Airbus to facilitate access to aircraft financing for Nigerian carriers
- Tells operators to cater for local market
Aircraft maker, Airbus said it is committed to working closely with Nigeria to explore innovative solutions, seize opportunities, and capitalise on the potential of Nigeria.
Airbus’ Vice-President of Sales, Africa, Hadi Akoum in an appreciation letter to the Minister of Aviation and Aerospace Development, Mr. Festus Keyamo dated March 20, 2023, stated that in the upcoming weeks, the company will diligently follow up on the pivotal topics covered during his visit, such as facilitating access to foreign currency for airlines acquiring new aircraft and resolving the requirement for airlines to obtain local insurance for foreign-financed aircraft.
This proactive approach, he noted will advance their mutual objectives of enhancing Nigeria’s air transport sector with modern, eco-friendly aircraft, thereby reducing operational expenses and mitigating environmental impact.
“At Airbus, we believe Nigerian airlines should cater for their market; hence we are enthusiastic about continuing our partnership with Nigeria to support the growth and development of its aviation sector.”
Keyamo and his team made up of key aviation agencies’ Chief Executive Officers and some stakeholders had visited France to seek aircraft financing options with Airbus, to Thales, the provider of the Total Radar Coverage of Nigeria (TRACON) on how to assist the country to upgrade the critical airspace safety tool among other areas of support for Nigeria’s aviation industry.
Akoum said, “The discussions we engaged in regarding the future of aviation in Nigeria were both enlightening and inspiring. It was evident from our conversations that Nigeria possesses great potential in the aviation sector, and we are excited about the possibilities that lie ahead”.
“Your proactive approach to addressing key issues such as aircraft financing and insurance matters reflects your commitment to fostering a thriving aviation industry in Nigeria.”
“Again, thank you for honouring us with your visit to Airbus in Toulouse. We look forward to the prospect of further collaboration and the exciting journey ahead in shaping the future of aviation in Nigeria,” he added.
The Federal Government has said it was currently discussing with aircraft leasing and manufacturing companies in a move to stimulate local investments in the country’s aviation sector.
The Minister reiterated that the significance of aircraft leasing, especially dry leasing, was a key factor in enhancing the operations of local operators in the airline industry.
He mentioned that major airlines worldwide relied on dry leasing, as no airline or government could fully afford to purchase its entire fleet of aircraft.
“We are determined to go far and wide to woo aircraft leasing companies and aircraft manufacturers to come to our aid. There is no shame in doing this now since we cannot produce our aircraft or purchase them,” said Keyamo.
There are several challenges to aircraft financing in Nigeria including but not limited to multiple charges by the regulator, high operation costs including bank interest rates, multiple taxation and a lack of understanding of the sector by local financial institutions.
These factors have led to the loss of various local airlines and a reduction in operating aircraft in Nigeria from 90 in 2015 to 53 in 2019.
Nigeria’s aviation industry is being threatened by the fast depreciating operating equipment, occasioned by the challenges faced by Nigerian carriers in acquiring or leasing aircraft to replace old ones.
Recently, the Chief Operating Officer of United Nigeria Airlines, Mr. Osita Obiorah disclosed that high country risk and the bad reputation of some airlines that failed to abide by lease agreements in the past made aircraft leasing very costly in Nigeria.
He further disclosed that aircraft lessors have stopped aircraft dry leases in Nigeria, which enables an airline to lease an aircraft for a long time, register it locally and operate it with its full crew.
He however said the Minister had advanced in his negotiation with lessors and aircraft manufacturers to review the country risk clamped on Nigeria and also to withdraw the decision not to allow dry or long-term lease to Nigerian carriers.
The minister had met with the international lobby group to prompt the lessors to remove Nigeria from their blacklist and this includes Aircraft Leasing Group (ALG) comprising the two largest aircraft makers, Airbus and Boeing.
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