Nigerian Airlines To Receive 25 New Aircraft Via Afreximbank’s Dry Lease Financing

Nigerian Airlines To Receive 25 New Aircraft Via Afreximbank’s Dry Lease Financing

The African Export-Import Bank (Afreximbank) plans to support Nigerian airlines with 25 aircraft via a leasing subsidiary, using dry lease financing to boost their competitiveness.

The dry lease financing model allows airlines to lease aircraft without crew, maintenance, or insurance, offering greater operational control.

Mrs. Helen Brume, Director of Project and Asset-Based Finance at Afreximbank, announced the initiative at the close of the Airline Economics Growth Frontiers Global conference in Dublin on Wednesday, which gathered aviation experts from around the world.

The News Agency of Nigeria (NAN) reported the announcement on Thursday.

The initiative aims to fill gaps in aviation infrastructure, improve competitiveness, and enhance domestic operations and Bilateral Air Service Agreement (BASA) routes.

“This initiative aims to provide Nigerian airlines with access to dry-leased aircraft, enabling them to better service Bilateral Air Service Agreement (BASA) routes and domestic operations, “ she said.

Brume also highlighted Afreximbank’s extensive experience in supporting African airlines, including Arik Air, Kenya Airways, and TAG Airline, over the past two decades.

The NAN report further highlighted that Ms. Lereece Rose, Boeing’s Senior Director of Finance, commended Nigeria’s Minister of Aviation, Festus Keyamo, for fostering an enabling environment for aircraft financing by raising the country’s Cape Town Convention score from 49.5% to 75.5%.

This improvement underscores Nigeria’s commitment to advancing the aviation sector.

Notably, Nigeria now leads Africa in Cape Town Convention compliance, securing the top position with a score of 75.5% and a High category rating.

Keyamo emphasized the importance of partnerships to enhance access to aircraft financing, which he believes will drive growth and improve service delivery for Nigerian airlines. He also announced the establishment of a committee to follow up on discussions and ensure practical solutions for operators.

Since assuming office under President Bola Tinubu’s administration, Minister of Aviation Festus Keyamo has worked to enable Nigerian airlines to secure aircraft on favourable dry lease terms, moving away from the wet lease arrangements that many currently rely on.

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. Past defaults by Nigerian airlines, who sought court injunctions to prevent aircraft repossession, further complicated matters.

However, Nigeria’s compliance with the Cape Town Convention has significantly improved, with the country’s score rising from 49% to 75.5%. This milestone, along with Nigeria’s exit from the AWG watchlist in October 2024, has opened doors for Nigerian airlines to access global aircraft leasing markets.

The issuance of the Federal High Court’s Practice Direction in September 2024 has further boosted compliance by introducing binding rules and timelines for enforcing foreign court orders.

In support of this progress, Afreximbank has pledged to assist Nigerian airlines with dry lease aircraft, while Boeing has committed to partnering with global financiers to help secure aircraft insurance.

However, discussions are ongoing with the National Insurance Commission (NAICOM) to allow dry lease risks to be covered outside the local insurance market, a key requirement to facilitate the entry of dry-lease aircraft into Nigeria.