.
The country’s airport infrastructure has definitely improved with the resurfacing of Abuja, Lagos and Enugu airports; the expansion and reconstruction witnessed in Port Harcourt, Kano, Lagos and Abuja terminals, he said.
Many of the potholes experienced within the airport runways and environs have been fixed, he said, adding that domestic airlines have grown to 23 airlines fully operating with another 16 holding AOC licences and many have shown signs of starting commercial operations this year.
The check by BusinessDay also shows that airlines have acquired more aircraft while new ones are completing processes of acquiring an Air Operating Certificate (AOC) to commence domestic operations.
Azman Air, one of Nigeria’s domestic carriers, announced the acquisition of a second Airbus A340 aircraft, as part of its expansion drive in 2021.
The Kano-based airline will also buy three Boeing 737-800 aircraft to expand its network into West Africa and for international operations. It will also secure an additional five lower capacity aircraft to serve routes with fewer passengers.
Air Peace will receive two brand new E195-E2s by the end of January 2021. Air Peace had also taken delivery of two new ERJ-145 aircraft to help boost its domestic and regional operations.
The airline also signed a firm order for the delivery of 13 E195-E2 brand new jets and will be expecting three of these jets in this year. The airline says these jets would be used on its local and regional routes.
Dana Air also recently expanded its fleet with acquisition of two Boeing 737-300 and had recently received two aircraft that had gone on maintenance.
In the heat of the pandemic, Green Africa owned by Babawande Afolabi, is now completing the process of acquiring the Air Operator’s Certificate (AOC), which will be issued by the Nigerian Civil Aviation Authority (NCAA), a required step before any airline can start flying passengers.
United Nigeria Airline last week had its demo flight at the Sam Mbakwe International Airport, Owerri, from MMA, Lagos, in preparation for domestic flight operations in Nigeria.
According to data by the Federal Airports Authority of Nigeria (FAAN) and National Bureau of Statistics (NBS), from 2015 – 2019, total passenger traffic (international and domestic) grew from 15 million to approximately 16.5 million, while cargoes and mails increased from 196.7 million kg to approximately 240 million kg.
A breakdown of cargo and mail that went through the nation’s airports include: Year 2015 – mails of 7,479,262kg and cargoes of 189,184,656kg; for 2016 – mails 5,031,135 and cargoes 189,252,953; year 2017 – mails 39,019,594 and cargoes 137,677,079; year 2018 – mails 47,318,518 and cargoes 164,938,399, and year 2019 – mails 55,625,908 and cargoes 174,880,619.
Aircraft movements also increased from 249,397 in 2015 to over 252,000 in 2019, while aviation personnel increased from 159,000 in 2015 to over 651,000 recorded in 2017.
According to Adewale, the aviation sector has been progressively increasing its contribution to GDP at growth rate of 0.12 percent 2017 – 2018 and 0.14 percent in 2018 – 2019.
He said the actual 2019 GDP contribution was N198.62 billion, which indicates 0.4 percent of GDP with strong growth prospects according to the International Air Transport Association (IATA) 20-year forecast for Nigeria aviation sector.
He however pointed out some grey areas the Federal Government still needs to work on, such as ensuring the country has the right night landing aids in all its airports, especially the international designated airports.
“There should be less perceived ministry interference with the day-to-day operations of the NCAA, the Nigerian Airspace Management Agency (NAMA), Accident Investigation Bureau Nigeria (AIB-N), Nigerian Meteorological Agency (NIMET) and FAAN,” he said.
The Federal Government needs to also speed up completion of all airport projects, some of which include airport concession and privatisation, he said, as there is also a need for the aviation ministry to reduce and harmonise airline and airports’ taxes and other charges and levies on domestic airline operators.
John Ojikutu, aviation security consultant and secretary general of the Aviation Safety Round Table Initiative (ASRTI), told BusinessDay that in the last five years there has been increase in the international and domestic passengers’ traffic, while there are reported earnings on the international ticket sales, which implies more earnings for government as regards Tickets Sales Charge (TSC).
While there have been no reports of debts owed by foreign airlines that contribute about 80 percent of Nigeria aviation commercial earnings, the domestic airlines are said to owe the aviation public agencies over N20 billion, he said. This is the total debts pre-Covid-19 era.
One of the shortfalls is that aviation policies have generally been very inconsistent to the development and growth.
“Unfortunately, our policies have benefited the foreign airlines more than they do for the local airlines,” he said. “Where the foreign airlines operate multiple destinations into more of our airports than the domestic airlines, we must reverse the situation or policy if it is, otherwise the industry has no future,” he said.