Nigeria’s aviation industry is once again at an inflection point—but this time, unlike previous cycles of lofty talk and no action, stakeholders say it could be different.
The ceremonial arrival of Air Peace’s first dry-leased Boeing 737-700 NG at the Murtala Muhammed Airport Terminal 2 (MMA2), Lagos, on Wednesday, was not merely the addition of another aircraft to the Nigerian registry.
It became the platform where Festus Keyamo, the Minister of Aviation and Aerospace Development, made a concrete declaration that may alter the economics and survival prospects of Nigerian carriers: the Federal Government is setting up a sovereign-backed national aircraft leasing company—domiciled in Nigeria—exclusively to serve Nigerian airlines.
Keyamo did not mince words. “We want to put an aircraft leasing company in place so that Nigerian airlines will not be the ones negotiating with the world,” the minister declared.
He continued in very direct language, underscoring the magnitude of the structural shift his administration is proposing: “We don’t have to walk in silence again. The airlines don’t need to walk around the world looking for aircraft. Government must take care of that responsibility.
For decades, the absence of a leasing firm in Nigeria has been a major factor in keeping Nigerian airlines structurally weak, dollar-dependent, and uncompetitive.
Almost every aircraft in Nigeria today that is not owned outright is wet-leased or dry-leased from Europe, the Middle East, the United States, or Asia—with lease payments in dollars.
In a country where the naira has experienced one of Africa’s sharpest depreciations—losing well over 200 percent of its value between 2015 and 2024—that single reality alone has crippled balance sheets.
The Centre for Aviation (CAPA) estimates that globally 55 percent to 60 percent of the world’s commercial fleet is leased—and for many major airlines that proportion is even higher.
Ryanair and easyJet do not own the majority of their fleets. Delta and United lease aircraft. In fact, as Air Peace Chairman, Allen Onyema, told the audience: “Most big airlines don’t own some of the aircraft they use…” That is why you see one airline having about 400 planes. In Nigeria, every airline owner is expected to buy their own aircraft.” Nigeria is the anomaly—not the standard.
The Pain of Paying for Aircraft in Dollars with Naira Earnings
Today, Nigerian airlines generate 98 percent of their earnings in naira, according to several past NCAA economic reports. But, they sit on a huge portion of their cost base – especially leases, maintenance and spares – denominated entirely in dollars. This is why the industry is permanently in crisis each time the exchange rate worsens.
Airline owners have repeatedly testified that even when they generate good load factors domestically, currency swing alone can wipe out margins.
The Airline Operators of Nigeria (AON) has said repeatedly that up to 40 per cent of operational costs in Nigeria are exchange-rate exposure costs – purely because aircraft are not accessed through local structures.
This is why Keyamo’s proposal for a sovereign-backed national leasing company is a potentially transformative policy, if executed properly.
He explains the structure: “This pool will form a capital base. No other person can be the off-taker before the local airlines. This will make life easy for the airlines.”
He added that manufacturers and global lessors will be engaged with the government in front – so Nigerian airlines will not be “walking alone”.
Dancing to the Tune of Stakeholders
Indeed, Keyamo is not reinventing the wheel – he is responding to a long-standing sector demand.
At the recently concluded 2025 National Transport Summit in Lagos, the former President of the Aircraft Owners and Pilots Association of Nigeria (AOPA) – Dr Alex Nwuba – made the same argument.
Nwuba warned that Nigerian airlines cannot achieve scale when they are individually negotiating aircraft assets in foreign markets from a weak position.
He told delegates: “We need cheaper aeroplanes. The government can go to Japan and borrow at 0.2 percent or 1 per cent, use that money, buy from Boeing, or go to the U.S. and take advantage of its sovereign credibility to borrow at 2 or 3 per cent. Take that money.
“Buy us all the Boeings, Airbuses, and even the Chinese combat aeroplanes. Bring 500 airplanes to Nigeria and say to the airlines, okay, here are the airplanes.” Our markup is 2 percent, so you are going to get these aeroplanes at 4 percent, which continues to make you globally competitive.”
This is not the same with Keyamo’s idea, but a similar suggestion in that regard.
Air Peace’s Allen Onyema, whose airline is leading a fleet transformation push with 15 brand new Embraer E195-E2s already delivered and more on the way, acknowledged the Minister’s intervention as pivotal.
He said, “Like him or hate him, the Minister has changed the face of the country’s aviation industry. In the eight years before he came, it was a struggle for Nigerian airlines.”
Onyema reminded the audience that even the aircraft now dry-leased and newly arrived – was facilitated by government support, because government saw the macro importance.
The Bigger Picture
Nigeria remains the largest air travel market in West Africa. Nigeria accounts for over 60 per cent of all West African passenger traffic according to IATA’s West Africa region statistics.
Yet foreign airlines dominate international connectivity to and from Nigeria – because Nigeria’s domestic airlines have remained too small, too fragmented, and too financially constrained to scale up internationally.
Keyamo believes the leasing initiative will change that: “There is a need for the acquisition of more wide-body aircraft by local operators to compete in the international space,” he said.
In other words, the government wants to leverage leasing to give Nigerian airlines the equipment to compete, not merely to survive.
Could this be the Infrastructural Shift the Industry Needs?
Nigeria has tried oxygenating aviation before—interventions, waivers, forex windows. None fundamentally addressed the structural dollar cost base.
This leasing plan targets the foundation. If a Nigerian sovereign-backed leasing company emerges – with aircraft assets held in Nigeria – and lease payments in naira – this is the closest Nigeria has come to breaking the vicious cycle.
Cautionary Note
This will only work if political will is sustained, if governance is transparent, if the leasing outfit is professionally managed; and if the selection of fleet types is driven by economic analysis – not politics.
But for once, the industry seems aligned. A powerful idea has finally been tabled. If Keyamo follows through, the sector will remember this period as the moment Nigeria finally began to build aviation muscle rather than begging for oxygen.
SOURCE: INDEPENDENT
