Rewane: Aviation infrastructure downward trend costs Nigeria $3.5 billion, domestic passenger decline in 2024

State govt. obsessed with airlines, airports
Loss-making airlines rely on govt subsidies, suffer mismanagement, inefficiency

The Chief Executive Officer of Financial Derivatives Company (FDC), Mr. Bismarck Rewane, stated that due to poor infrastructure, Nigeria’s aviation sector lost $3.5 billion in revenue between 2020 and 2022.

Speaking at the 29^th edition of the League of Airports and Aviation Correspondent (LAAC) annual conference with theme, “Aviation Financing in Nigeria: Risks, Opportunities and Prospect” held in Lagos on Thursday, Rewane noted that the downward trend of the sector occasioned by poor infrastructure equally saw to domestic passenger traffic declined for the second straight year to 11.5m in 2024.

He maintained that the aviation industry is fragmented, as the sector is indeed facing fragmentation, leading to inefficiencies and challenges in its overall performance.

This fragmentation manifests in various ways, including a proliferation of government agencies with overlapping functions, inadequate infrastructure, and a lack of integration among different parts of the sector.

Many airports lack sufficient capacity and modern facilities, leading to delays and cancellations, just as the different segments of the aviation industry, such as airlines, maintenance providers, and regulatory bodies, often operate in isolation, hindering overall efficiency and safety.

Taking a peep into the country’s aviation sector in 2025, the economist disclosed that air transport sector contracted by 0.81% in Q1 2025, the sixth consecutive quarterly decline.

This, he said, manifested in the viability of the nation’s airport, saying, “Nigeria has 32 airports, only 20 were considered viable in 2024, and 92-96% of traffic flows through just four”.

“Nigeria has 23 active domestic airlines; however, five airlines control 75% of traffic. The industry is fragmented”.

Rewane further stated that in the last eight years, state governments’ obsession with owning airlines, citing Ibom Air by Akwa Ibom State (set up in 2019), Cally Air by Cross River State in 2021 and Enugu Air by Enugu State in 2025, while state governments have equally embarked on airport proliferation like the Ekiti Cargo Airport (Ekiti State in 2019), Ogun State Gateway Agro-Cargo International Airport (Ogun State 2021), Ebonyi State International Airport (Ebonyi State 2023), Gusau International Airport (Zamfara State 2024) and Abia State Airport (Abia State 2024).

While classifying airlines, Rewane reckoned that Ethiopian Airlines is profitable due to fleet scale diversification (cargo, leasing) and hub efficiency, with $1.05b profit in 2024, while South African Airways is said to have made $19.8m in 2024.

He said, “Profitable airlines tend to have modern fleets, strong operational autonomy, and diversified revenue streams. Loss-making airlines often rely on government subsidies, operate in low-demand markets, and suffer from inefficiency or mismanagement.”

He posited that the Nigerian aviation sector needs consolidation, stressing that there is also a need for a competitive hub system, preferably in Lagos, then Abuja.

He stated that the nation needs very strong and effective regulations for safety.

He advised that concessions and Public Private Partnerships (PPP) should be prioritised for airport upgrades to aid national fiscal sustainability and avoid inefficient operations.

The FDC boss, while supporting concession, said it is ironic that the government was spending money on airport repairs at a time it was planning to concession the aerodromes.

He called on the government should focus on policy and regulation, not running airlines or building airports directly.