Recently, Nigeria’s aviation sector came under the spotlight as experts and stakeholders at the 29th annual conference of the League of Airport and Aviation Correspondents (LAAC) called for sweeping reforms in the nation’s aviation financing model.
The conference, brought together policymakers, regulators, and operators who warned that without urgent intervention, the sector’s growth potential would remain stifled.
With the Theme: Aviation Financing in Nigeria: The Risks, Opportunities and Prospects”, discussions at the gathering revealed deep concerns about the high cost of borrowing and stringent collateral requirements that continue to frustrate airlines and investors.
In a communique issued and signed by the chairman of the conference, Mr. Wole Shadare, participants argued that the capital-intensive nature of the industry, covering infrastructure, aircraft acquisition, maintenance, and workforce development demands a more innovative and sustainable funding approach.
One of the strongest recommendations was the creation of an Aviation Development Bank to serve as a dedicated financial backbone for the sector.
Such an institution, experts said, would ease the industry’s over-reliance on traditional lenders whose unfavorable terms often discourage long-term investment.
Alongside this, calls were made for the adoption of creative financing models, including leasing options, sovereign-backed funds, and targeted foreign direct investments, provided they are underpinned by consistent government policy and transparent regulation.
Stakeholders also decried the crippling cost of doing business in Nigeria’s aviation industry, particularly the exorbitant insurance premiums imposed on local operators.
Delegates noted that insuring one aircraft in Nigeria often costs as much as covering seven similar aircraft elsewhere in the world, a situation attributed to negative risk perceptions.
While commending ongoing government efforts to rebuild trust with international lessors, participants insisted that stronger reforms were needed to eliminate the stigma surrounding Nigerian carriers.
Industry consolidation also dominated discussions, with experts emphasizing that the collapse of no fewer than 14 Nigerian airlines over the years was largely due to weak collaboration among operators.
They stressed that establishing competitive hubs in Lagos and Abuja, anchored by at least three strong domestic carriers, would be critical to ensuring sustainability and positioning Nigeria as a regional aviation powerhouse.
The conference further emphasized the importance of financial discipline, regulatory compliance, and strategic government intervention focused more on policy and oversight than direct airline operations.
Stakeholders advocated airport concessions through public-private partnerships as a path to fiscal sustainability, alongside the creation of a unified aviation data bank to enhance collaboration, reduce risks, and improve revenue generation.
In wrapping up, participants agreed that the future of Nigeria’s aviation sector rests on sustainable financing, regulatory stability, and deeper cooperation among all players in the industry.
Without these, they cautioned, the country risks missing out on the vast opportunities that a vibrant air transport system offers for national development.
Reporting by Nosa Aituamen