Exploring the goldmines in Nigeria’s Aviation sector

Recently, the Federal Airport Authority of Nigeria, (FAAN) undertook the initiative to bring together key stakeholders and investors to dissect and kick start the exploration of the huge potentials in the Nigerian aviation industry. SULEIMAN IDRIS reports.

After four-days of intensive discourse and proffering of solutions to the myriad of challenges confronting and the potentials in the Nigerian aviation industry stakeholders at the Abuja maiden edition of the Federal Airports Authority of Nigeria (FAAN) National Aviation Conference Stakeholders, captains of industries and professionals in the industry and allied sectors agreed that Nigeria cannot afford to sit behind and watch others develop their sector any longer.

Tagged FNAC, with the theme “Advancing the Frontiers of Possibilities for Safe, Secure and Profitable Air Transport,” they affirmed that the time to dig out and explore the gold mines in the sector across airports in the country is now.

A cursory look at the statistics of the state of the Nigerian aviation industry over the years leaves a sour taste in the mouth of ardent followers, stakeholders and the aviation world in general. The general impression is that rather than keep flying like an eagle above others on the African continent, for decades, the industry has tiptoed in slow motion, while smaller nations continue to innovate and evolve their aviation sector to compete in compliance with modern trends and technologies.

What the statistics say

According to statistics by the International Air Transport Association (IATA), Nigeria’s current passengers’ traffic is just 6 million per annum while the industry provides 241,000 jobs for the population with $1.7 billion contributed as Gross Value Added, representing 0.4 percent Gross Domestic Product support to the country’s economy.

More worrisome is the country’s Current Performance Index that shows the industry’s Passenger Facilitation Scores below average at 1.8 out of 10, with Nigeria ranking 127th out of 136 countries on Visa Openness. The country is placed at 69th position out of 136 in the Countries Cost Competitiveness while its Air Trade Facilitation Index (ATFI) and e-Freight Friendliness Index (EFFI) stands at 68th out of 124 and 36th out of 135 countries respectively.

A renewed vigour to turn the industry around

However, hope is not lost as according to the Managing Director of FAAN, Captain Rabiu Hamisu Yadudu, the untapped potentials in the sector, if explored and investment channel into them will see the gloomy statistics turn around for better within a few years. He assured participants that the industry’s projected prospects of achieving an annual passengers traffic of 14.8 m, creating an employment poll of 555, 667 and contribute $4.7 billion to the GDP by 2037 with IATA’s projection of 174 per cent growth within the next 2 decades can be surpass with rapid growth hence FAAN, as managers of the country’s airports decision to organize the conference to serve as a forum ‘’for the exchange of relevant industry information with all critical stakeholders so that all players are guided by the same pool of principles and practices for conformity while guiding investors in making the right investment decision.’’

To underscore the need for proactive steps in tapping the sector’s goldmines, Capt Yadudu affirmed that ‘’…our potential and capacity in the global air transport industry is grossly underutilised. If we are desirous of attaining the status of a major player in the global aviation sphere, this is the time to reposition and move the industry forward. The focus is on Nigeria because we have the largest fleet of aircraft within the sub-region. As at 2021, it was reported that Nigeria lost $2.5 billion (about N1.25trn) in Maintenance, Repair and Overhaul (MRO) investments to neighbouring countries.’’

‘’Having such investments here would have created more employment opportunities for Nigerians, revenue generation and training of technical personnel for maintenance of aircraft. The inter link and value chain between the air transport, tourism and hospitality industry for economic growth cannot be over emphasised. We are blessed in Nigeria by our natural geographical positioning and so, I believe if we can sit together like this, share ideas and intelligence, we can from this meeting develop a workable plan of action that will make Nigeria the next destination for tourism and investment.’’

Also, the Minister of Aviation, Senator Hadi Sirika gave credence that “The aviation sector in Nigeria is a goldmine, with lots of latent potentials waiting to be explored. Our vantage position in terms of regional positioning, population and natural resources has positioned us strategically as a continental leader. The core variables driving air transport are safety and security. Therefore, we must continue to discuss issues that border on these. Also, while we continue to emphasize safety and security, we must operate profitably, so as to achieve efficiency and sustainability.’’

