Players in the air transport eco- system have called on the Federal Government to align with the current aviation agenda with previous roadmaps to bolster the growth of the value chain.
The experts also canvassed consistency in policy implementation as a key driver to accelerate growth in the sector, urging the government to push for intervention that will bring about stability in the foreign exchange market in order to create special access for industry players.
Speaking in separate interviews, the former Managing Director of the Federal Airports Authority of Nigeria (FAAN) and Co- Chairman of Nigeria Aviation Award, Dr. Richard Aisuebeogun and Principal Managing Partner, Avaero Capital Partners, Sindy Foster said without providing direct support through tax incentives, waivers, and consistent policies aimed at improving air transportation infrastructure, the Federal Government’s ambition to utilise the aviation sector as a catalyst for economic growth, may be elusive.
Aisuebeogun said though the sector was going through a growth transition, he, however, affirmed the urgent need to fix institutional funding challenges , prescribing the capitalisation of Nigeria’s aviation leasing company and the exploration of structured funding instruments like a sector-specific bank.
The aviation professional reiterated his full support for the proposed comprehensive annual review and industry outlook, calling for industry-wide collaboration to produce an inclusive and insightful document that will serve as a vital tool for planning and development.
While revealing plans to institute a comprehensive annual industry appraisal, mirroring the structure and impact of the Nigeria Economic Summit and reports from global bodies like IATA and ACI, Aisuebeogun said the initiative will establish an institutional framework for the sector’s development, fostering data-driven planning and growth.
He said: “The year witnessed positive developments across several fronts, signaling a foundation for accelerated expansion.
“A significant achievement was the restoration of international confidence, largely due to the government’s decisive action in resolving the substantial debt owed to foreign airlines.
“The regulatory environment also saw positive shifts, with the NCAA initiating reviews of critical procedures to enhance technical and economic oversight.
The confirmation of a substantive Director-General for the NCAA is expected to bring stability and bolster the authority’s capacity to ensure airworthiness and safety. Furthermore, the NCAA’s intensified focus on consumer protection, addressing issues like high fares and flight disruptions, aims to rebuild passenger trust.
Fleet modernisation and route expansion were other notable positives in 2024. Domestic airlines like Air Peace, Ibom Air, and Overland Airways continued their fleet renewal programmes with new aircraft acquisitions.
A significant breakthrough was the Federal Government meeting the conditions of the Cape Town Convention, removing Nigeria from the blacklist of aircraft leasing risk countries. This opens doors for more affordable long-term financing for aircraft acquisition.
“Simultaneously, airlines actively expanded their domestic and regional networks, with new airports emerging and innovative partnerships between state governments and airlines taking shape to improve connectivity.
“The unmanned aviation sector also gained prominence, marked by increased participation in drone activities and the NCAA’s release of regulations for drone operations, signaling the emergence of a new frontier in Nigeria’s aviation landscape.
“However, the year was not without its hurdles. Infrastructure development continued to face challenges due to the economic recession and currency devaluation, resulting in the delayed implementation of projects.”
Looking ahead to 2025, Dr. Aisuebeogun outlined several key factors expected to shape the industry.
“The government’s commitment to facilitating aircraft acquisition and access to international credit will be crucial. The anticipated commencement of airport concessions is expected to attract private sector investment, leading to improved infrastructure and passenger experiences.”
But, Foster expressed worry over the dip in passenger figures in the last one year, affirming that such data paints a stark picture.
She said: “Nigeria recorded 15.68 million passenger movements in 2024, falling short of the previous year’s 15.69 million. More concerning is the drop from 2022’s peak of 16.17 million.This downward trajectory stands in sharp contrast to our continental neighbours and global peers.”
Offering a comparative study, Foster said Egypt welcomed 24.05 million passengers in 2024, a 9.1 percent increase from 2023, whereas South Africa handled 25.68 million passengers, growing seven per cent year-over-year.
She said Kenya’s traffic surged 15 per cent, while Brazil recorded 120 million passengers in 2024, and Indonesia’s passenger numbers jumped by over 5.6 per cent.
“Nigeria maintains its position as Africa’s largest economy by GDP, yet this economic heft doesn’t translate to the aviation sector’s performance. While economic challenges exist across all the countries mentioned, they’ve managed to insulate and even grow their aviation sectors despite these headwinds.”
