CHIDI UGWU, ABUJA
The Federal Executive Council has approved the establishment of a Nigerian aircraft leasing company backed by international investors and development finance institutions in a bid to tackle the chronic shortage of aircraft affecting domestic airlines, a development aviation operators say could significantly reduce flight cancellations, financing costs and operational pressure across the sector.
Minister of Aviation and Aerospace Development, Festus Keyamo, disclosed this on Tuesday in Abuja during a briefing with airline operators and industry stakeholders following approval from the Federal Executive Council for the creation of a Special Purpose Vehicle (SPV) to drive the project.
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Keyamo said the initiative was designed to stabilise Nigeria’s privately-driven aviation sector by making aircraft acquisition easier and more affordable for local airlines.
According to him, Nigeria remains unique in Africa because most of its airlines are privately owned, unlike many African carriers that are government-owned or heavily subsidised.
“It is only in Nigeria and the whole of Africa that you have this volume of private operators. All the major airlines in Africa are owned or subsidised by governments. Since we do not own a national airline, our duty is to support Nigerian private operators to survive and thrive,” he said.
The minister explained that the proposed leasing company would source funding from international investors, African development institutions and private financiers to acquire aircraft and lease them to Nigerian carriers in local currency, reducing airlines’ exposure to volatile foreign exchange rates.
He said the structure would also give global financiers confidence through government-backed assurances on aircraft safety and repossession processes, rather than direct sovereign financial guarantees.
Keyamo revealed that the African Development Bank had keyed into the programme and designated Nigeria as one of its pilot countries under a broader aviation financing initiative.
According to him, the AfDB has created a $7 billion support package for the programme across Africa and appointed him as an ambassador for the initiative on the continent.
He added that discussions on the project were already attracting international interest, with the government expected to sign further agreements on the sidelines of aviation meetings in Brazil.
The minister linked the initiative directly to persistent flight delays and cancellations in Nigeria, arguing that many airlines struggle because they lack enough operational aircraft.
“Our approach is not to fight the airlines but to support them with policies that will improve their services. No airline is happy to cancel flights because they lose money when that happens,” he said.
Chief Executive Officer of Ibom Air, George Uriesi, described the initiative as a “major recharge” for the industry, saying Nigerian airlines had long been disadvantaged by high financing costs and limited access to aircraft leasing.
Uriesi said international financiers previously avoided Nigerian airlines because of concerns around aircraft repossession and regulatory enforcement, but noted that reforms around the Cape Town Convention and aviation insurance had started restoring investor confidence.
“For airlines like ours ordering brand new aircraft, the financing gap is huge. If competitors elsewhere access aircraft financing at three per cent and we are taking the same aircraft at 30 per cent interest, then our hands are tied behind our backs from the start,” he said.
He noted that local currency leasing arrangements would help airlines better predict long-term operational costs without constant exposure to dollar fluctuations.
Industry stakeholders believe the initiative could eventually increase the number of aircraft available to domestic carriers, improve route reliability and ease upward pressure on airfares.
Keyamo acknowledged that recent increases in aviation fuel prices and foreign exchange pressures had worsened operational costs for airlines, but insisted the government was focused on long-term structural reforms rather than punitive measures against operators.
He said incorporation of the leasing company was expected within weeks, while broader financial take-off arrangements with investors and development partners were still being finalised.
