business travel continues to drive air passenger traffic across the country.

Wheels up but still waiting for take-off

                                                                                          

Today we turn our attention to Nigeria’s aviation sector. Trends within the industry are often regarded as a sound private consumption indicator. Following the recent exit from recession (as seen in the Q2 national accounts), air transport grew by just 0.1% y/y. The sector has suffered from relatively low patronage due to softer demand. However, business travel continues to drive air passenger traffic across the country.

                                                                                                                  

  • For domestic travelers, ticket fares doubled earlier in the year and have remained high. Passengers could then secure a return trip ticket for US$85 on the Lagos-Abuja route. However, the cost has now risen as high as US$175 on the current domestic providers (Arik Air and Air Peace). We expect even higher prices over the next month as we approach the festive season.

  • High operational costs lie behind the increased ticket fares. To give one example, aviation fuel accounts for about 40% of operational costs. Industry sources indicate that the price of aviation fuel currently stands at N265/l.

 Wheels up but still waiting for take-off

  • For international travel, fx sourcing issues had a severe negative effect on airline operators as they could not repatriate funds. Nigeria became less attractive for operators and a few airlines reduced the frequency of their flights. However, the CBN has managed to reduce the blocked funds to US$175m from the initial US$600m according to IATA.

 ·         Nigeria’s aviation industry has the potential to become a pan-African hub similar to Kenya. However, the infrastructural deficit within the industry will not permit. The three major international airports in the country are undergoing renovation and expansion.

About Christopher Ezeadichie 3363 Articles
Ezeadichie Onyeka Michael is the Co-Founder of Haelsoft, a Professional Services Company in Nigeria that provides Information and Technology Services for small and big size companies in Nigeria(Africa). He is an Entrepreneur and Venture Capitalist with Expertise in Web Technology and Digital Marketing. He has developed & Implemented Digital Marketing Strategies(Campaigns) for top brands across sectors in Finance, Telecommunication, Ecommerce who operate in the African market. His professional experience includes key roles at Google Business Group(Nigeria), Google Women on the Web (Nigeria), Edubridge Consultant and Wild Fusion where he has trained over 500 Entrepreneurs on how to use various Web Technology products to succeed online. Customer centricity, User Experience, Conversion optimization are 3 pronged framework he applies around the often-frenetic world of web analytics to ensure that clients stay competitive in the market. He believes that investing in talent is the key to long term success for brands across Nigeria (Africa).

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