Building a Competitive Nigerian Airline Industry By Femi Obembe

Over the past two to three decades, Nigeria’s airline industry has struggled under harsh economic conditions, leaving it far behind its foreign counterparts.

In the days of the defunct Nigerian Airways, air travel was affordable to the average Nigerian. Many could fly to the United Kingdom or other destinations for holidays. Though the airline benefited from government subsidies, it provided a vital link between Nigerians and the rest of the world.

That changed after the deregulation of the economy and the sharp depreciation of the naira. Airlines found it increasingly difficult to obtain foreign exchange for aircraft maintenance and operations.

Today, flying is largely a luxury. A one-hour flight from Lagos to Abuja now costs around $130—about ₦182,000 at the prevailing exchange rate of ₦1,400 to the dollar. Clearly, air travel is beyond the reach of most Nigerians.

This article calls for a national rethink of our aviation sector and explains why government support for domestic airlines is essential for Nigeria’s growth and global standing.

Restoring National Pride
A strong national airline enhances Nigeria’s image in the eyes of the world. Unfortunately, Africans—especially Nigerians—are often treated as second-class citizens abroad.

Our green passport, once respected, now attracts unnecessary scrutiny and visa restrictions. A Nigerian carrier flying regularly to major global destinations like London, New York, and Beijing would project pride and confidence.

Political independence without economic strength is hollow. A vibrant national airline is one way to assert our true independence.

Driving Economic Diversification
For more than five decades, Nigeria has depended heavily on oil revenues. Each time global oil prices fall, the entire economy suffers.

A strong aviation industry can help diversify the economy. It will stimulate tourism, logistics, and hospitality, opening new sources of income for both the federal and state governments.

Countries like Kenya have built thriving tourism sectors around air connectivity. Nigeria—with far greater natural and cultural assets—can do even better if the aviation sector is given proper attention.

Reducing Pressure on the Naira
There is huge demand for air travel among Nigerians, including the millions in the diaspora. Yet, foreign airlines dominate our most lucrative routes.

It is well known that the Lagos–Atlanta route ranks among Delta Airlines’ most profitable. A competitive Nigerian carrier on such routes would earn valuable foreign exchange and reduce pressure on the naira.

By strengthening domestic airlines, Nigeria can retain billions of dollars that currently flow to foreign carriers every year.

Showcasing Nigerian Culture
A national airline can also serve as a vehicle for cultural diplomacy. Imagine passengers on international flights being served Nigerian meals—jollof rice, pounded yam, egusi soup, or banga stew.

This not only showcases our rich culture but also boosts local agriculture and food production. Promoting our own culture through aviation strengthens the economy and national identity alike.

Making Nigerian Airlines Competitive
The Tinubu administration deserves credit for recent progress, such as Air Peace’s direct flights to the UK. But much more needs to be done to make Nigerian airlines truly competitive.

Two key issues stand out:
1. High Fuel Costs: Fuel accounts for about 60% of airlines’ operating expenses. Given Nigeria’s oil wealth, government should partner with local refiners—especially the Dangote Refinery—to ensure airlines access aviation fuel at competitive rates. This should not be viewed as a wasteful subsidy, but as a strategic investment to strengthen local businesses and make them globally competitive.

2. Aircraft Maintenance: Most Nigerian airlines service their aircraft abroad, draining scarce foreign exchange. Establishing local Maintenance, Repair, and Overhaul (MRO) facilities will save costs, create jobs, and position Nigeria as a regional aviation hub.

If we cannot yet manufacture aircraft, we should at least be able to maintain them efficiently.

Consolidation and Strategic Support
Government should also consider encouraging industry consolidation. A few well-managed airlines can achieve economies of scale, reduce operational inefficiencies, and simplify government oversight.

With focused support, Nigeria can build a lean but powerful aviation industry capable of competing anywhere in the world.

Conclusion
As more Nigerians invest in key sectors, government must view these ventures as national assets, not private enterprises.

Dangote Industries, though privately managed, contributes immensely to the nation’s development. Similarly, Air Peace, under Allen Onyeama, represents Nigerian enterprise and determination.

Supporting such companies is in Nigeria’s collective interest. A competitive aviation sector will not only boost our economy—it will restore our dignity, strengthen our independence, and once again allow Nigerians to soar proudly across the skies.

 

Femi Obembe is an Economist and Public Policy Analyst with the Commonwealth of Virginia, USA.