A financial analyst, Mr. Bismarck Rewane, has called for urgent consolidation in Nigeria’s aviation sector to ensure efficiency, profitability, and competitiveness.
Speaking at the 29th Annual Conference of the League of Airport and Aviation Correspondents (LAAC) in Lagos, with the theme: “Aviation Financing in Nigeria: The Risks, Opportunities and Prospects,” Mr. Rewane said unviable airports and struggling airlines should merge to cut costs and boost performance.
The event brought together key stakeholders in the aviation ecosystem to discuss the challenges and give recommendations on the best options of aviation financing, airlines and airports.
According to Financial analyst, Mr. Bismarck Rewane, industries in difficulty have historically turned to consolidation as a path to sustainability, citing precedents in Nigeria’s banking, insurance, and downstream petroleum sectors.
He noted that such mergers reduce average costs, expand profit margins, and ultimately stimulate growth.
The economist observed that Nigerian banks have traditionally found the airline business unattractive due to inefficiencies, making credit access a persistent challenge.
However, he noted that intervention funds and financing facilities exist, but airlines must first prove operational viability to attract such investments.
He pointed to global carriers such as American Airlines and Singapore Airlines as examples of efficiency and innovation, expressing optimism that Nigeria’s aviation industry could follow a similar trajectory toward profitability and competitiveness.
“Industries that are in difficulty should consolidate. Consolidation means that they merge, they become more efficient and become more competitive. It happened before in the insurance industry, it happened in the banking industry, it’s happening in downstream petrol. It’s natural that industries consolidate. Consolidation means there’ll be a shakeout. The most viable would survive”.
The economist also revealed that Nigeria had lost an estimated ₦3.5 trillion in infrastructure value over an extended period, not through outright loss but due to inefficient deployment of resources.
On the issue of state-run airports, Mr. Rewane advised state governments to focus on ventures where they have a competitive advantage, urging them to adopt modern, strategic approaches to infrastructure development.
Vice President, Airline operators of Nigeria, AON, Mr. Allen Onyema said the aviation sector, being capital-intensive with low returns on investment globally, should be treated differently from other sectors of the economy.
He argued that the survival of local carriers hinges on access to single-digit interest loans, stressing that no airline will fail in this country if given such funding support.
“So you don’t treat aviation the way you treat other sectors of the economy because there’s a lot to it. So we deserve and demand to have a very liberal, a very affordable rate for funding. It is given, but if the airlines in Nigeria, considering what we are doing at this moment, if we are giving that succor to borrow money at single digit interest rate, no airline will fail in this country”.
Former President, Aviation Safety Roundtable Initiatives, ART, Dr. Gbenga Olowo represented by Mrs. Mary Olowo-Soyeke also called for stronger government intervention in aviation financing, including the introduction of export credit facilities to help domestic airlines expand their fleets and route networks.
“It’s important for you to diversify that money that’s coming in and putting those funds into other avenues that will yield income for you. Reinvesting those profits, sometimes outside of your area of influence, the business, to grow the money. That’s number one. Number two, there’s no way around it. You have to have financial oversight”.
He cited examples of how strategic funding could transform airline operations, allowing for innovations in infrastructure and service delivery.
While, the Chief Operating Officer, Bicourtney Aviation Services, manager of MM2 terminal, Mr. Remi Jibodu, advocated stronger government support for existing public-private partnerships (PPPs), arguing that this would boost investor confidence and encourage more private sector participation.
“So we must be able to encourage the existing PPP as we speak today so that other investors also will be encouraged to come into the industry and invest”.
Highlights of the conference was the presentation of awards, launch of compendium and presentation of the 7th edition of the Travel Watch Magazine.
Honourees of the awards include the NCAA for its effective oversight, CITA Energies, Dr. Thomas Ogungbangbe, Kebbi State Governor, Air Peace, and former NCAA Director-General, Dr. Harold Demuren, among others.
Reporting by Nosa Aituamen