As Nigeria’s Aviation Sector Looks To Recovery In 2021

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By Roland Ohaeri and Isaac Atoyebi

 

The Aviation industry faces a gloomy period amid COVID-19 pandemic that wreaked havoc on the billion-dollar industry all over the world in 2020. The year 2020 is a year like no other in aviation history, because of the ravaging virus that has cost millions of lives as well. The pandemic still poses a serious threat to the aviation industry in Nigeria as well as elsewhere. But the new year 2021 promises some improvement as more countries are expected to lift the ban on international flights. There is also the hope that governments would adopt measures that allow for safe but easier conduct of air travel to control the spread of COVID-19 and boost economic recovery.

 

According to the African Airlines Association (AFRAA), only about 67.8% of routes had reopened, with African airlines recording very low average load factors of 42.59%. Estimates from the AFRAA connectivity index indicate a 90% drop in connectivity in November 2020 compared to the same period in 2019.

 

Also, the International Air Transport Association (IATA) said in Africa, air transport supported 7.7 million jobs and US$63 billion in economic activity in 2018 while post-COVID, the air transport is estimated to support 3.2 million jobs, with the level of economic activity supported by air transport post-COVID dropping to US$26 billion. It means activities dropped by 58.5% and lost US$10 billion of passenger revenue compared to 2019.

 

The aviation scene in Nigeria is not different; the sector is in difficulty due to the pandemic.

 

According to IATA, the aviation industry in Nigeria contributed nearly 150 billion Naira to the Gross Domestic Product (GDP) pre-COVID-19. But, since Nigeria recorded its first case of COVID-19 on the 27th of February 2020, which eventually led to lockdown and restriction of airspace movement, operators have been battling with very low revenue and recurrent expenses.

 

In the efforts to boost the chances of recovery of the air transport industry in Nigeria, the government supported operators with N5billion, which was shared among airlines and other businesses in the industry such as travel agencies and groundhandlers. However, it is obvious that the bailout will not address  the challenges facing the industry, as Chairman Senate Committee on Aviation, Senator Smart Adeyemi, believes more money should be given to the industry as palliatives because of the magnitude of the challenge posed by the pandemic.

 

The industry and government need to work more closely to deal with aviation industry challenges. Aside from giving financial support to the sector, the government needs to address long-standing issues that have created significant drawbacks for the industry pre-COVID-19.

 

Issues like multiple taxes, poor management by some operators, deteriorating facilities, inadequate security and low deployment of technology at most airports are some of the areas that need improvement.

 

Cooperation among Nigerian airlines will also be an essential factor for the airline industry to recover quicker. The lack of cold chain facilities in Nigeria has to be addressed, as it may make the distribution of vaccines less efficient.

 

In anticipation of recovery, some new airlines are warming up to start operations in Nigeria. Recently, United Nigeria airlines performed demonstration flights to show their eagerness to participate in the domestic market. Other new carriers in the process of completing their regulatory requirements have continued to announce efforts to get reliable fleets and human resources.

 

Current airlines in Nigeria have also announced plans to re-open routes closed largely by the pandemic. The optimism towards recovery is evident among Nigerian airlines, though the rising cases of the COVID-19 pandemic creates cautious optimism.

 

Few Nigerian airlines such as Air Peace conduct regional operations to equally limited destinations. As more airlines join the domestic market in Nigeria and if the pandemic reduces in impact, more Nigerian airlines could fly into regional routes.

 

However, Nigeria’s economic recovery and air transport recovery is supported by airlines like Overland Airways which has adopted recommended international health protocols, to ensure the steady movement of business operators, traders and other air travellers to various cities. This has kept remote economies connected to hub cities such as Abuja and Lagos. Overland Airways has continued to offer efficient scheduled and charter services and applauded as an epitome of Africa’s airline of the future.

 

If they start operation, the expected new airlines would participate in the Single African Air Transport Market (SAATM) and the African Continental Free Trade Area (AfCFTA), which are flagship projects of the African Union Agenda 2063 that Nigeria should benefit immensely from.

 

The pandemic also presents Nigerian airlines and aviation businesses the opportunity to readjust their business models, embrace new technologies, build resilience and emerge stronger. Apart from the airlines, travel agencies in Nigeria who still face difficulties due to lock-downs in markets globally especially in Europe, have been urged to diversify their business.

 

The New Year comes with opportunities for the aviation industry to re-strategize and adapt to the COVID-19 era. The recovery from the pandemic will not be easy, but with concerted actions the industry will come out better. So, operators should begin to look for opportunities for partnerships and collaborations at all levels going into 2021 and beyond.

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