*Govt to set up aircraft leasing company to support local airlines

Chinedu Eze

Nigeria broke a jinx yesterday when Air Peace Airlines received a commercial aircraft on dry lease from world’s biggest leasing company, Aer Cap, after over 10 years lessors blacklisted Nigerian carriers for not keeping with the terms of leasing agreement in the past.

The dry lease was facilitated by federal government’s guarantee, indicating that it would be held responsible if Air Peace falters on the terms of contract.

Also, the federal government has disclosed that it is working on establishing a leasing company with the objective to empower Nigerian airlines by serving as an intermediary between them and international lessors, with the government providing a sovereign guarantee to facilitate transactions.

Over the years, Nigerian airlines have been leasing aircraft on wet lease arrangement which is three times costlier than dry leasing, short term with lessor’s crew operating and maintaining the aircraft; unlike dry lease, which is long term with the lessee, the airline, managing the aircraft in terms of maintenance and crew.

Minister of Aviation and Aerospace Development, Festus Keyamo, during the ceremony to celebrate the delivery of the aircraft, a Boeing 737-700 at the Murtala Muhammed Airport Terminal 1 (GAT) in Lagos, described the arrival of the dry lease aircraft in Nigeria as a great achievement.

“This is a momentous occasion for Air Peace and the Nigerian aviation industry. It demonstrates the government’s commitment to supporting local carriers and promoting the growth of the aviation sector.”

The Minister commended Air Peace for its discipline and financial prudence, which have enabled the airline to achieve this significant milestone and emphasised the need for local airlines to acquire more aircraft to compete effectively in the international market.

“There is a need for the acquisition of more wide-body aircraft by local operators to compete in the international space,” Keyamo said.

Keyamo also explained that the proposed aircraft leasing company will enable local airlines to access aircraft without having to navigate the complex global market alone.

“We want to put an aircraft leasing company in place, so that Nigerian airlines will not be the ones negotiating with the world. We don’t have to walk in silence again. The airlines don’t need to walk around the world looking for aircraft. Government must take care of that responsibility. With the government’s sovereign guarantee, the project is expected to attract investors from around the world, creating a pool of resources that will support local airlines.

The Minister also explained that the leasing company will form a capital base with funding from government and other investors and with contributions from airlines who wish to invest in the project.

“This pool will form a capital base. No other person can be the off takers before the local airlines. This will make life easy for the airlines. We’ll be knocking on the doors of aircraft lessors and manufacturers very soon to talk business. We are here to support the local airlines.”

The Minister said the establishment of the aircraft leasing company is expected to have a significant impact on the Nigerian aviation sector, enabling local carriers to compete more effectively with their international counterparts, noting that with the government’s support, Nigerian airlines will be able to access modern, fuel-efficient aircraft, enhancing their operational efficiency and safety standards.

Chairman and CEO of Air Peace, Dr Allen Onyema, said the journey of securing an aircraft through dry lease started at the Minister’s office, disclosing that the Minister saw the importance of having a vibrant aviation sector and realised that the growth of the industry would be determined by the strength of domestic operators; so, he decided to help them build capacity

Onyema said Air Peace has been very diligent in ensuring its aircraft are properly maintained, stressing that it would continue to represent Nigeria well at the international space.

“We make sure that our maintenance is top-notch. We are here on behalf of other Nigerian airlines. We are carrying the visions and aspirations of this country and if we fail, it will be a disgrace. Given the support we have received from all arms of government and the Nigerian public, I believe we won’t fail our country,” Dr Onyema said.

Onyema commended Festus Keyamo for his relentless efforts in supporting local airlines.

“Like him or hate him, the Minister has changed the face of the country’s aviation industry. In the eight years before he came, it was a struggle for Nigerian airlines. When the Minister came on board, he noticed a gap and fixed it. Before now, the mantra was that Nigerian airlines lack capacity therefore let us invite foreign airlines to take over. He looked at what to do to support Nigerian airlines so that they can compete. The President also gave the marching order to make this happen,” Air Peace Chairman said.

Executive Director, of Fidelity Bank Plc, Kelvin Ugwoke, spoke about Air Peace prudent management of its finance, saying that the airline efficiently manages its credit facilities. Fidelity Bank is long term partner of Air Peace which bankrolled the acquisition of the aircraft.

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