Airbus highlights Nigeria’s huge market potential on population, GDP
July 22, 2024557 views0 comments
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One of Africa’s biggest untapped markets
Airbus, the European aircraft manufacturer, and one the world’s two major players in the sector, has been talking up the potential of Nigeria as a significant market for aircraft demand and says the country is one of the biggest markets in Africa with untapped potential, per a report by Simple Flying.
According to the report, African airlines are expected to grow their fleets significantly over the next 20 years, and Airbus sees Nigeria as one of Africa’s biggest untapped markets, given its population size and Gross Domestic Product (GDP). In addition, the growth of intra-African traffic is driving the demand for single-aisle aircraft on the continent, Simple Flying further wrote.
A prediction by Airbus last year in its Global Market Forecast (GMF) projected that Nigeria will require about 160 passenger and cargo aircraft by 2042. The prediction is on the back of the highlighting in GMF of the continent’s aircraft requirements between 2023 and 2042
Airbus stated last year in its GMF that African airlines will require up to 1,180 new aircraft over the next twenty years.
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Joep Ellers, Airbus Airline marketing director, said the aircraft manufacturer sees significant demand for new aircraft in Nigeria, adding that it is one of the biggest markets with untapped potential, given its population size and GDP, which ranks in the top five in Africa. Simple Flying quotes him as saying at the recent IATA Wings of Change Focus Africa event in Johannesburg.
“One of the biggest markets in Africa with the biggest untapped potential is Nigeria. It is the most populous country and has one of the highest GDP, depending on who you talk to, so there is definitely a huge demand in Nigeria,” said Ellers per Simple Flying.
Nigeria also has a massive potential for Maintenance, Repair, and Overhaul (MRO) services, which will be essential to the aviation sector’s growth, safety, and longevity. The development of MRO services in Nigeria will help generate additional revenue and reduce aircraft maintenance costs for airlines.
Nigeria’s Ibom Air recently became the first operator of the Airbus A220-300 in the country after receiving its first aircraft from the order of ten placed in 2021.
Trends and opportunities in Africa
The African aviation sector is characterised by four distinct regions: North, East, West, and South. Regarding fleet development trends, Airbus sees slight differences in each region in the post-pandemic era. However, according to Ellers, most pre-pandemic fundamentals still exist today.
Traffic growth in Africa is still being driven by GDP growth, which is higher than the world average, population growth, urbanisation, growth of the middle class, and liberalisation.
From the 1,000+ new aircraft expected to be delivered through 2042, about 75 percent of new deliveries will be single-aisle jets. The demand for single-aisles is driven by the growth of intra-Africa traffic, which is expected to increase by 4.8 percent over the next 20 years. African airlines are more focused on flying within the continent, with some deploying single-aisle jets on regional routes of up to six hours. Ellers added:
“The main business of African carriers is on the African continent. If you take all the intercontinental flights coming into Africa, more than 80 percent of those flights are operated by non-African carriers. Therefore, we see that in our forecast, where three-quarters of the demand is focused on single-aisles and one-quarter on widebodies.”
In terms of specific aircraft types, Airbus expects African airlines to have a “healthy” mix of single-aisle jets, from the smaller A220s to the larger A321neos and the extended-range A321XLR. Given the differences in each market, orders and deliveries will depend on each airline’s requirements in terms of size module.
The Airbus A321XLR could unlock new long-haul opportunities for Africa, working for airlines that don’t operate widebodies but still want to offer long-haul services. It could also address seasonality, with airlines operating the XLR during the low season.
While there haven’t been any orders yet, Airbus has seen some interest from African airlines for the XLR. It expects to see more interest once the first aircraft enters service with Iberia later this year.