Nigeria’s aviation industry may not recover until Q1 2022 ~Sirika
By Oludare Mayowa
Recovery in the nation’s aviation sector may lag and take up to two years as the industry continue to experience decline revenue in spite of the reopening of operations, Nigeria’s minister of aviation has said.
“I think until quarter four of 2021 and perhaps quarter one of 2022, we will continue to see sharp decline in passengers and that is directly proportional to the revenue that we collect because people’s confidence has to be raised,” Hadi Sirika said.
“They have to begin to want to fly again and certain factors that encourage propensity to fly are also being eroded during this period,” the minister said while interacting with Nigerian lawmakers in Abuja.
He said the sector is in difficult and challenging times as a result of the impact of coronavirus pandemic on the industry.
“We are not in the business of selling phones that we can still sell and get the required revenue. The revenue for yesterday is lost. Therefore, we are hugely impacted by the COVID,” He said.
According to him, many advanced countries are spending huge resources to kick start and support civil aviation businesses after the reopening of airspace and commencement of operations.
He, however, said Nigeria has not been able to respond to civil aviation requests and civil aviation funding like other countries have done as a result of economic downturn.
He said in response to the challenges in the sector, the government is planning to concession some of the country’s airports to generate more revenue and ease the pressure on government funding.
According to him, his ministry has concluded the business outline and intends to go ahead with the procurement of the concession of the airports.
“If government is not able to fund us because of the challenge of income, then government should not take the little we have. Every single agency in civil aviation is so critical that we need to fund it and because we understand the nature of this business, that was why we have now introduced the concession of our airports.
“We have now done the outline business case, we are now going ahead for the procurement to concession this airport.
He said the reason the government chose concession over privatization of the airports “is simple and that is because this government, the APC administration, is social democratic in nature, it does not want to sell national assets.
“It wants to keep the assets with the people but we can concession them and improve them to make them better. We are very sure that when we do that, we will improve the revenue of the nation.”
Last month, a report by the Federal Aviation Authority of Nigeria (FAAN) showed that only three of Nigeria’s airports have the financial capacity to sustain their operations, the rest are run at a loss.
The report showed that the country’s Airports Authority reported N44.39 billion losses in 3-year due to the non-profitability of some airports.
The losses according to a report were incurred in the operations of 17 airports across the country as lack of sufficient traffic, huge overhead and maintenance cost dominated expenditures.
However, three of the country’s airport, Murtala Muhammed International Airport (MMIA), Lagos, Nnamdi Azikiwe International Airport (NAIA), Abuja, and Port Harcourt International Airport (PHIA), Omagwa, Rivers State have been adjudged to generate sufficient revenues to sustain their operations between 2017 and 2019.
The International Air Transport Association (IATA) had stated in a recent report that for an airport to be viable and self-sustaining, it must have, at least, five million passengers a year.
But most Nigerian airports, sited in some states are underutilized as a result of low passenger carriage and huge overhead outlay.