FG approves aircraft leasing company to boost Nigerian airlines’ fleet access

The Federal Government of Nigeria has approved the establishment of a national aircraft leasing firm aimed at improving domestic airlines’ access to planes and strengthening the aviation sector.

Minister of Aviation and Aerospace Development, Festus Keyamo, announced the decision following a meeting of the Federal Executive Council, chaired by President Bola Ahmed Tinubu.

According to Keyamo, the proposed Nigeria Aircraft Leasing Company will operate as a privately funded Special Purpose Vehicle (SPV), backed by government guarantees rather than direct public funding. The structure is designed to attract international aircraft lessors and financiers while reducing the risks that have historically discouraged investment in Nigeria’s aviation market.

At its core, the initiative seeks to address a long-standing challenge: Nigerian airlines’ difficulty in acquiring aircraft on favourable terms. Many carriers have struggled with fleet shortages, forcing them to rely heavily on expensive short-term wet leases, which often contribute to flight delays, cancellations, and high operating costs.

By providing a single, credible leasing platform, the new company is expected to simplify access to aircraft, improve operational efficiency, and enhance the competitiveness of local airlines against foreign carriers. Industry data shows that international airlines currently dominate up to 95% of Nigeria’s international passenger traffic, a gap the government hopes to narrow.

The government’s role will largely centre on issuing sovereign guarantees, particularly around aircraft repossession rights, a key concern for global lessors. In return, the Ministry of Finance Incorporated is expected to take an equity stake in the company, allowing the state to benefit commercially while supporting sector growth.

The approval also builds on recent improvements in Nigeria’s aviation credibility. After years of restrictions linked to non-compliance with global leasing standards, the country exited the Aviation Working Group watchlist in 2024, reopening access to international leasing markets.

Experts say a coordinated, government-backed leasing structure could be a turning point. Countries that treat aviation as a strategic sector, such as Ethiopia and Saudi Arabia, have been able to secure better financing terms, faster aircraft deliveries, and stronger airline growth.

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For Nigeria, the success of the new leasing company will likely depend on consistent policy coordination across aviation, finance, and regulatory systems. But if effectively executed, it could ease one of the biggest structural bottlenecks in the industry, access to aircraft, and unlock growth across the country’s air transport ecosystem.