Nigeria’s aviation industry has recorded significant growth in recent years, with an increase in the number of aircraft, despite several challenges that have plagued the sector.

While maintaining a growth trajectory, reports reveal that the total number of aircraft in Nigeria has surged by 100% in 8 years, while the country’s number of airports has also increased significantly, currently numbering up to 40.

Speaking on the growth of Nigeria’s aviation sector, Director General and Chief Executive Officer NCAA, Capt. Musa Nuhu while speaking at the Federal Airports Authority of Nigeria (FAAN) National Aviation Conference (FNAC) with the theme: “Sustainability of the Aviation Industry In Nigeria”, stated that despite the challenges the industry has faced in recent years, ranging from regulatory, institutional and structural challenges, especially the breakout of the Covid-19 pandemic, aviation in Nigeria has so far been on a growth trajectory.

Mr. Nuhu further disclosed that when the Buhari administration came on board in 2015, there were only 34 Air Transport Licenses (ATL), but today, the number has increased to 73. He added that commercial certificates were just 196 but skyrocketed to 320 at present. Also, airstrips across the country had moved from 77 to 92, indicating an increase of 15 within the last 8 years.

Investors King understands that the aviation sector in Nigeria is one of the most rewarding for investors. The growing demand for aviation services in the country has encouraged many airlines to establish or plan to establish operations in Nigeria.

In 2022, the industry experienced a lot of developments as it worked to overcome various challenges it faced. A very notable development is the assent of the Civil Aviation Act 2022 by President Muhammadu Buhari.

The president stated that the implementation of the civil aviation act which is a critical aspect of ICAO will further strengthen the sector for improved safety.

Experts have disclosed that the adoption of the Civil Aviation Policy which centered on liberalization and Public Private Partnership (PPP) initiatives by the current administration had resulted in significant growth of the industry, including huge investments in the Nation Airports and has increased capacity of the airports and growth of the domestic airline industry.

They, therefore, emphasized that it is necessary for Nigeria’s aviation sector to remain sound, harmonized, and remain in compliance with the standards and recommended practices in the sector, noting that it is 100 percent regulated and Nigeria must comply with global practices.

Travelling by air from Nigeria to other parts of the world has become significantly more expensive in recent weeks as the International Air Transport Association (IATA) has approved an exchange rate of N634/dollar for flight tickets sold in Nigeria.

This represents a 37.5% increase over the official exchange rate set by the Central Bank of Nigeria (CBN), which is pegged at N461.06/dollar.

This latest increase in the IATA exchange rate has led to a corresponding rise in airfares on the Nigerian route, which is set to worsen the financial burden on travellers ahead of the peak summer travel season.

It has also compounded the existing problem of foreign airlines being unable to repatriate their ticket sale proceeds out of Nigeria, due to a shortage of dollars from the CBN.

To mitigate the impact of blocked funds, international airlines in Nigeria have reportedly closed their low-price ticket inventory, further pushing up airfares.

A few months ago, foreign airlines sold tickets at N444/dollar in line with the CBN official exchange rate. However, in recent weeks, the IATA has reviewed the exchange rate for ticket sale in Nigeria to N462/dollar, N551/dollar, N582/dollar, N610/dollar and currently N634/dollar, even though the CBN official exchange rate has remained around N461/dollar.

While IATA officials justified the exchange rate increases, saying they were in line with the spot rates the CBN has been selling foreign exchange to foreign airlines in Nigeria for the repatriation of their ticket sale proceeds, travellers are likely to feel the pinch of the rising airfares.

Despite the significant increases in the IATA exchange rate, the amount of trapped funds in Nigeria has yet to reduce, according to the report.

As the summer travel season approaches, it remains to be seen how the situation will evolve and whether alternative solutions will emerge to address the challenges facing the aviation industry in Nigeria.

Recent news reports have claimed that foreign airlines in Nigeria are shutting down their operations due to trapped funds. However, new information suggests that these claims are not entirely accurate.

Many airlines have since repatriated their funds from Nigeria, and some have found ways to circumvent the process that stipulates they sell their tickets in Naira.

Despite the high ticket prices in Nigeria, industry experts suggest that foreign airlines are making unprecedented profits from the Nigerian route. Nigerians pay the highest fares for international travel in the African continent, and the demand for air travel remains high. More Nigerians travel than Ghanaians, so tickets are in higher demand in Nigeria.

It’s important to note that while some foreign airlines may be experiencing difficulties, this is not a widespread problem. According to the Group Managing Director and CEO of Finchglow Holdings Limited, foreign airlines cannot stop operating in Nigeria because they are making too much money from the Nigerian route.

There have been suggestions that foreign airlines should be allowed to pay for their services in local currency to aviation agencies, handling companies, and fuel marketers. If this were to happen, the dollar rate would likely never go down.

It’s also worth noting that foreign airlines operating in Nigeria currently have access to three rates: the parallel market, the CBN, and the IEA window. They get these new rates in conjunction with the CBN.

Therefore, claims that foreign airlines are shutting down their operations in Nigeria are not entirely accurate. Many of these airlines have since repatriated their funds, and some have found ways to circumvent the process that stipulates they sell their tickets in Naira.

While there may be some difficulties, foreign airlines cannot stop operating in Nigeria due to the unprecedented profits they are making from the Nigerian route.