FG Approves Nigeria Aircraft Leasing Company to Expand Airline Fleet Access

The Federal Government has approved the establishment of the Nigeria Aircraft Leasing Company to improve domestic airlines’ access to aircraft and strengthen the country’s aviation sector.

The Minister of Aviation and Aerospace Development, Festus Keyamo, disclosed this via his official X account on Friday, noting that it was among the resolutions approved at Thursday’s Federal Executive Council meeting.

The initiative is expected to create a sovereign-backed leasing structure that will help Nigerian carriers acquire or lease aircraft more easily, reduce operational disruptions, and improve competitiveness against foreign airlines.

What they are saying

According to Keyamo, the new company will operate as a Special Purpose Vehicle (SPV) that will be fully funded and run by private investors, while benefiting from strategic government backing without placing direct financial obligations on the Federal Government.

He said the government’s role will largely involve providing sovereign guarantees to international aircraft lessors and manufacturers, particularly around repossession rights, to reduce investment risks and attract global financiers.

• “Just yesterday, I secured the approval of the Federal Executive Council, presided over by the President, for the establishment of the Nigeria Aircraft Leasing Company.  
• “The company will be an incorporated Special Purpose Vehicle that will be fully privately funded, commercially operated, and impose no obligation on the Federal Government to invest, but will enjoy strategic government backing,” his tweet read in part.

Keyamo added that the structure would allow Nigerian airlines to access aircraft through a single credible platform rather than individually struggling in the global leasing market.

He said this would help address persistent fleet shortages that have driven delays, cancellations, and heavy reliance on costly short-term wet leases.

More insights

The minister noted that the initiative is also aimed at strengthening domestic carriers’ ability to serve local routes and reducing foreign airlines’ dominance of about 95% of Nigeria’s international passenger traffic.

• He also disclosed that the Federal Government, through the Ministry of Finance Incorporated (MOFI), will hold equity in the company in exchange for its guarantees, allowing the state to benefit commercially while supporting sector growth.
• Keyamo added that several African financial institutions and private investors have already expressed interest in the project, pending formal approval.

He further said Nigeria’s large population, strategic location, and strong air traffic demand make it a highly attractive aviation market that the leasing company will help unlock.

Expert insights

Shiekuma Gemade, Executive Vice President and Chief Operating Officer of Aircraft Finance Germany (AFG), told Nairametrics in a separate industry chat that Nigeria would benefit from a coordinated, sovereign-backed approach to aircraft leasing—similar to the structure now approved.

Drawing on his experience at Riyadh Air, where he oversaw fleet acquisition and planning, Gemade said countries that treat aviation as a national strategy tend to secure better financing terms, faster deliveries, and stronger fleet expansion outcomes.

• He cited Saudi Arabia as an example, where government-backed negotiations with manufacturers such as Boeing and Airbus improve aircraft access and delivery timelines.
• In contrast, he noted that airlines in markets without sovereign coordination often face long delivery delays, limited financing options, and heavy reliance on expensive short-term leases.
• Gemade said a centralized leasing structure backed by government guarantees could help address Nigeria’s fleet shortages, wet lease dependence, and operational disruptions by providing airlines with a single credible access point.

He added that countries such as Ethiopia, Kenya, Morocco, South Africa, and Egypt demonstrate how sustained aviation planning can support broader economic growth.

However, he stressed that success would depend on consistent coordination across aviation, finance, taxation, and regulatory frameworks to build investor confidence.

What you should know

For years, Nigerian airlines struggled to access dry-lease aircraft due to the country’s blacklisting by the Aviation Working Group (AWG) over non-compliance with the Cape Town Convention, as well as past disputes involving aircraft repossession.

• Nigeria’s compliance has since improved, with its score rising from 49% to 75.5%, while its exit from the AWG watchlist in October 2024 reopened access to global leasing markets.
• The dry-lease model allows airlines to operate aircraft without the operational constraints of wet leases, giving them greater control over schedules and operations.
• Since the exit from the AWG, Air Peace remains the only Nigerian carrier to have secured an aircraft under a dry lease arrangement, achieved in October 2025.

In January 2025, the African Export-Import Bank (Afreximbank) announced plans to support Nigerian airlines with 25 aircraft through a leasing subsidiary using dry-lease financing, although there has been no update since then.