Nigeria’s aviation to suffer worse decline 2016, NBS forecasts 

The aviation sector caters for 3.5 billion passengers globally and is said to be a major facilitator for as much as 25 percent of world trade annually, says the International Air Transport Association (IATA). But given the global macro challenges, industry sources estimate that air transport business in some African countries have declined by US$1 per passenger since the slide in oil prices two years counting. 

Nigeria happens to be in the bull’s eye of crashing oil prices, yet IATA could see huge potential for air transportation in Nigeria, owing to the country’s population size put at 170 million. The association held that getting the huge population into flying required a sound business policy that would bring about low cost airlines. It also gave a yardstick to the Federal Airports Authority of Nigeria (FAAN) to ensure that the nation’s airports become fully functional if this potential is to be realized. 

The state of airports in the country hasn’t won a pass mark yet as the remodelling exercise is still underway while some airports are already rated worse in the process. But even with that, latest reports from the National Bureau of Statistics show that air transport grew by 3.7 percent year-on-year in 2015 and contributed 0.1 percent to total GDP, the equivalence of N63bn or (US$317m).

The report showed an increase of aircraft movement in/out of Nigerian airports in 2015 put at 61,692 approximately 6.9 percent. However, the NBS noted that in the third and fourth quarters of 2015, there were 11.3 per cent and 14.3 per cent fewer domestic flights than in the same quarter of 2014 respectively, which resulted in a total of 46,157 and 50,686 flights in the third and fourth quarters.

It also added that the year-on-year declines in the number of international flights recorded 3.3 per cent and 10.5 per cent in the third and fourth quarters of 2015 respectively, which resulted in a total of 11,547 international flights in third quarter of 2015 and 11,006 in the fourth.

The Bureau explained that there was a large quarterly increase in domestic flights in the fourth quarter of 2015 (of 9.8 per cent) international flights saw a decline of 541 flights, or 4.7 per cent, reversing the increase of 344 flights (3.1 per cent) recorded in the third quarter.

This revelation indicates that the difference between the number of domestic and international aircraft to pass through Nigeria airports tended to be smaller than the difference between the number of domestic and international passengers, reflecting the fact that international aircraft tended to be larger, and therefore carried more passengers.

The NBS, also recorded a total of 89.5 per cent of cargo movements across the country in the last quarter of 2015 stating that whereas the third quarter of 2015 saw a year on year decline of 13.9 per cent, the fourth quarter saw a year on year increase of 12.8 for the airport.

The bureau said that the third quarter of 2015 saw a quarterly increase in the weight of cargo to pass through Nigerian airports of 724,792Kg or 1.8 per cent, to reach 41,636,713kg.

The bulk of the weight of cargo moved through Nigerian Airports as the NBS declared, went through MMA in Lagos during the second half of 2015.

The data added, “This airport accounted for 91 per cent and 88.2 per cent of the weight in the third and fourth quarters; the decline in the share between these two periods is in spite of an increase in the weight of cargo to move through MMA of 14.8 per cent.

“The decline was mainly the result of a large increase in the weight of cargo to pass through Kano Airport between these periods. Whereas in the third quarter of 2015 the weight of cargo to pass through Kano was 1,681,772kg, this rose by 2,474,862kg (147.2 per cent) to 4,156,634kg in the fourth quarter.

“As a result, Kano significantly increased its share of cargo between the fourth quarters of 2014 and 2015, from 3.3 per cent to 7.7 per cent. Port Harcourt also saw an increase over this period, from 2 per cent to 2.7 per cent, as despite a year on year decrease in the weight of cargo moved of 4.6 per cent, this decrease was considerably less than for Abuja (16.3 per cent) or Calabar (44.4 per cent).”

Typically, the report highlighted the gains in business activities at Nigeria’s airports in the previous years. But with the current lagging indicators hitting hard on the industry – fuel scarcity, crash of the naira giving rise to high maintenance cost, the NBS forecasts that the aviation industry may suffer the worst of times in its history this year – 2016, if measures are not employed by government to tackle these challenges head-on.

Reports on airline business performance released by the Nigerian Civil Aviation (NCAA) in Q1 2016, showed that flight delays recorded 8,478 while 281 flights were cancelled within the period under review. These records are the highest of all times compared to other previous quarterly reviews.

The same report held that Arik Air, Nigeria’s air giant of the moment, topped the chart with 2,801 delayed flights and 99 cancelled flights out of the 4,926 flights it operated in the first quarter. Second on the list was Aero Contractors, which recorded 1,762 delayed flights and 94 cancellations out of its 2,823 flights operated in Q1. Other airlines like Air Peace, Azman, Dana Air, First Nation, Med-View and Overland were also captured in the report.

This one worrisome signal has been blamed on scarcity of Jet A1 -- Aviation fuel – by the airlines. In a statement, the Arik spokesman, Mr. Ola Adebanji said: “With over a hundred flights daily, this limited supply of aviation fuel has resulted, regrettably, into flight delays and outright cancellations.”

Should the fuel enigma persists, some airlines may not stand the hard times. It appears Aero is currently having the toughest of times as the airline hasn’t been keeping to its schedules lately, raising doubts about its survival in the face of managerial challenges and the prevailing doldrums in the industry.

Crash of the naira is another snag that poses great danger in the future of Nigeria’s aviation. It has prompted hikes in air fares, particularly on foreign routes, slowed down passenger movement and frequency of inbound and outbound flights. Some of the foreign airlines – Virgin Atlantic and Iberia -- are already contemplating pulling out of the country due to inability to repatriate their revenues into Pounds and Dollars without losing the value.