Drawing on data provided by the Federal Airports Authority of Nigeria, the National Bureau of Statistics (NBS) has released its latest report on air passenger traffic. The report estimates total traffic in 2018 at 17.2 million passengers, representing an increase of 19% y/y.
The economy is performing relatively better when compared to three years ago. However, household wallets are not fully re-built; as such, purchasing power has not picked up, broadly speaking.
- According to the report, 74% of the total air passengers in 2018 were domestic travellers. Air passenger traffic within Nigeria is generally skewed towards business travel as opposed to leisure. Last year, passenger traffic for domestic travel grew by 23% y/y to 12.8 million passengers.
- The cost of domestic air travel has picked up considerably over the past four years. The price of a return ticket for one of the frequent routes (Lagos- Abuja) on the two most favoured airlines is about N50, 000 (US$139) – double the fare a few years ago.
- Air travel is regarded as a luxury item on spending priority lists for most consumers. Last year the FGN announced the removal of 5% VAT on domestic air transport to make air travel more affordable. However, this is yet to be implemented. As such, road transportation (which is a significantly cheaper option) is likely to remain the preferred mode of transportation for most Nigerians.
Air passenger traffic (total arrivals and departures; ‘000s)
Sources: NBS; FBNQuest Capital Research
- As for international travel, air passenger traffic grew by 9% y/y during the period under review. Passenger traffic was highest in August, September and December – that is, during holiday months. High patronage on international flights during the off-holiday season was linked to business travel.
- The national accounts show that air transport grew by 21% y/y but accounted for just 8% of total transport GDP in 2018.
FBN QUEST NIGERIA
