Market News

BY  Ifeoma Okeke-Korieocha 

Nigeria’s domestic air travel declined in 2024, driven by aircraft shortages and soaring ticket prices that placed air travel out of reach for many passengers.

Data from the Nigeria Civil Aviation Authority (NCAA) shows a 10 percent drop in passenger traffic, with numbers falling from 12.05 million in 2023 to 11.55 million in 2024.

The decline was caused by foreign exchange shortages, escalating maintenance costs, and regulatory hurdles, which forced airlines to ground planes and reduce operations.

BusinessDay had reported that the high cost of spare parts and maintenance forced several airlines in Nigeria to park their planes across various airports last year.

BusinessDay learnt that foreign exchange scarcity also forced some airlines to take spare parts from one grounded plane to fix others and keep them flying.

Passengers travelling from Lagos to second-tier airports such as Ilorin, Akure, Asaba, Benin, Kaduna, Katsina, Sokoto, Ibadan and Yola did not have the luxury of choosing airlines to fly due to the persisting aircraft shortages at Nigerian airports.

Limited airplanes have forced airlines to either reduce frequencies or suspend operations in and out of second-tier routes, paying more attention to first-tier or frequently used routes to maximise economic benefits.

The situation saw some airlines dominantly control certain routes, limiting passengers’ choices and cutting jobs previously created by multiple airlines at the airports.

It also had cost implications for passengers.

In 2023, a fare from Lagos to any of the second tier airports stood at an average of N65,000, but last year, a one-way economy class ticket from Lagos to any of these destinations jumped to between N100,000 and N300,000.

Olumide Ohunayo, director of research at Zenith Travels, explained that disposable income is one of the factors why fewer Nigerians travel by air, adding that there is a reduction in patronage.

According to Ohunayo, domestic travel is not generally improving for Nigerians but disposable income is not the only reason.

“Many airlines that operate into Calabar do not operate on a daily basis. Air Peace two times a week. Aero, twice a week. It is only Ibom Air that operates every day and with the 50-seater aircraft.

“So, there is still that mismatch between the product we are offering and the airport itself and the positions available. And we cannot continue to expect any miracle because disposable income is not enough. We also need to begin to work on the regulations. And in doing that, we have advocated a new regime of licenses should be done to encourage those other airports,” he said.

Ohunayo said people should be able to go to cities from other cities and state to state and this can only be done by allowing a new set of regulations that would allow smaller aircraft to operate.

Seyi Adewale, chief executive officer of Mainstream Cargo Limited, told BusinessDay that the principal implication of having few airlines fly certain routes is that the airline or airlines will determine the price of airfares on these routes and this is against the overall interest of the passenger.

“No opportunity for price discovery, fair competition, and choice.

“It also implies that if the airline has a technical issue, passengers will be stranded and this will significantly affect their social or business plans or engagements. The airlines, on the other hand, would be happy with this no-competition stance and potentially make ‘supernormal’ profit on these routes,” Adewale said.

He hinted that the sad reality is that there are no quick fixes as aviation generally requires medium to long-term planning.

He said airlines with current Air Operating Certificate (AOC) and Air Transport Licence (ATL) may need to enter into wet-lease agreements with international counterparts with (good fleet) capacity to quickly deploy two to four aircrafts and take advantage of the gap therein.

In addition to the grounding of aircraft, the suspension of Dana Air, a relatively low-cost carrier, which had six aircraft in its fleet, also impacted on the fleet operating the domestic routes.

Routes that Dana Air previously operated saw an increase in ticket costs.

Data obtained by BusinessDay from the NCAA last year showed that 13 domestic airlines operating in Nigeria operate a total of 91 aircraft. This data includes aircraft that have gone on maintenance.

Sources close to the NCAA told BusinessDay that apart from Dana Air that has been grounded, over half of the 91 aircraft have gone on maintenance and some have become grounded, which put a strain on the few operating planes.

Ibrahim Mshelia, CEO of West Link Airlines, stated last year that the dollar scarcity created significant challenges for airlines, as they struggled to secure funds and foreign currency to purchase spare parts and bring their aircraft back into operation.

“Most of their fleets are depleted. So, if the fleet is depleted, then people will choose routes that give them more money or routes that are favourable to operate with available airplanes.

“The injury is the delay in getting parts and dollars to pay for parts. The country has to make deliberate policies. These monies need to be made available to carriers because their operations are time-bound and if they don’t get the money on time, a lot of things happen.

“If airlines can’t find dollars to buy at a favourable rate, then it becomes a problem. It is the system that is creating a monopoly for the operators but not the operators creating the monopoly,” Mshelia explained.