Data from the National Bureau of Statistics (NBS)compiled from contributions by the Federal Airports Authority of Nigeria (FAAN) show that total passenger traffic through Nigeria’s airports in Q2, 2021 increased by 73 percent year-on-year and nine percent quarter-on-quarter to 3.2 million.
Supportive data from the national accounts show that air travel grew by 4.98 percent in the second quarter, 2021.
Despite the impressive year-on-year increase, Nigeria’s aviation sector is still recovering, with overall passenger traffic still below pre-pandemic levels.
While domestic air travel appears to have rebounded significantly, with a passenger load factor of around 80 percent of pre-pandemic levels, foreign air traffic remains low, at roughly 40 percent of pre-pandemic levels.
According to a document by FBN Quest capital, the trend in Nigeria mirrors that of other countries, where strong domestic travel demand has helped to boost air traffic volume.
As with most other nations, recovery in Nigeria’s international air traffic has been slow due to mobility limitations (re)imposed by various governments across the world, particularly with the emergence of new strains of the COVID-19 virus.
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The document further stated that following the collapse of global air travel in 2020, most airlines were only able to remain afloat thanks to critical life support from their governments, totalling c. USD243bn (or 0.3 percent of global GDP for FY ’20) according to industry studies published by the International Air Transport Association (IATA)
In comparison, the total financial aid announced by the federal government is merely 0.02 percent of the country’s GDP or NGN27bn. The Nigerian Civil Aviation Authority (NCAA) estimates that the pandemic has caused the county’s airline industry $1billion.
Furthermore, Nigerian airlines have had to cope with the FX liquidity constraint, which has negatively impacted their operations, because service parts and maintenance checks are priced in foreign currency.
We can only infer that Nigerian airlines are still losing money based on the lower load factors and issues mentioned above. According to IATA, international air travel is expected to improve FY ’22.
However, the recovery will be uneven. Also, countries with large domestic markets, faster vaccination rollout, and less restrictive government policies will recover faster than the others.
For Nigeria, the pace of vaccinations (less than 5percent of the population has been vaccinated) will determine the recovery path for foreign travel and the sector’s full recovery, the document states.
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