• The Federal Government has approved the Nigeria Aircraft Leasing Company to improve airline access to aircraft
• The Minister of Aviation and Aerospace Development, Festus Keyamo, said the initiative will impose no direct funding obligation on the Federal Government
• The move aims to reduce delays, cancellations, and reliance on expensive short-term wet leases

The Federal Government has approved the establishment of the Nigeria Aircraft Leasing Company, a new initiative designed to improve domestic airlines’ access to aircraft and strengthen the country’s aviation sector.

Minister of Aviation and Aerospace Development, Festus Keyamo, announced the approval on Friday, May 1, via his official X account, stating that the decision was one of the resolutions reached during the Federal Executive Council meeting on Thursday, April 30.

The new company is expected to create a sovereign-backed aircraft leasing structure that will make it easier for Nigerian carriers to acquire or lease aircraft, reduce operational disruptions, and improve their competitiveness against foreign airlines.

According to Keyamo, the Nigeria Aircraft Leasing Company will operate as an incorporated Special Purpose Vehicle backed by government support but financed and managed by private investors.

“Just yesterday, I secured the approval of the Federal Executive Council, presided over by the President, for the establishment of the Nigeria Aircraft Leasing Company.

“The company will be an incorporated Special Purpose Vehicle that will be fully privately funded, commercially operated, and impose no obligation on the Federal Government to invest, but will enjoy strategic government backing,” his tweet read in part.

He explained that the Federal Government would not directly fund the company but would provide sovereign guarantees to international aircraft lessors and manufacturers, particularly around repossession rights.

The structure is expected to reduce investor risk and make the Nigerian market more attractive to global financiers.

Keyamo said the arrangement would allow Nigerian airlines to access aircraft through a single credible platform, rather than individually navigating the highly competitive global leasing market.

He noted that this could help tackle the persistent fleet shortages that have contributed to delays, cancellations, and heavy dependence on costly short-term wet leases.

The minister added that the initiative is also aimed at strengthening domestic carriers on local routes and reducing the overwhelming dominance of foreign airlines, which currently account for about 95 per cent of Nigeria’s international passenger traffic.

He further disclosed that the Federal Government, through the Ministry of Finance Incorporated, will take equity in the company in exchange for its guarantees, allowing the state to benefit commercially while supporting long-term sector growth.

Keyamo also revealed that several African financial institutions and private investors have already indicated interest in the project, pending formal implementation.

He said Nigeria’s large population, strategic geographic position, and strong air traffic demand make the country a highly attractive aviation market that the new leasing company can help unlock.

Speaking separately, Shiekuma Gemade, Executive Vice President and Chief Operating Officer of Aircraft Finance Germany, said Nigeria stands to benefit significantly from a coordinated, sovereign-backed aircraft leasing framework similar to the one now approved.

Drawing from his experience at Riyadh Air, Gemade said countries that treat aviation as a national economic strategy typically secure better financing terms, faster aircraft deliveries, and stronger fleet growth.

He cited Saudi Arabia as an example, where government-backed negotiations with manufacturers like Boeing and Airbus have improved access to aircraft and delivery timelines.

He noted that airlines in countries without that level of sovereign coordination often struggle with long delivery delays, limited financing options, and dependence on expensive short-term leases.

According to him, a centralised leasing structure backed by government guarantees could help Nigeria tackle fleet shortages, reduce reliance on wet leases, and improve operational stability.

Gemade added that countries such as Ethiopia, Kenya, Morocco, South Africa, and Egypt show how long-term aviation planning can support wider economic growth.

He, however, stressed that Nigeria’s success would depend on policy coordination across aviation, finance, taxation, and regulation to sustain investor confidence.

For years, Nigerian airlines struggled to secure dry-lease aircraft due to the country’s blacklisting by the Aviation Working Group over non-compliance with the Cape Town Convention and past disputes involving aircraft repossession.

That position has improved significantly. Nigeria’s compliance score rose from 49 per cent to 75.5 per cent, and its removal from the AWG watchlist in October 2024 reopened access to global leasing markets.

Unlike wet leases, dry leases give airlines greater control over scheduling and operations because the aircraft is leased without crew, insurance, or maintenance bundled into the agreement.

Since Nigeria exited the AWG watchlist, Air Peace remains the only Nigerian airline to secure an aircraft through a dry lease arrangement, achieved in October 2025.

Earlier, in January 2025, African Export-Import Bank announced plans to support Nigerian airlines with 25 aircraft through a leasing subsidiary using dry-lease financing, though there has been no fresh update on the proposal since then.

Nigerian airlines threaten April 30 shutdown over soaring Jet A1 prices

Meanwhile, TheRadar earlier reported that the domestic airlines in Nigeria planned to suspend operations from Thursday, April 30, 2026, as operators warned that the soaring cost of aviation fuel has pushed the sector to the edge of collapse.

The planned shutdown, if carried out, could trigger major travel disruptions nationwide and leave thousands of passengers stranded.

Industry sources say local carriers are preparing to ground flights after talks with the Federal Government and fuel marketers failed to produce a workable solution to the worsening Jet A1 crisis.