Did N712bn Lagos Airport Upgrade Solve Nigeria's 2025 Aviation Crisis?

The Nigerian aviation industry 2025 experienced a year of sharp contrasts. Significant infrastructure investment occurred alongside severe economic pressures. The sector saw pivotal regulatory shifts and widespread stakeholder grievances. This period represented a critical reset point for the nation’s air travel market.

Infrastructure Push: The N712bn Airport Upgrades

The Federal Executive Council (FEC) approved a landmark N712.26 billion project. This massive sum was earmarked for the full rehabilitation and modernization of the Murtala Muhammed International Airport (MMIA) Terminal 1 in Lagos. The investment is part of a broader N900 billion national aviation infrastructure reform program.

Construction officially began by late December 2025, contracted to China Civil Engineering Construction Corporation (CCECC). The plan involves stripping the old terminal down to its core structure. New mechanical, electrical, and plumbing systems will be installed. The project aims to transform MMIA into a world-class regional aviation hub. This Lagos airport modernization is funded by the Renewed Hope Infrastructure Development Fund. However, the high cost sparked public debate regarding transparency and value for money.

Concession and Land Disputes

Simultaneously, the government renewed its push for airport concessioning. This move faced FAAN concession disputes and strong resistance from aviation unions. Unions argued the process lacked transparency and failed to protect workers’ interests. Separately, a long-standing legal tussle between the Federal Airports Authority of Nigeria (FAAN) and AIC Limited resurfaced. AIC warned FAAN against encroachment on disputed land at MMIA, citing subsisting court orders. This conflict highlights challenges in contract enforcement and investor confidence.

Economic Headwinds and Fare Crisis

The year was marked by severe air travel economic headwinds and currency volatility. The sector’s nominal growth rate collapsed to 2.88% by Q3 2025, down from a 57% surge in Q1. This downturn was driven by soaring operating costs.

Domestic Airline fare hikes Nigeria became a national crisis. One-way fares on some routes skyrocketed from N120,000 to over N400,000 before the festive season. The Nigerian Senate was forced to summon the Aviation Minister and major airlines to address the crisis.

Despite the financial turbulence, operational reliability showed improvement. Data from the Nigeria Civil Aviation Authority (NCAA) showed domestic flight cancellations fell sharply. Only 80 cancellations were recorded in Q3 2025, compared to 251 in Q3 2024. Furthermore, Nigeria’s Cape Town Convention compliance improved to 75.5% by November 2025. This enhanced compliance allowed local carriers to secure dry leases for aircraft. This is critical for fleet modernization and cost reduction, as seen in global commercial aviation news (https://flying.flights).

Regulatory Reset and Consumer Protection

2025 proved a turning point for accountability and NCAA consumer protection. The NCAA intensified enforcement of its regulations. This stricter oversight resulted in domestic airlines paying over N1 billion in passenger refunds between May and July 2025. The regulator also addressed rising cases of unruly passenger behavior and complaints against foreign carriers. The NCAA's actions signal a stronger commitment to passenger rights, aligning with global standards set by bodies like the FAA and IATA. The industry's safety record remained strong, with no fatal accidents reported during the year. The push for dry leasing, enabled by the Cape Town Convention, is expected to boost capacity and competition, potentially easing fare pressure. This will help local airlines, many of which operate older models, to acquire modern aircraft like those from Airbus.

• N712.26 billion was approved for the MMIA Terminal 1 overhaul and associated works.
• Domestic airfares on certain routes surged from N120,000 to over N400,000.
• NCAA enforcement led to over N1 billion in passenger refunds in just three months.
• Cape Town Convention compliance improved to 75.5%, facilitating dry leases for local carriers.