FG to Launch Aircraft Leasing Company Backed by Sovereign Guarantee and Small Equity Stake

• Aims to lower risk for lessors, ease aircraft access for local airlines

The federal government yesterday announced plans to establish a new aircraft leasing company that will be backed by a sovereign guarantee, while the government will take only a modest equity stake.

Festus Keyamo, Minister of Aviation and Aerospace Development, explained that the initiative is not intended to bail out airlines directly. Instead, the guarantee will cover two key areas: the legal title and safety status of the aircraft, and the right to repossess the aircraft if the lessee defaults.

The government will hold a 5 % to 10 % equity position in the leasing vehicle, allowing it to benefit from its enabling role rather than operate the airline itself.

Keyamo made the remarks during a high‑level meeting with airline operators and aviation stakeholders in Abuja, where the discussion focused on the Nigeria Aircraft Leasing Company.

He said the structure was designed to solve a long‑standing problem for foreign lessors: “Previously, even after the Nigerian Civil Aviation Authority deregisters an aircraft, other agencies such as customs could block repossession on legal grounds. The sovereign guarantee would bind all government agencies to cooperate on repossession, with the government itself liable if they fail to do so.”

Keyamo added that the special purpose vehicle for the leasing company is currently being incorporated, with completion expected in weeks rather than months. “Fundraising is underway, and officials report global investor interest, though they declined to give a firm financial close date,” he said.

Speaking on foreign exchange, Keyamo explained that the arrangement is intended to reduce pressure on foreign‑exchange reserves and outflows. “The government is not putting one kobo on it. The government is only providing a sovereign guarantee for the safety of those aircraft and for repossession,” he said. “And for that, the government will hold a minimum equity in the company. The government is earning money from it because of the role it’s going to play.”

He continued, “Now, whether it’s going to be five or 10 percent, the Minister of Finance, the Attorney General, myself, we shall all decide. But it’s going to be a very minimal share equity.”

Keyamo noted that the guarantee is necessary because deregistration by the NCAA alone is insufficient to export an aircraft. “After the NCAA deregisters, customs will come in and give all kinds of stories,” he said.

He added, “I have explained this before in my previous press interviews, especially the one I granted after the approval we secured from the Federal Executive Council about three or four weeks ago.”

Keyamo emphasized the importance of briefing airline owners, stating that they will ultimately be the off‑takers of the leasing company. “One of our major objectives as a government is to see to the survival and stability of the local airlines,” he said.

He explained why this is a priority: “It’s simply because it is only in Nigeria and the whole of Africa that you have this volume of private operators. All over Africa, all other major airlines are run by governments. There’s no single country in Africa that has plenty of airlines run by private people.”

“All the other airlines we hear of, whether Morocco Air, Egypt Air, Rwanda Air, Uganda Air, South Africa Air, all of them are run or subsidised by governments,” Keyamo continued. “So the government’s duty in Nigeria, therefore, since we don’t own a national airline, we don’t subsidise one, is to ensure that the sector that we preside over, run by private people who are Nigerians, for Nigeria, who employ Nigerians, and for the benefit of the economy, we must support them to make them stable and make their businesses thrive.”

He concluded that the establishment of the special SPV, approved by the president, is meant to give local operators the fullest support from the government to acquire aircraft. “The major problem of the local operators has been how to acquire their helicopters, their aircraft, for their different operations,” he said. “It’s not only for their businesses. Once they acquire more aircraft, it helps, one, to cut down on the constant cancellation of flights you hear in Nigeria.”

Speaking on behalf of the Airlines Operators, the Managing Director/Chief Executive Officer of Ibom Air, George Uriesi, thanked Keyamo for his intervention. “Already our hands are tied behind our back in the wrestling ring. What he’s done is he’s untied our hands by providing us a Nigerian leasing company that not only will provide us access to aircraft at way reduced interest rates, we’ll be paying it in naira,” he said.