“The first misconception we must dispel is that GDP size, population size or growth rates determine aviation sector health.
“It doesn’t. Aviation thrives on a complex ecosystem of factors: regulatory environment, infrastructure quality, airline competition, currency stability, tourism appeal, and business travel demand. Nigeria struggles across multiple dimensions of this ecosystem.
“Consider currency stability. While the Brazilian real, South African rand, and Egyptian pound have faced challenges, none have experienced the extreme volatility of the naira in recent years. Airlines operate on thin margins with significant foreign currency exposure for aircraft leasing, maintenance, and fuel. “Currency instability creates pricing challenges that ultimately suppress demand.
“Countries experiencing aviation growth have implemented deliberate policy frameworks that Nigeria has yet to adopt effectively. Brazil’s aviation sector benefited from regulatory reforms that increased competition and lowered fares. “Indonesia’s government prioritized aviation infrastructure as part of its economic development strategy, recognizing air connectivity as essential for an archipelago nation.
“Egypt has leveraged tourism as a key driver for aviation growth, with policies specifically designed to increase visitor numbers.The country invested heavily in airport infrastructure and marketing campaigns to position itself as a premier destination. Tourism contributes approximately 12 percent to Egypt’s GDP, creating a natural demand pool for aviation services,”, she surmised.
She said Kenya Airways and Ethiopian Airlines have built successful hub-and-spoke models connecting Africa to global destinations, supported by government policies that recognize these airlines as strategic national assets. The Kenyan government has implemented visa reforms and destination marketing that drive tourism and business travel.
But, Nigeria’s aviation policy environment, the expert said by contrast, has been characterized by inconsistency and fragmentation, multiple agencies with overlapping mandates create regulatory complexity.
Foster listed other challenges erecting a roadblock to the growth of aviation to include, policy reversals and sudden changes creating uncertainty for investors and operators alike.
She said: “Airport infrastructure quality directly impacts passenger experience and operational efficiency. Brazil invested heavily in airport modernization ahead of the 2014 World Cup and 2016 Olympics, with many facilities now operated by private concessionaires under performance contracts.
“South Africa’s airports rank among Africa’s best, benefiting from significant upgrades for the 2010 World Cup.
“Indonesia launched an ambitious airport development program to support its archipelago geography, recognizing that air travel is essential for economic integration across its 17,000 islands.
“The country has focused on building and upgrading regional airports to improve domestic connectivity.
“Nigeria’s airport infrastructure, despite some improvements, continues to lag. The new terminal at Lagos’s Murtala Muhammed International Airport represents progress, but many regional airports remain substandard. Power outages, inadequate facilities, and operational inefficiencies persist across the network.
“Infrastructure development requires sustained investment and long-term planning. Countries showing aviation growth have treated airport development as a national priority with dedicated funding mechanisms. Nigeria’s approach has been more piecemeal, with projects often delayed by funding gaps and changing priorities.
“Compared to peers like Egypt and Kenya, Nigeria’s government and private sector have under invested in aviation infrastructure, digitization, and skills development.The country suffers from insufficient incentives for private sector airline growth and innovation.
“Nigeria has seen multiple airline failures over the past decade. The operating environment remains challenging, with high costs for fuel, maintenance, and financing. The collapse of Air Nigeria, Arik Air’s receivership, and other airline failures have reduced capacity and competition in the market, despite smaller new entrants to the market.
“Successful aviation markets typically feature a mix of full-service and low-cost carriers serving different market segments. Nigeria’s airline ecosystem lacks this diversity, with most carriers operating similar business models and similar routes, targeting the same customer segments – against a dysfunctional, unstrategic backdrop.
“Many domestic routes are underserved or lack adequate frequency. Nigeria lacks robust hub development to effectively compete regionally with countries like South Africa – Cape Town and Jo’Burg – or Kenya – Nairobi. Insufficient intermodal transport connections render air travel less convenient and more costly.
“Flight delays, cancellations, and inconsistent service erode trust. Refund processes are often lengthy or denied, reducing passenger willingness to book in advance. Ticket prices are perceived as unaffordable relative to average income, particularly for domestic travel.
“Although safety has improved, Nigeria still battles with a perception issue globally. High insurance premiums for Nigerian-registered aircraft drive up operational costs.
