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Nigeria’s promising carrier, Ibom Air received a major boost for aircraft financing as Zenith Bank and aircraft giant, Airbus have successfully closed financing for Ibom Air’s first A220, signaling a pivotal moment for African aviation.
With Zenith Bank’s commitment to supporting regional carriers and Airbus’s endorsement, this collaboration addresses funding challenges and fosters a sustainable aviation ecosystem in Nigeria and beyond, highlighting the continent’s promising aviation sector potential.
The agreement between Ibom Air and Zenith Bank, which was initiated by Airbus, is part of a broader shift that could provide much-needed financial momentum and signal a new era of financial support for the continent’s promising aviation sector.
“At Zenith Bank, we know how important the role financial institutions play in acting as economic enablers,” said Dr Ebenezer Onyeagwu, the Bank’s Group Managing Director. “We also understand how important the aviation sector is to facilitating economic growth in Nigeria and across the broader African continent. This landmark agreement solidifies our commitment to supporting regional carriers and advancing the landscape of African aviation financing.
“Securing adequate funding poses a significant hurdle for African carriers. Financing conditions for African Airlines are generally less favorable compared to other regions. Consequently, African airlines encounter challenges in acquiring and executing renewal and expansion initiatives.”
Ibom Air Chief Operating Officer, George Uriesi said aircraft financing is a collaborative effort and the support of regional banks is pivotal.
This synergy, he said fosters a sustainable aviation ecosystem, allowing us to soar higher and drive positive socio-economic impact in Nigeria and the broader continent, stressing that Nigeria is widely recognised as the African market with the highest growth potential and we aim to be at the forefront of that growth”.
According to the 2023 Airbus Global Market Forecast (GMF), airlines serving Nigeria will require nearly 160 passenger and freight aircraft in the next two decades.
This includes 131 single-aisle aircraft such as the A220, and A320 families, and 28 wide-body aircraft such as the A330 and A350 families.
“Over the past five years, more than 60 Airbus aircraft were delivered to the African continent via lessors and various financing structures. We are thrilled to now have Zenith Bank in the arena of new Airbus aircraft financiers,” said Boris Sakrauski Head of Customer Finance Airbus.
“We hope that its involvement in the sector sends a powerful signal to other banks and financial institutions in Nigeria and across the continent about the exciting potential of the African aviation sector.”
Speaking at a media briefing ahead of the 7th Aviation Africa Summit and Exhibition taking place in Abuja, Nigeria late last year, Airbus’s Marketing Director Joep Ellers said that “the future is bright for Africa” as he revealed the aviation sector growth on the continent will drive average yearly services demand up by 4.1% from $2 billion to $7 billion. Growing Maintenance, Repair & Overhaul (MRO) services at both regional and local levels are also central to the sector’s growth, safety, and longevity.
Airbus anticipated demand for 1,180 aircraft of over 100 seats for African airlines over the next 20 years. According to Airbus, 880 of these will be single-aisle types with 300 wide-bodies. Airbus expects to be awarded at least 50% of these orders when they materialise.
Airbus currently has 37% market share in Africa with 265 aircraft in operation with 36 of the continent’s airlines. It has 42% of the order backlog in Africa, totalling 41 aircraft.
It noted that Nigeria is Africa’s most populous country, noting that its aviation industry has the potential to fuel economic progress within the country, enhancing connectivity throughout the country’s diverse regions.
The expansion of MRO capabilities in the country it said could also serve to bring in additional revenues, reduce aircraft maintenance costs, and provide even further opportunities for job creation and skills development both in Nigeria and the continent at large.