The African Development Bank (AfDB) has pledged a $7 billion support package for Nigeria’s aviation sector, as the Federal Government moves to establish a national aircraft leasing company for domestic airlines.
Minister of Aviation and Aerospace Development, Festus Keyamo, made this known in Abuja on Tuesday during a meeting with representatives of the Airline Operators of Nigeria (AON).
Keyamo said Nigeria was selected as one of the pilot countries under AfDB’s integrated African aviation programme aimed at improving access to aircraft financing and strengthening airline operations across the continent.
“The African Development Bank has keyed into this because they have an integrated programme for this kind of thing in Africa and Nigeria is one of their pilot countries,” the minister said. “They have announced a $7 billion support package for this programme to pump into aviation and I have been officially appointed as ambassador for this programme in Africa by the African Development Bank.”
The minister said the planned leasing company would help local airlines overcome long-standing challenges in acquiring aircraft and aviation equipment.
According to him, the initiative was approved by President Bola Tinubu to support indigenous operators in the absence of a government-backed national carrier.
“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,” Keyamo said.
He added that easier access to aircraft would help airlines reduce persistent flight cancellations and lower ticket fares.
“Once they acquire more aircraft, it will help to cut down on the constant cancellation of flights we are currently familiar with and force down the price of airfares,” he stated.
Keyamo explained that the proposed company would largely be privately funded, with government providing only strategic support and sovereign guarantees.
“The company will have strategic backing by the government but it will be substantially private,” he said.
“We are bringing in investments of nearly 95 or 99 per cent from outside. Development banks across Africa, private individuals from outside the country and inside the country are bringing in money to ensure that this company has enough funding to bring in aircraft into the country on dry lease.”
He stressed that the Federal Government would not inject direct funding into the venture.
“Government is not putting one kobo in it. The government is only providing a sovereign guarantee for the safety of those aircraft and for repossession. And for that, the government will hold a minimum equity in the company,” he added.
Reacting to the development, Managing Director of Ibom Air, George Uriesi, said the initiative would significantly ease financing pressures on Nigerian airlines.
“So this move has untied our hands by providing us a Nigerian leasing company that not only will it provide us access to aircraft at way reduced interest rates, but we will be paying it in Naira,” he said.
“With this, we are not worried about whether the dollar is going to go up or come down because the business model will be very clear and we will be paying in Naira.”
