State-owned airlines signpost new era in Nigerian aviation

• Survival higher if professionally run
• Stakeholders: Ibom Air model for state carriers
• Lagos, Anambra, Ebonyi, others moot idea

 

In a significant shift within Nigeria’s aviation sector, a growing number of state governments are moving beyond airport development and are now actively establishing or partnering to set up their own airlines.

This trend, spearheaded by successes such as Ibom Air, signals a renewed government interest in a sector previously dominated by private enterprise following the liquidation of the national carrier, Nigeria Airways, in 2003.

Stakeholders in the aviation industry told Aviation Metric that several key factors, including economic stimulation and connectivity, drive Nigerian state governments’ decision to enter the highly capital-intensive airline business.

To them, the establishment of state-backed airlines is viewed as a catalyst for economic growth.

They noted that by offering more direct flight options, these airlines enhance interstate connectivity, ease business and investment travel, and stimulate commerce in underserved regions.

The Nigerian domestic airline market has historically been turbulent, marked by the frequent collapse of private carriers due to various challenges, such as a lack of capital, infrastructure, unfavourable government policies, exorbitant taxes and levies, the absence of maintenance facilities in the country and the high cost of operations and access to foreign exchange.

State intervention aims to provide stability, enhance competition, minimise persistent issues like flight delays and cancellations, and ensure better service delivery because of the enormous resources of the state to easily acquire its own aircraft by preventing airline-lessor crisis like the sector witnessed a few weeks ago, when SmartLynx, Air Peace’s lessor, suddenly withdrew the airline’s four jets.

State-backed airlines have sovereign guarantees that make it less complicated for them to acquire aircraft and are highly credible to do business with, unlike private individuals whose financial standing may be in doubt.

These ventures by the state government create both direct and indirect employment opportunities within the aviation ecosystem, ranging from flight crew and engineers to ground staff and administrative roles.

The current wave of state involvement began to gain prominence with the launch of Akwa Ibom State’s airline, often cited as a model of success.

Launched in 2019, Ibom Air is currently the most prominent and successful example. It is entirely funded by the Akwa Ibom government and has demonstrated a commitment to good corporate governance and professional management, achieving profitability and earning a reputation for reliability.

The airline is targeting revenue of ₦150 billion for the year 2025. This represents a significant increase from its 2024 revenue of ₦96 billion. This target was announced by the airline’s CEO, George Uriesi, in mid-2025.

Cally Air, owned by Cross River State, was launched in 2021. This arrangement involves a partnership in which the state-owned airline is operated under an agreement with an existing operator, ValueJet, utilising a leasing and operational services model.

Enugu Air (Enugu State) was launched in 2025. It is operated in partnership with XEJet Airlines, aiming to position Enugu as a future aviation hub.

The airline is very ambitious, with plans to expand its domestic network to cities such as Port Harcourt, Owerri, Benin, and Kano, while also adding international routes to Africa, China, Europe, the UK, the US, and other major global hubs.

The carrier is becoming an airline of choice among travellers because of its professional operation, and it is also set to take delivery of six more aircraft by the end of 2025 to support this expansion. These plans are part of Enugu State’s strategy to strengthen its aviation sector, boost connectivity, and attract investment.

Ogun State is in the process of setting up Gateway Air. The state recently entered an operational partnership with ValueJet for commercial flights.

Bayelsa State has officially commenced commercial flight operations with its state-owned aircraft, operated by Pioneer Airlines, marking a significant milestone in the state’s transportation and economic development. The inaugural flight landed at Bayelsa International Airport from Abuja on November 26, 2025.

Additionally, states like Lagos, Ebonyi, and Anambra have all indicated strong interest or are actively exploring plans to establish their own carriers or strategic partnerships.

While the success of Ibom Air offers an encouraging blueprint, the path for state-owned airlines is fraught with systemic difficulties, such as high operational costs, multiple taxation, levies, and infrastructure limitations, that have plagued Nigerian carriers.

Historically, government-owned enterprises in Nigeria have suffered from poor management and bureaucratic interference.

The sustainability of the new state-backed airlines, experts say, hinges on their ability to maintain operational independence and strong corporate governance, avoiding the fate of the defunct Imo Air.

A former Managing Director of Aero Contractors Airlines, Capt. Dapo Olumide said he supports Ogun State setting up its airline, Gateway Air.

He said, “What are the challenges of aviation in Nigeria? Access to aircraft. What do I mean by access to aircraft? There are aircraft on the market not just because Nigeria was blacklisted, but also because we don’t even have the money to continue paying the monthly leases or the security deposit, because we are very unreliable. We like to borrow money from banks, but we don’t like to pay it back.”

“So, when it comes to leasing aircraft, they don’t trust us, so they put a huge security deposit down. Let us say the monthly lease is $100,000. Some might pay a 10-month security deposit. That’s $1 million. Because they know you might miss one or two payments, we’ll draw it from that escrow account. That is problem number one.”

“Problem number two is that with the pockets of the private airlines, which I have always said is a problem in Nigeria, you can’t have an airline owned by individuals. It has to be owned by a board of independent directors, not by a family, not by a husband, wife, and firstborn, which is what the airlines here do. Therefore, there’s no financial management structure.”

“As a proponent of national airlines, you have the sovereign guarantee of the Federal Republic of Nigeria, the central bank, and the debt management office. So, there’s no security deposit on the aircraft, because the lessor knows that he can get the money from the Federal Government. Therefore, access to funds is cheaper, because you don’t have to borrow the money for the security deposit for nine months or whatever it is.”

“Above all, you must never start a state-run airline in Nigeria with ownership. You have to transfer ownership of the operation to an existing airline with the experience, capabilities, and so on. Because a state government has no business running an airline. Now, Ibom Air is successful because the state government is not involved in running the airline, as is the case with Ethiopian Airlines. The government owns Ethiopian Airlines, but the government does not run it. So, Ibom Air is owned by the state but run by private individuals who have a say in its operations.

A former Rector, Nigerian College of Aviation Technology (NCAT), Zaria,  Capt. Samuel Caulcrick said all these airlines would be fishing from the same pond, saying he doesn’t know how they can survive with operational costs and that the economics of the state are no longer there unless they come together.

“If they understand that they cannot survive. The competition will be stiffer, and they cannot survive on their own unless they codeshare. If you miss my flight, you can jump on the other one, “ Caulcrick added.

Aviation consultant and Managing Director of Belujane Konsult, Mr Chris Azu Aligbe, said states are setting up airlines because the existing private airlines do not have the capacity to meet the travel needs of passengers to most destinations in the country.

 

He noted that the push by Nigerian state governments to launch airlines represents an ambitious effort to reshape the domestic aviation landscape, enhance regional connectivity, and stimulate local economies.

He, however, stated that their long-term success will ultimately depend on navigating the complex financial, operational, and governance challenges inherent in the Nigerian aviation ecosystem.

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