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Why Airbus Plans to Set Up Office in Nigeria

European aircraft manufacturing giant, Airbus announced last week that it plans to set up its office in Nigeria. The company is targeting a wider presence across emerging markets, which will account for an increasing amount of demand for airplanes in the coming decades.

Vice President of the Airbus Group for Africa, Vincent Larnicol, said last week at a discussion with aviation minister, Senator Hadi Sikiru, that the company was opening an operational office in Nigeria as part of its efforts to widen the scope of its operations across the globe. Airbus currently has 150 field services worldwide and is working to expand production capabilities in Europe, India, China, Russia, the Middle East, Singapore and the United States.

Nigeria’s aviation sector has been hit by the current recession; falling passenger traffic and increased operations costs have forced major air carriers to seek ways of cutting costs. Some of them now operate from neighboring countries or roll back on flight services to varying extents. Despite this, Airbus has expressed confidence that the long-term outlook for the industry will be brighter.

Airbus’ apparent decision to swim against the economic currents with its Nigeria office is obviously strategic. The Federal Government’s planned reform of the aviation sector includes measures which may have attracted the aircraft manufacturer- the establishment of a private sector driven national carrier and an aircraft leasing company are important aspects of the plan. Airbus has indicated interest in the government’s plans to concession major airports. It also says it will be working with Nigerian authorities to set up an Aviation University in the country.

On the whole, the aviation market is set to undergo a large-scale shift, as air traffic from emerging economies continues to increase. Nigeria’s passenger and freight transportation may have witnessed a dip in recent times, but growth in this sector is expected to accelerate in the next few decades. Airbus forecasts an expansion in the characteristic demand base for air transportation- the urban middle class –in Nigeria; it suggests in a report that Ibadan, Abuja and Kano will be joining the ranks of megacities (which currently includes Lagos) in the next 20 years, thus raising prospects for much greater air travel in the country. These positive forecasts may have inspired Airbus’ move to set up its office in the country.

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Ikenna Nwachukwu

Ikenna Nwachukwu holds a bachelor's degree in Economics from the University of Nigeria, Nsukka. He loves to look at the world through multiple lenses- economic, political, religious and philosophical- and to write about what he observes in a witty, yet reflective style.

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