In response to the growing challenges faced by Nigerian airlines in regards to leasing and maintenance of aircraft, the Federal Government has unveiled plans to set up an aircraft leasing company that will be managed by private investors.
The aircraft leasing company will be established to help domestic and African airline operators to obtain new planes, thereby reducing the impact of foreign exchange on these carriers’ cost of operation.
The benefit of the initiative: Nigerian airline companies earn their revenues is in naira, while their expenses for operation is in dollars. This has affected their growth pace and expansion drive. But this new initiative will cushion the high financing costs and currency risks threatening these airline operators’ growth.
How the leasing company will operate has been outlined by the Nigerian Government. According to a statement, the aircraft leasing company would sub-lease the jets to domestic operators after initially leasing them from international lessors.
The Government also plans to set up an aircraft maintenance facility in either Lagos or Abuja, in partnership with private operators.
Management of the leasing company: The Nigerian Government want the partners of the company to be a consortium of international lessors, financial institutions, and investors, according to the statement. The Government will also own a minority stake. Note that the window to apply as a bidder closes on May 20, 2019.
Privatising airports in Nigeria
In a bid to attract investment for the aviation industry, the Government plans to hand over airports to private managers. This move will also result in the overhauling of aviation infrastructure which has suffered underinvestment for decades.
FG begins plan to revive national carrier project
In the meantime, the Nigerian Government said it is planning to revive the suspended national carrier project — Nigeria Air. This is coming nearly six months after the Minister of State for Aviation, Hadi Sirika, informed Nigerians through his Twitter account that the Government has decided to suspend the National Carrier Project in the interim.