Air Passenger Traffic Less Than 2% Of GDP Potential – FAAN MD

The managing director of the Federal Airports Authority of Nigeria (FAAN), Olubunmi Kuku, has said Nigeria’s air passenger traffic remains significantly below its economic potential, noting that the country records less than two per cent passenger traffic relative to its Gross Domestic Product (GDP).

Kuku made this known during an interview with CNBC Africa over the weekend, where she highlighted the relationship between economic activity and air travel demand.

According to her, economic productivity remains one of the most important determinants of passenger movement in the aviation sector.

“Nigeria, for example, and when you look at the key factors that drive passenger traffic, the biggest is GDP. When you look at the GDP of the Nigerian population, and you compare it to our passenger traffic, it’s actually very low, it’s less than two per cent.

She explained that improving the country’s economic environment would significantly boost travel demand, particularly through increased trade, tourism and business activities.

“One, you need to either improve the business environment where there are a lot of trade activities that are happening that bring people into the country or even the economic activity. So whether it’s tourism or business activity. But when we start to look at the hub, we really see the future in two things.”

Kuku further stressed that Nigeria must strengthen its aviation hub strategy and improve bilateral aviation agreements to expand international connectivity.

The FAAN boss said achieving hub status requires more than building infrastructure; it also requires creating operational enablers that make transit travel efficient.

“A hub is literally an environment or an airport environment where you’re able to have transit passengers move from one location to the other without necessarily making that country their end destination.

One is in driving the hub strategy, and the second is also for both passenger and cargo. To make the hub strategy effective, a couple of things need to happen. It’s not just about developing an airport or building infrastructure.

“But, it really requires that we look at the enablers. And what are these enablers? For example, look at the airlines. So for us to be able to increase our aircraft movements and have additional points of entry, we look at the bilateral air service agreements that we have with other countries.”

She noted that Nigeria had made progress in expanding international routes under the current administration.

“I believe that in this administration of the last three years, the minister has actually improved the number of routes of airlines that are going outside of the country and also being able to come into the Nigerian market.

“But what that also means is that as we start to say we’re driving a hub, one, you need to make sure that there’s a transit area. Today, at the Nigerian airport, it’s quite difficult to transit because there’s no transit facility.

“And this is actually one of the things that we’re doing as part of the rehabilitation work that is happening.”

Kuku also spoke on the airport toll collection system, saying the presidential approval allowing a hybrid toll payment system has provided operational flexibility for the aviation sector.

“Our ultimate goal outside of safety and security is also to make sure that our passengers and the neighbouring areas have a seamless experience. We’re grateful to Mr President. He was able to step in.

“For him, it wasn’t just about implementing a federal government directive. He understood the uniqueness of the airport environment and realised that if we implemented the policy without looking at a broader picture, some of the infrastructure challenges that the airport has, things around potentially widening the lanes, improving or increasing the number of payment channels that we had, we would continue to have a challenge.

“And in his rightful mind, within the Federal Executive Council, we did get a waiver that allowed us to do both hybrid, meaning that we will continue to use some of the contactless cards that we have put out so non-cash payments, but we can use cash until we get a broader view in terms of the number of people who can actually use contactless payments so far.

“I consider this a big win for the industry because it gives us more time to pilot, transition and put in the necessary infrastructure. No, that is important. That’s getting to the big picture now, what we’re trying to achieve. I see this as trying to hit an elephant, and where do we start? Talking about our regional home foundations and the rehabilitation of the airports here.

“And I’m thinking, how do we compete, where do we start, and how are we getting there. So Nigeria, and especially the Murtala Muhammad Airport, is one of the busiest airports across Africa.”