Thursday, May 5, 2016 9:07AM/FBNQuest Research
The prevailing macro challenges have driven a fall in air passenger traffic. This was most marked for international flights as many foreign airlines are suffering from a remittance backlog and have therefore hiked their ticket prices.
Drawing on data provided by the Federal Aviation Authority of Nigeria, the National Bureau of Statistics (NBS) has released its latest quarterly report on air passenger traffic.
This data cover arrivals and departures for both domestic and international flights. The report estimates total traffic in Q4 2015 at 3.8 million passengers, representing a decline of 9% y/y.
The general decline in traffic is a reflection of the slowdown in consumers’ purchasing power and therefore the broader economy. GDP growth slowed to 2.1% y/y in Q4 2015.
Furthermore, the total number of international passengers declined by 11% to 1.1 million passengers in Q4. Carriers have increased their fares and, to cut their travel expenses, passengers are now opting for longer travel routes out of Lagos.
As for domestic airport activities, Lagos remained the busiest accounting for 36% of total air traffic while Abuja landed the second spot in terms of contribution accounting for 34%. Other domestic airports such as Port Harcourt, Owerri and Kano represented 11%, 4% and 2% of the total respectively.
Lagos is the business hub of the country; as such there are no surprises in its contribution to total air traffic in Q4. Owerri serves as a landing point for most cities in the Eastern region; this explains the traffic of 108,000 passengers it recorded in the same quarter.
Based on anecdotal evidence, most Nigerians are travelling on business trips as opposed to leisure. A pick-up in economic activity would have a ripple effect across the economy including a boost to consumers’ purchasing power. However, this appears unlikely before Q4 2016 at the earliest. A rapid passage of the budget would help.