Nigeria - Civil Aerospace: Economic decline limiting growth (Strategy, Performance and Risk Analysis)
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Over the past ten years, Nigeria has been undergoing major economic transformations, progressing from a disarticulated economy to an articulated economy. This transformation has led to the country becoming one of the fastest growing economies in Africa and the Middle East. The Nigerian Civil Aviation Authority (NCAA) has a multiple entry point bilateral air services agreement with 78 countries, which allows the airline operators of these countries to dominate the Nigerian air passenger traffic on long haul routes. This is leading to a decline in the ease of doing business for air carriers based in Nigeria.
Aircraft deliveries are expected to remain low, Billing amount to increase
The decline in number of air passengers is affecting new aircraft deliveries in Nigeria. However, the number of deliveries of new aircraft is expected to increase from one in 2017 to two in 2021 and all the aircraft in the forecast period are estimated to be narrow bodied aircraft owing to lesser cost as compared to wide body aircraft. The billing against delivery of new aircraft in Nigeria is expected to increase at 14.3% CAGR from US$59.1 million in 2017 to US$101.2 million in 2021.
Demand for light helicopter to drive helicopter capex growth
Capital expenditure on helicopters in Nigeria witnessed a decline from US$39 million in 2015 to US$11 million in 2016. However, it is expected to increase at 3.3% CAGR during 2017-21 from US$11.4 million in 2017 to US$13 million in 2021. Increased demand for light helicopters will drive the overall capital expenditure growth for civil helicopters. Light helicopter capital expenditure is expected to increase at 4.6% CAGR from US$6 million in 2017 to US$7 million in 2021.
Procurement of used narrow body aircraft leading to an increase in the active fleet size
The active fleet size of aircraft in Nigeria witnessed a growth of 8.6% from 58 aircraft in 2015 to 63 aircraft in 2016. Active fleet is further expected to increase at 9.7% CAGR from 71 in 2017 to 103 in 2021, with leasing and purchasing of narrow body aircraft by airline carriers in order to expand their operation. The number of narrow body aircraft registered a 7% growth between 2015 and 2016 from 57 in 2015 to 61 in 2016 and is expected to increase at 9.3% CAGR from 70 in 2017 to 100 in 2021.