Despite High Airfares, Nigeria’s Aviation Sector Offers Huge Opportunities for Tourism Growth

Published on December 11, 2025

Nigeria’s aviation sector continues to show resilience, with a paradox of high airfares coupled with steady demand. According to Mrs. Nike Macaulay, CEO of Wakanow Nigeria, the core challenge for the sector is not attracting passengers but addressing inefficiencies in pricing, distribution, and the overall value delivered to travelers. This insight was shared during the recent FAAN National Aviation Conference in Lagos, highlighting the vast potential of the sector that remains largely untapped, despite rising ticket prices.

In 2023, Nigeria processed nearly 16 million air passengers, a slight increase over the previous year, despite significant fare hikes. These numbers underscore the strong demand for air travel, even as ticket prices soar due to factors like currency volatility and high operational costs. Air travel in Nigeria is driven largely by necessity—business, medical, and family obligations—making it less elastic to price increases. However, despite the sector’s resilience, less than 10% of Nigerians currently use air travel, pointing to significant untapped potential within the country’s large population of over 200 million.

Growing Demand Despite High Airfares

Air travel in Nigeria has seen consistent growth, with corporate travelers and middle-to-high-income individuals forming the core passenger base. Major cities such as Lagos and Abuja drive demand, with business and government activities contributing significantly to the aviation market. While local routes are more sensitive to price fluctuations, international routes, particularly those to destinations in Europe, the Middle East, and Asia, maintain strong demand despite higher prices. This creates a somewhat unique scenario in which demand for air travel in Nigeria remains robust, despite the challenges posed by high fares.

The necessity-driven nature of air travel has led to inelastic demand in Nigeria. Business professionals, medical patients, and individuals with family obligations often find the cost of air travel outweighed by the cost of not traveling, even as fares increase. This trend reflects a continued need for air travel solutions, even in the face of rising prices.

Unmet Market Potential

Despite the strong demand from certain segments, air travel in Nigeria is still out of reach for a large portion of the population due to prohibitive costs. With less than 10% of Nigerians able to afford air travel, the potential growth market is vast. This creates a significant opportunity for airlines to expand their reach by developing affordable and accessible travel options that cater to the majority of Nigerians.

The country’s aviation market, which currently serves mainly corporate travelers and affluent individuals, has enormous growth potential. By addressing pricing inefficiencies, improving value offerings, and developing more competitive services, the sector could unlock the vast untapped market, with air travel becoming more accessible for a larger portion of the population.

Opportunities in Retailing and Ancillary Services

A key opportunity in Nigeria’s aviation sector lies in modern retailing and ancillary services. Globally, airlines have adopted dynamic pricing, fare bundling, and the sale of ancillary services such as seat selection, baggage, and priority boarding as profitable revenue streams. In Nigeria, these revenue sources remain underdeveloped. By embracing modern distribution technologies and focusing on value-added services, airlines can increase profitability while meeting customer demands for greater convenience and flexibility.

Airlines in Nigeria could explore opportunities to diversify their revenue streams by introducing more flexible pricing models and offering additional services, such as premium seating options or customizable packages, to cater to different customer needs. Additionally, integrating technology into the booking and purchasing process can help streamline the customer experience, reduce friction, and increase customer satisfaction.

The Challenge of Operational Costs

Despite the apparent demand for air travel, Nigerian airlines face persistent profitability challenges. High operational costs, currency fluctuations, and a tax regime that inflates ticket prices are among the factors that continue to strain the sector. These challenges, coupled with high interest rates and limited access to affordable financing, hinder the growth potential of domestic carriers. The industry’s reliance on foreign exchange for operational expenses further exacerbates these issues, limiting the ability of airlines to scale effectively.

While the aviation sector has responded by reducing capacity and consolidating schedules, these measures have not fully addressed the underlying cost issues. To sustain growth, Nigerian airlines will need to find ways to reduce operational costs while improving service quality, making air travel more accessible for both business and leisure travelers.

Unlocking Nigeria’s Aviation Market Potential

The aviation sector in Nigeria remains one of Africa’s most promising markets, driven by its large population and resilient demand for air travel. Despite the challenges, the continued interest from foreign carriers and the growing number of domestic flights reflect the sector’s long-term potential. For Nigeria to fully capitalize on this potential, airlines and tourism professionals must focus on improving the value proposition of air travel, making it more affordable and accessible to a larger portion of the population.

One key to unlocking this potential lies in forming strategic partnerships and adopting smarter technologies. By enhancing efficiency in pricing, distribution, and customer service, Nigerian airlines can improve their competitiveness in the global aviation market. Additionally, addressing the structural challenges of the aviation industry, including high operational costs and reliance on foreign exchange, will help create a more sustainable and resilient sector.

Implications for Africa’s Tourism Sector

Nigeria’s experience offers valuable insights for other African nations facing similar challenges in the aviation sector. As airlines across sub-Saharan Africa seek to improve connectivity and access, the lessons from Nigeria’s market can provide a roadmap for growth. Understanding the inelastic nature of air travel demand and focusing on improving the customer experience can help African countries unlock their aviation sector’s full potential.

For tourism professionals in Africa, the key takeaway is that affordability, improved service quality, and efficient pricing are crucial to capturing the untapped market. By focusing on these areas, the aviation sector can stimulate demand and expand the reach of African destinations in the global tourism market.

Conclusion: A Critical Period for Nigeria’s Aviation Growth

Nigeria’s aviation market holds significant untapped potential. By addressing inefficiencies in pricing, improving value delivery, and expanding service offerings, the sector could unlock new opportunities for growth and development. With the right mix of innovation, strategic partnerships, and customer-centric approaches, Nigeria’s aviation sector could emerge as a leading force in African and global tourism, benefiting not only airlines but the broader tourism and hospitality industries across the continent.