Friday, June 26, 2015 9:00AM / FBN Capital Research
Considering the size of Nigeria, the poor condition of most roads and its underdeveloped railway system, air travel is relatively unavoidable. Drawing on data provided by the Federal Aviation Authority of Nigeria (FAAN), the NBS has released its latest quarterly report on air passenger traffic. This data cover arrivals and departures for both domestic and international flights. Total traffic in Q1 2015 was estimated at 3.7 million passengers, representing an increase of 9% y/y and a decline of 11% q/q.
Such a decline on a quarterly basis is consistent with the end of the holiday season in Q4.
Unsurprisingly, Lagos and Abuja had the highest number of passengers in Q1, accounting for 43% and 39% of total air traffic respectively.
Earlier this month, the International Civil Aviation Organisation began security auditing across the country to ensure that each airport meets its standards. The audits cover the regulatory framework, quality control functions and airport operations.
The local media reports that Benin airport is shutting down for one month for repairs and maintenance. The NBS data show that 228,000 passengers passed through Benin in 2014, equivalent to just 1.5% of total air traffic.
There have been suggestions that the FGN may divest at least 51% ownership of the FAAN. In other countries, mostly developed, increased private-sector participation has helped to turnaround the management and finances of airports. At this point, it is unclear whether FAAN is marketable and would attract investors.