“Most of Nigeria’s over 30 airports operate significantly below capacity. Without an established Maintenance, Repair, Overhaul hub, the majority of aircraft servicing must be conducted overseas, substantially increasing both downtime and expenses.
“Nigeria’s tourism potential remains largely untapped. Despite rich cultural heritage, diverse landscapes, and vibrant cities, the country attracted fewer than 1.5 million international visitors pre-pandemic. Security concerns, visa complexities, and limited destination marketing have constrained growth in this sector.
“Nigeria, despite its economic size, has struggled to position itself as West Africa’s business hub. Infrastructure deficiencies, security challenges, and regulatory complexities have limited its appeal for regional headquarters and business events.
“Aviation is inherently dollarized. Aircraft, parts, maintenance services, and even training often require foreign currency payments. Countries with more stable currencies and foreign exchange policies create more predictable operating environments for airlines.
“Nigeria’s foreign exchange challenges have created significant headwinds for the aviation sector. Airlines have faced difficulties repatriating funds, leading some international carriers to reduce capacity or withdraw entirely in the past. “The naira’s volatility makes pricing challenging and creates financial uncertainty for operators.
“Countries showing aviation growth have generally maintained more consistent monetary policies and worked to ensure foreign exchange availability for strategic sectors like aviation. Egypt, despite currency challenges, implemented mechanisms to ensure airlines could repatriate funds. Brazil maintained relatively open foreign exchange markets even during economic difficulties.”
She identified lack of a clear, long-term aviation master plan as part of the obstacles hampering progress in the Nigerian aviation sector in addition to inconsistent government support.
Foster said: “National carrier ambitions have seen reversals, litigation, and unclear partnerships, which have disrupted market confidence. Regulatory bodies sometimes act more as revenue generators than facilitators, which affects ease of doing business in the sector.”
Notwithstanding the challenges, Foster said Nigeria’s aviation sector has immense potential with its over 200 million people, the largest economy in Africa, and significant diaspora communities worldwide.
She said the fundamentals for a thriving aviation market to unlock this potential requires deliberate policy choices and strategic investments.
“First, regulatory reform must create a more conducive operating environment. Streamlining the multiple agencies overseeing aviation would reduce compliance costs and improve efficiency. Consistent, transparent policies would attract investment and enable longer-term planning by operators.
“Second, infrastructure development needs prioritization and funding. Public-private partnerships have proven successful in Brazil and elsewhere for airport development.
“Nigeria could adopt similar models to upgrade its airport network without straining public finances. But the template must be right, 80 year concessions with inexperienced concessionaires is not likely to produce the desired results.
“Third, airline ecosystem development requires attention. Policies that reduce operating costs, improve access to financing, and enable different business models would foster a more diverse and resilient airline sector. Supporting the development of a strong flag carrier while enabling low-cost competition would serve different market segments.
“Fourth, tourism development represents a significant opportunity. Cheaper and more simplified visa processes, destination marketing, and security improvements could unlock Nigeria’s tourism potential, creating natural demand for aviation services.
“Finally, monetary policy stability is essential. Creating mechanisms to ensure airlines can access foreign exchange and repatriate funds would improve the sector’s financial sustainability and attract international carriers, and enable indigenous airlines to operate more efficiently.
“The passenger statistics cited at the beginning tell a story beyond mere numbers. They reflect economic potential either realized or squandered. They indicate connectivity that either enables or constrains business opportunities. They represent jobs created or lost in one of the world’s most dynamic industries.
“Countries showing aviation growth have recognized air connectivity as a strategic economic asset rather than merely a transport mode. They’ve implemented policies that enable growth despite broader economic challenges. “They’ve invested in infrastructure that facilitates efficient operations. They’ve created conditions where airlines can operate profitably and sustainably.
Nigeria has the potential to join them. The country’s size, population, and economic fundamentals provide a strong foundation for aviation growth. Realizing this potential requires policy choices that prioritize long-term sector development over short-term considerations.
“The question isn’t whether Nigeria can develop a thriving aviation sector comparable to its peers. The question is whether it will make the choices necessary to do so. The data shows what’s possible when countries prioritize aviation development. The opportunity awaits.”
SOURCE: THENATION
