Air traffic improves amid zero profit margin for operators
• IATA harps on infrastructure, air connectivity
Local airlines in Nigeria and others on the African continent have consistently recorded steady rise in passenger traffic, with the latest surge put at 9.9 per cent for June 2017.
The International Air Transport Association (IATA), in its monthly global passenger traffic data attributed the traffic peak to sharp rise in business confidence in Nigeria as South Africa’s economy fell into recession in the first quarter.
Improvement in traffic notwithstanding, the airlines have continued to run on zero profit margin for at least seven years on the bounce. Hence, IATA’s delegation during a recent visit to Lagos, has canvassed for improved investment in infrastructure and air connectivity to help the airlines make the most of their potential to maximal benefit.
Also in June, capacity of the airlines rose by 7.1 per cent, and load factor jumped 1.7 percentage points to 64.3 per cent, although this still was the lowest among regions.
For the first six months of 2017, the industry experienced a 12-year high in traffic growth (7.9 per cent) and a record first half load factor of 80.7 per cent.IATA’s Director General and Chief Executive Officer, Alexandre de Juniac, noted that a brighter economic picture and lower airfares are keeping demand for travel strong, adding that as costs rise, “this stimulus of lower fares is likely to fade.” de Junaic said: “This is all good news. The demand for travel is strong and that, in turn, will make a positive contribution to the global economy. This growth will also further expose infrastructure deficiencies.
“In every part of the world, airport and air navigation infrastructure are struggling to cope with demand. There are plenty of examples linking connectivity and economic prosperity. But few governments have been able to deliver on the imperatives of sufficient capacity, quality aligned with user needs and affordability. This year’s strong growth is a reminder that there is no time to lose.”
IATA’s Regional Vice President for the Middle East and Africa, and leader of the delegation to Nigeria, Muhammad Ali Albakri, reiterated the benefit of job creation and additional economic growth in Nigeria, if the West African nation used the transformative power of aviation as a strategic pillar to further strengthen and enhance its economic recovery and national development.
Ali Albakri, in a series of high-level meetings in Lagos with stakeholders across the Nigerian aviation value chain, said: “Air transport in Nigeria supports more than 650,800 jobs including tourism-related employment, while contributing $8.2 billion (N2.5 trillion) to the country‘s GDP.
“Over the next 10 years, passenger volumes are forecast to grow more than seven per cent annually, exceeding the global average by a healthy margin. For Nigeria this means an additional 7.9 million passengers will take to the sky every year, creating significant opportunity to accelerate economic growth, boost prosperity and support development,” said Albakri.
He said further that despite significant investment in Nigeria’s aviation sector, the country’s air transport infrastructure still ranks low among African states. “IATA recognizes and supports the positive developments by the government on infrastructure and aviation processes, urging continued adherence to international best practices and an optimal regulatory environment.
Now that the country is emerging from recession, aviation can unlock the enormous economic potential that exists within Nigeria. “We encourage the government to continue to promote aviation for its role as a catalyst and socioeconomic enabler for the country, and to promote stronger connectivity within Nigeria and its neighbouring African countries. In addition, now is the time to continue to invest in modern and efficient infrastructure to accommodate the future traffic growth
that will occur,” he said.
Regional Head, Member and External Relations, Africa and Middle East, Adefunke Adeyemi, hinted that the last time an African airline made profit was in 2010.Adeyemi said despite the asphyxiating environment, the airlines have remained resilient and improving on safety to the point of recording zero incidence in 2016.
Going forward, she harped on the need for more hard work with focus on the imperatives of international best practices especially in the areas partnership and interlining arrangements among the airlines.