Capacity gaps shut local airlines out of N8trn market

Local airlines are missing out on over N8 trillion international air passenger market due to capacity gaps.

According to Nigerian data from the Nigeria Civil Aviation Authority (NCAA), 4,135,830 passengers travelled inbound and outbound in 2024, riding on the wings of 30 international airlines, which operated a total of 14,359 flights.

Among over 13 local airlines operating in Nigeria, only Air Peace, Ibom Air, Max Air, ValueJet, and Overland accounted for approximately 6.89 percent of the total passengers and 14.75 percent of the total flights, with 285,023 passengers and 2,118 flights.

BusinessDay’s findings show that apart from West African countries, Air Peace operates to Dubia, Johannesburg, China, Mumbai, Tel Aviv, Jeddah and London. However, London is the only current active destination operated by the airline at the moment.

Other local airlines operate few West African countries, but some are skeletal operations and few seasonal hajj-bound flights.

“First, our local airlines need to acquire long-haul aircraft with superb fuel efficiency to play in the international market,” Seyi Adewale, CEO of Mainstream Cargo Limited, said.

“Old aircrafts consume a lot of aviation fuel. They also need a large fleet of aircraft in order to manage aircraft on ground (AOG) and complex route schedules,” he noted.

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The Single African Air Transport Market (SAATM), which Nigeria is signatory to, has seen African airlines establish presence in Nigeria to take advantage of the nation’s geographical location and opportunities inherent in full implementation of the African Continental Free Trade Area (AfCFTA).

Data show local airlines continue to miss out on the international market as more African carriers such as Air Sierra Leone, Air Algerie and South African airlines continue to increase operations into Nigeria to tap opportunities.

According to Adewale, “Nigeria does not have a hub whereby aircraft parts are stored, sourced and sold. This is also related to the fact that we do not have maintenance, repair, and overhaul centres that can handle such long-haul aircrafts.”

Adewale also wondered where or how local airlines would get passenger feeds from to ensure good load factor, considering that the market is already very competitive.

He expressed concerns over whether Nigerian banks can finance a large fleet required to operate long-haul flights and cash advances for operations till airlines break even.

“There needs to be a massive and overarching national policy on aviation to address these issues. This should be a long-term plan and concerted national strategy. For example, the federal government must directly invest in aviation infrastructure, especially on the construction of maintenance facilities. The government must also create juicy incentives to attract the kind of huge capital and investors needed to facilitate the procurement and leasing of the long haul aircrafts,” Adewale said.

Qatar Air, Ethiopian Air lead the pack

Among the 4,135,830 international air passengers processed from Nigeria in 2024, Qatar Air led the pack with 531,086 passengers, accounting for 12.84 percent of the total traffic. They operated 1,375 flights, making up 9.57 percent of the total 14,359 flights.

Close on Qatar’s heels was Ethiopian Air, with 460,444 passengers (11.13 percent of the total) and 1,197 flights (8.33 percent of the total). British Airways followed with 320,643 passengers (7.75 percent of the total) and 711 flights (4.95 percent of the total).

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Air Peace operated 1,618 trips, which accounted for 11.27 percent of the total flights, and carried 247,893 passengers (5.99 percent of the total).

Others included: Air France – 254,054 passengers (6.14 percent) and 544 flights (3.79 percent); Lufthansa – 248,617 passengers (6.01 percent) and 668 flights (4.65 percent); Turkish Airline – 239,371 passengers (5.79 percent) and 582 flights (4.05 percent); Virgin Atlantic – 218,254 passengers (5.28 percent) and 362 flights (2.52 percent); Egypt Air – 215,316 passengers (5.21 percent) and 820 flights (5.71 percent); Asky – 172,523 passengers (4.17 percent) and 889 flights (6.19 percent).

Delta Airlines had 160,399 passengers (3.88 percent) and 390 flights (2.72 percent); KLM – 158,321 passengers (3.83 percent) and 313 flights (2.18 percent); Royal Air Maroc – 132,654 passengers (3.21 percent) and 473 flights (3.29 percent).

More so, Air Cote D’Ivoire had 122,535 passengers (2.96 percent) and 750 flights (5.22 percent); Kenya Airways – 115,426 passengers (2.79 percent) and 422 flights (2.94 percent); RwandAir – 90,367 passengers (2.18 percent) and 385 flights (2.68 percent); and Africa World – 83,513 passengers (2.02 percent) and 1,198 flights (8.34 percent).

On the lower end of the spectrum, airlines like Max Air, Cronos, Neon, ValueJet, and Overland operated fewer flights and carried fewer passengers. Other Nigerian airlines that operated included: Ibom Air with 26,364 passengers (0.64 percent) and 469 flights (3.27 percent); Max Air with 9,998 passengers (0.24 percent) and 24 flights (0.17 percent); Value Jet with 480 passengers (0.01 percent) and 4 flights (0.03 percent); and Overland with 288 passengers (0.01 percent) and three flights (0.02 percent).

No flag carriers

“We do not have a national carrier and have refused to have national designated flag carriers with the full support of the government. Geographically, we are well placed to be the hub to Europe and the US for the east, central and South Africa, including the weak West African regional countries,” John Ojikutu, industry expert and CEO of Centurion Aviation Security and Safety Consult, told BusinessDay.

Ojikutu said to get into the market, the airlines must be regulated to merge into two flag carriers – one regional and continental and the other intercontinental.

According to him, 50/60 percent of the shares will be devoted to them, while 15/20 percent will be for the federal government and the 36 states but the rest 20/35 percent will be made available to the public through the capital markets.

“Secondly, none of the foreign airlines must be allowed to operate into Lagos and Abuja together but only to Abuja or Lagos and to another airport in the alternative geographical area to the airport of their first choice. We need to do what the US has done by discarding the concept of a national carrier, which in our environment, is a government carrier. This is what killed the first airlines of the continent,” he said.

Alex Nwuba, president, Aircraft Owners and Pilots Association of Nigeria, said Nigerian airlines already have a lot to contend with, noting that the domestic market still has major gaps that need to be filled.

“Venturing far is not a major priority at the moment. If they do, they know that they will find themselves at a serious disadvantage due to high operating costs,” Nwuba, who was the chief executive officer of Associated Airlines, said.

He stressed that while factors required aren’t available at this time, including government support, there should be modifications to the country’s airports to enable transit operations.