Olowo-Sokeye: Aviation Can’t Fly Without Finance

Finance analyst, Mary Olowo-Sokeye, has called for bold and innovative funding strategies to reverse the operational inefficiencies threatening the sustainability of the aviation sector.

Speaking at the 29th League of Airport and Aviation Correspondents (LAAC) annual aviation seminar with theme, “Financing Aviation in Nigeria: Risks, Opportunities and Prospects,” which drew a high-powered audience of policymakers, airline executives, regulators, financiers, and infrastructure experts, she said aviation is the lifeblood of trade and tourism—but without financing, it simply cannot fly.

Representing the Chairman of Sabre, West Africa, Dr. Gabriel Olowo, a revered aviation expert who recently marked 52 years of service in aviation, Olowo-Sokeye, urged stakeholders to confront the sector’s funding shortfalls with urgency and creativity.

Delivering a presentation titled “Financing Options for a Sustainable Aviation Future”, she urged operators to break away from outdated funding models and adopt innovative approaches to financial structuring, Olowo-Sokeye—who brings over two decades of financial experience, including work with GE Capital’s aviation division—outlined the stark contrast between Nigeria’s aviation performance and global standards.

She said, “Nigeria’s operational success rate stands at just 48%, far below the international benchmark of 81%. Aircraft are not cheap. Neither is their maintenance, nor the innovation needed to run them,” she told stakeholders.

“To fund aviation sustainably, we must review our financial health, understand market conditions, and explore creative funding mechanisms.”

She said. “This gap isn’t due to a lack of talent or passengers—it’s a financing problem.”

She cited key reasons for the poor performance: ageing aircraft, inadequate maintenance, infrastructure deficits, and economic pressures such as fuel scarcity and exchange rate volatility.

Speaking of the challenges ahead, she lamented that at least 14 Nigerian airlines have folded since 1990 due to poor financial structure and safety issues.

“Cost reduction should never compromise safety. Nothing destroys an airline faster than an accident,” she cautioned.

Citing Dr. Olowo’s book, Cutting Costs Without Cutting Corners, Olowo-Sokeye urged stakeholders to adopt sustainable cost-saving strategies without jeopardising safety or compliance. “Everything I’ve said today is well captured in Dr. Gabriel’s book,” she added.

She emphasised equity financing as a viable option for airlines looking to expand their networks or diversify operations. This model involves raising capital by offering ownership shares to investors.

“Equity financing is ideal for expansion,” she explained. “It lets you bring in strategic partners and raise long-term funds without increasing debt obligations.”

Startups and smaller carriers with limited borrowing capacity can particularly benefit from this structure, which avoids interest burden while strengthening shareholder value.

While traditional debt financing remains essential for major capital investments like aircraft purchases, she noted that airlines can take out corporate or institutional loans, often secured with collateral, to fund operations or expand fleet size.

“With aircraft loans, you enjoy benefits like tax deductions, flexible payment structures, and depreciation,” Olowo-Sokeye said.

“But you must have strong liquidity and a healthy cash flow to manage repayments.”

She warned that airlines pursuing this route must maintain financial discipline and have contingency plans for currency fluctuations and interest rate volatility.

She stated that a more flexible model gaining traction is the sale and leaseback arrangement, adding that this involves an airline selling an owned aircraft to a third party and leasing it back to maintain operational control while freeing up cash.

“A sale-leaseback unlocks liquidity, allows flexible financial planning, and offloads asset management burdens,” she said. “However, lease payments can be steep, and you lose long-term asset value.”

These strategic financial options, he reiterated, are increasingly popular among Nigerian operators looking to optimise cash flow while keeping aircraft in service.

Olowo-Sokeye identified export credit-backed financing as an underutilised but high-potential option for Nigeria. It involves securing international loans at lower interest rates, backed by government credit guarantees.

Wole Shadare