The Nigerian Aviation Sector Records N146.6bn Output in 9M 2021

Proshare

Friday December 31, 2021 / 11:34 AM / by CSL Research / Header Image Credit: Ripples

 

Based on a Punch news report, between January and September this year, output in the aviation sector rose to N146.6bn from N114.2bn recorded in the corresponding period of 2020. The relaxation of travel restrictions occasioned by the COVID-19 pandemic and increased economic activities during the year drove recovery in the aviation sector in the first nine months of 2021. The National Bureau of Statistics classifies aviation or air transport as one of the sub-sectors under the transport and storage sector. Road transport, rail transport, water transport, transport services and post and courier services are the remaining five. During the review period, the contribution of the transport and storage sector to the GDP stood at N2.4tn, which was driven by the economic performance of road transportation (N2.2tn), air transport (N146.6bn) and transport services (N62.4bn).

 

The aviation sector was one of the worst-hit sectors by the pandemic derailing the interesting prospects posed by the sector. In 2019, the sector was the fastest-growing sector in the country, surging higher by 13.2% y/y. However, the sector dipped in Q2 2020, down 57.4%. In Q3 2020, the sector again contracted by a staggering 38.9%. Surprisingly, monetary and fiscal policymakers did not appear to be overly concerned with the struggles of the sector, despite its systemic importance to economic activities in the country. However, following pressures from stakeholders as well as the legislative arm, the Federal Government finally approved a N4.0bn bailout fund for airlines at the beginning of November 2020. The sector returned to growth in Q2 and Q3 2021, up 4.98% and 33.3%, respectively.

 

Barring any new obstacles from the emergence of the Omicron variant, we believe the aviation sector is set for growth. In our opinion, while the aviation sector does not contribute a huge percentage to overall GDP, we note it has systemic importance for the conduct of trade and other economic activities in the country. Thus, we think the FG may need to support the sector more as it gets out of the deep recession it sank into. Only recently, the Minister of Aviation, Hadi Sirika, announced that the country's delayed national air carrier, Nigeria Air, is planned to launch on or before April 2022. The proposed airline was initially planned to begin in 2018 but plans stalled. We believe the launch and smooth running of the airline will also be a boost to the aviation sector.


Proshare Nigeria Pvt. Ltd.


Proshare Nigeria Pvt. Ltd.

 

Related News

  1. UAE Writes Nigeria's Aviation Minister Over Emirates Airline Ministerial Approval Withdrawal
  2. Nigeria Air: Bringing Nigeria Closer to the World, but is it Time?
  3. Ethiopian Partners with Industrial Development Corporation in Launching of Zambia Airways
  4. Ethiopian Airlines, Boeing Sign MOU for B787 Landing Gear Exchange
  5. Modest Pick-up in Domestic Air Traffic in Q2 2021
  6. 1.38m Passengers Arrived Across All Nigerian Airports in Q2 2021 - NBS
  7. Average Fare Paid for Bus Journey Increased by 4.98% MoM in August 2021 - NBS
  8. 563,385 Passengers Travelled Via Rail in Q2 2021 - NBS
  9. Ethiopian Unveils Convenient Digital Options to Economy Travelers
  10. Average Fare Paid by Commuters for Intercity Journey Increased by 0.81% MoM in July 2021 - NBS
  11. Average Fare Paid for Bus Journey Increased by 2.80% MoM in June 2021 - NBS
  12. Average Fare Paid by Passengers for Water Transport Increased by 0.99% MoM to N828.35 in May 2021


Proshare Nigeria Pvt. Ltd.

READ MORE:
Related News
SCROLL TO TOP