Demand constraints on air transport

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 Q2 2018 at 3.7 million passengers, representing an increase of 15.2% y/y and a decline of -5.0% q/q. The economy is performing relatively better when compared to two years ago. However, consumer demand remains soft as purchasing power has generally not picked up.

·         For Q2, passenger traffic on arrivals accounted for 50.2% of total domestic air travel. However, departures outweighed arrivals for international air travel, accounting for 51.4% of the total.

·         According to the report, 73% of total air passengers in Q2 were domestic travellers. There was an increase in passenger traffic of 18% y/y but a decline of -4.5% q/q for domestic travel.

·         Over the past two years, domestic airlines have increased air ticket fares significantly. For instance, the price of a return ticket for one of the frequent routes (Lagos – Abuja) has soared by as high as c.70% y/y on the two most favoured airlines.

·         For most consumers, air travel is a luxury item on their spending priority list. Therefore, to adjust to current realities and be more cost-conscious, road transportation is likely to see increased demand.


Air passenger traffic (total arrivals and departures; ‘000s)

Sources: National Bureau of Statistics (NBS); FBNQuest Capital Research


  • As for international travel, air passenger traffic contracted by -6% q/q and grew marginally by 8% y/y. Our channel checks confirm that high patronage on international flights come from business travel. As for leisure, there is usually a pickup in passenger traffic in Q3 due to summer vacation. However, we do note that local tourism has picked up over the past year.
  • The national accounts for Q2 2018 show that air transport grew by 24% y/y but accounted for just 7% of total transport GDP.









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