Market News

By Abdullateef Aliyu, Lagos  

Foremost economist and Chief Executive Officer of Financial Derivatives Company, Mr. Bismarck Rewane has painted a gloomy picture of the aviation industry, disclosing that due to poor infrastructure, Nigeria’s aviation sector lost $3.5 billion in revenue between 2020 and 2022.

He expressed concern over the performance of the air transport sector which he noted contracted by 0.81% in Q1 ‘25, the 6th consecutive quarterly decline.

He spoke in Lagos while delivering a keynote speech at the 29th annual conference of the League of Airports and Aviation Correspondents (LAAC) with the theme, “Financing Aviation in Nigeria: Risks, Opportunities and Prospects.”

The economist who described aviation as a very difficult industry noted that Nigeria has 32 airports but only about 20 were considered viable in 2024 while 92-96% of traffic flows through just 4.

He lamented how Nigeria spends billions of dollars in airport operations without commensurate increase in passenger traffic.

Backing his assertion with data, he disclosed that the Murtala Muhammed International Airport (MMIA), Lagos which is the busiest airport in Nigeria  processes 6.5 million passengers annually and spends 1.75bn dollars to run the airport.

This, he considered, was outrageous compared to other airports across the globe with much higher traffic but with less spending.

He said Los Angeles Intl (USA) processes 76.5 million passengers and spends 3.5 billion dollars; Heathrow (UK) processes 83.9 million passengers and spends 15.6 billion dollars; Chicago O’Hare Intl (USA) processes 58 million passengers and spends N4.5 billion dollars; Dubai Intl (UAE) processes 92 million passengers and spends 4.0 billion dollars.

Amidst plans to spend N712bn on renovation of MMIA old terminal, the economist made a case for the privatisation of the terminal while the renovation should be handled by the concessionaire.

He stated that the terminal would yield greater returns in the hands of private hands and warned of making the same mistake Nigeria made in the oil and gas sector by spending billions of dollars in refineries that are not working.

He said, “Nigeria has 23 active domestic airlines, however 5 airlines control 75% of traffic. The industry is fragmented. Domestic passenger traffic declined for the 2nd straight year to 11.5mn in 2024.”

Rewane however called for consolidation by airlines, adding, “We need very strong and effective regulation for safety; concessions and PPPs should be prioritized for airport upgrades to aid national fiscal sustainability and avoid inefficient operations. There should be investment in local maintenance, repair & overhaul hubs.

“Government should focus on policy and regulation, not running airlines or building airports directly and policy consistency is crucial for rebuilding trust with global investors and attract global aviation capital,” he recommended.

Mary Olowo-Sokeye, chief financial officer-InterGuide group who represented Dr. Gabriel Olowo, former President of Aviation Roundtable (ART) stated that Aircraft financing in Nigeria is structured to meet different operational and financial needs while ensuring compliance with the Nigerian Civil Aviation Regulations 2023 (NCAR 2023). 

She said, “With Nigerian airlines averaging 48 percent success rate compared to 81 percent global standards while there are growth in aircraft numbers and passenger numbers, challenges persist in meeting global standards.”