While assuring would be potential investors of the federal government supports, the Minister explained that “On the part of government, our doors are open and we are always willing and ready to discuss business, and partner with investors to bring the desired growth and development to the industry,”

Investment opportunities in the aviation sector

The aviation sub-sector just like the country’s entire transportation sector is in dire need of massive investment in order to attain its potentials and attracts Foreign Direct Investment the nation yearns for. The impact of a well-developed and competitive aviation industry to the economic development of Nigeria can only be imagined.

The country’s air transport industry yearns for investment in both the aviation sector and the civil aerospace sector. Opportunities exist in the airlines sub-sector for passenger carriers, air cargo carriers, airline ticketing and general aviation. Multiple services are in high demand in civil airports, general aviation airports such as handling and catering, freight services, aircraft maintenance, fueling on-site and retails. In the civil aerospace sector lie airframes designs, engines repairs, equipment supplies and off-site maintenance among, aircraft training facilities, development and construction of airport terminals as well as developing tourism in and around the airports.

For his part, the Director, Commercial and Business Development at FAAN, Sadiku Rafindadi, said the 21 airports managed by the agency across the country have a huge but yet untapped market. Rafindadi said “Nigerian aviation market is huge, yet untapped. We plan to fully tap Nigeria’s potential and fully harness the available opportunities within the 21 airports managed by FAAN.’’

“Analysts have forecast that Nigeria’s passenger traffic will exceed that of the global aviation sector, as such, aviation remains pivotal to the socio-economic growth of Nigeria.” He said further.

Opportunities unveiled by FAAN at the investment segment of the conference are in Independent Power Plant (IPP) projects; Agro Allied and Cargo Facilities; Aircraft Maintenance Facilities (Hangars); Amusement parts/Aquarium; Training Schools; In-flight Catering complexes; Horticulture/Flower gardens; Public gallery; Develop surface/ground transportation (Roads and Monorail); Shopping malls; Large Scale farming; Media hub/film village; Bank Pavilion; Equipment leasing and Medical Tourism (hospitals), among others.

Of special mentioned are money spinning opportunities at prime airports like the Murtala Muhammad International Airport in Lagos, the Nnamdi Azikiwe International Airport, Abuja; Mallam Aminu Kano International Airport, and Port Harcourt International Airport, Omagwa where media related investment windows exist in advertisement like special branding on Business Class Lounges; Trolleys; Bus shelter and elevator; Multi-storey car park development.

Allaying stakeholders fears

Industry stakeholders at the conference were however not without fear over the uncertain business and operating climate in the industry with Mr. Allen Onyema, the Vice Chairman of Airline Operators of Nigeria (AON), and Mr. Bashir Ahmed, the Vice Chairman, Aviation Ground Handling Association of Nigeria (AGHAN) voicing the pains of operators and businesses ranging from aviation fuel marketers, airline operators, ground handling companies and catering services among lot go through daily. It was a tale of misfortune and lamentation over skyrocketing foreign exchange, ballooning cost of aviation fuel (Jet A1) multiple charges across board by the different agencies of government in the industry etc thus visiting excruciating pains on businesses.

However, while he acknowledged the seeming challenges, FAAN MD, Capt Yadudu was optimistic that the projected over $14 billion contribution by the sector in the next few years to the country’s GDP should act as an impetus for investors at this trying time. According to the FAAN helmsman, the agency desires it stakeholders to show awareness of the challenges, show understanding, collaboration and cooperation with FAAN as it take the lead to collaborate with all government Ministry, Department and Agencies to prioritise the country’s aviation sector in the national planning, desiring that regulator and operators apply good industry and corporate governance principles as well provide efficient airports, NAVAIDS and weather infrastructures. He also called for operators and regulators to engage the public as partners (On-Board with FAAN) while financial institutions mobilize needed resources with absolute compliance with ICAO and the National Standards for Security and safety rules and regulations.