The Federal Government has approved the establishment of a Nigerian aircraft leasing company aimed at helping local airlines acquire aircraft more easily, reduce flight disruptions, and lower airfares.
Festus Keyamo, Minister of Aviation and Aerospace Development, disclosed the development in Abuja during a meeting with representatives of the Airline Operators of Nigeria (AON).
Keyamo also revealed that the African Development Bank (AfDB) has committed a $7 billion funding package to support its integrated African aviation programme, with Nigeria selected as one of the pilot countries.
According to Keyamo, the new leasing company is designed to address one of the biggest challenges facing Nigerian airlines — access to affordable aircraft financing.
“Since we don’t own a national airline and we don’t subsidise one, our duty as a government is to ensure that we support domestic airline operators to make them stable and make their businesses thrive,” he said.
He explained that President Bola Ahmed Tinubu approved the initiative to strengthen local carriers and improve operational stability across the aviation sector.
“The major problem of local operators has been how to acquire aircraft for their operations,” Keyamo stated.
He added that increased access to aircraft would help reduce frequent flight cancellations and force down ticket prices.
Keyamo disclosed that the proposed leasing company would be largely privately funded, with the government holding only a minimal equity stake.
According to him, between 95 per cent and 99 per cent of the investment will come from development finance institutions, private investors, and partners within and outside Nigeria.
“The government is not putting one kobo into it. The government is only providing sovereign guarantees for the safety and repossession of the aircraft,” he said.
The aircraft are expected to be provided to airlines through dry lease arrangements, allowing operators to access planes without the heavy upfront financing costs typically associated with aircraft acquisition.
The aviation minister also disclosed that the AfDB has backed the initiative as part of a broader continental aviation integration programme.
“The AfDB has announced a $7 billion support package for this programme across Africa, and Nigeria is one of the pilot countries,” Keyamo said.
He further revealed that he had been appointed an ambassador for the programme across Africa by the Bank.
Speaking on behalf of the Airline Operators of Nigeria, Managing Director of Ibom Air, George Uriesi, described the move as a major relief for domestic airlines battling high financing costs.
“Aircraft is the most expensive asset any airline can buy,” he said.
Uriesi noted that Nigerian airlines currently face significantly higher financing rates compared to foreign competitors, making operations more expensive.
“If our competitors access aircraft financing at 3% interest while we pay 30%, we are already disadvantaged before operations even begin,” he explained.
He added that the new leasing company would allow Nigerian airlines to lease aircraft at lower interest rates and make payments in naira, reducing exposure to exchange rate volatility.
“With this, we won’t be worried about whether the dollar rises or falls because the business model becomes clearer and more stable,” he said.
