Inconsistency as FG dumps Nigeria Air for aircraft leasing venture

Contrary to earlier insistence by the Federal Government that the hitherto abandoned Nigeria Air project will be revived again, the same government has jumped to another aviation scheme, saying it set up an aircraft leasing company to help domestic and African carriers obtain new planes and is seeking private partners for the venture.

The government argued that because most airlines in Nigeria want to expand their fleets, but were failed by high financing costs and currency risks, it will set up the leasing venture to boost domestic capacity in aviation sector.

While maintaining sealed lips on way forward for the abandoned Nigeria Air project, Government said the leasing venture plan was to help local airlines to beat the currency exchange challenge which hampers their growth plan as Nigerian airlines’ revenues are in naira, while most of their operational expenditures are in U.S. dollars.

The government further revealed that the new venture company would initially lease aircraft from international lessors and sub-lease them to domestic operators. It wants the partner to be a consortium of international lessors, financial institutions and investors, and said bidders had until May 20 to show interest, saying majority of the state will be government owned.

However, analysts say the government’s logic in setting up the leasing venture may not fly as some domestic airlines including Air Peace are already making strong inroads in refleeting as it has in the last few months sealed a number aircraft supply deals.

Also, another airline, Aero is almost concluding plans to invest in hanger and repairs as part of industry expansion plan.

Besides, Medview Airline is now concluding understanding with some financial institutions to raise capital to power its short-term growth prospects.