Drawing on data provided by the Federal Aviation Authority of Nigeria, the National Bureau of Statistics (NBS) has released its latest report on air passenger traffic. The report estimates total traffic in 2016 at 15.2 million passengers, representing an increase of 6.3% y/y. Given the macro challenges Nigeria has faced over the past several quarters, the general expectation was for a slowdown in demand for air travel. We assume the y/y pick-up in passenger traffic was partly due to positive base effects.
Domestic air traffic accounted for 72% of the total. We note, however, that the bureau has now included passenger data from four additional airports (Bauchi, Eket, Gombe and Uyo). Combined, these airports accounted for 667,900 passengers in 2016.
Domestic air travel is predominantly for corporate or business purposes. Abuja airport is a recipient of this category of travelers and was recently reopened after a six weeks’ shutdown for runway repairs. Passengers were temporarily diverted to Kaduna airport.
As for international travel, passenger traffic contracted by -2.5% y/y in 2016, compared with a contraction of -9.0% recorded in 2015. The sustained contraction is not surprising, given that international airline operators were hit by fx sourcing challenges.
However in Q3 2016 there was an increase in international passenger traffic to 1.2 million passengers from 1.0 million passengers. Summer vacations fall within the third quarter, so the increase recorded in Q3 could well be due to a seasonal pick-up.
Sources: National Bureau of Statistics (NBS); FBNQuest Research
Fx illiquidity resulted in repatriation challenges for international airline operators. This led to increased air fare tickets and in some cases a reduction in the number of weekly flights (thus adversely affecting air passenger traffic). We assume that airlines are gaining some respite on the back of the CBN’s recent fx interventions.
