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Tuesday, June 6, 2023

Aviation Industry Shows Sign of Life After Pandemic Slump

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The skies are busy again as there has been an improvement in air passenger traffic in the second quarter, thanks to the reopening of airports, reinstatement of flights, and rollout of vaccine.

Total traffic in the second quarter (Q2) ‘21 stood at 3.2 million passengers, representing an increase of 9 percent quarter on quarter and 72 percent year on year, according to data from the National Bureau of Statistics (NBS).

Based on the national accounts, Nigeria’s air transport segment grew by 4.9 percent year on year (y/y) in Q2 ’21 compared with a contraction of -11.8 percent recorded in the previous quarter.

Additionally, for Q2 passenger traffic on departures accounted for 50 percent of total domestic air travel and 51 percent of total international air travel, according to the report.

However, analysts at Cordros Capital in a recent note to clients said despite this impressive year-on-year increase, the aviation sector is still recovering from the effects of the covid-19 pandemic as overall passenger traffic is still below pre-pandemic levels.

There are also concerns about the slow rollout of vaccines in low income countries and another elephant in the room is the delta variant of the virus that poses threat to global economic recovery.

Nigerian and other African airlines will see a very slow pace of recovery in financial performance from a $1.9 billion loss in 2021 to a $1.5 billion loss in 2022, bringing the continent’s total loss in two years to $3.4bn (N1.4tn), according to a latest report by the International Air Transport Association (IATA).

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