Nigeria: Firm to Invest U.S.$20 Billion in Aircraft Leasing Facility

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African Aircraft Leasing Company (AALC) plans to invest about $20billion in aircraft leasing facility in Nigeria. The proposed investment will enable indigenous airlines lease aircraft at cheaper rate and without the present cumbersome processes.

The facility would also include Maintenance, Repair and Overhaul (MRO) centre and spares logistics and supply as well as aggregated services solutions.

The investment according to the Executive Director, SpringFountain Infrastructure Limited, Mrs. Tokunbo Fagbemi is a partnership with the United States based aircraft manufacturer, Boeing Corporation.

During the agreement signing ceremony recently in Lagos between Boeing and SpringFountain Infrastructure, Fagbemi said the aircraft leasing facility that would be established in Nigeria would be the first in Africa and would create a robust window for Nigerian operators to access 200 Boeing aircraft in the next 20 years.

Fagbemi said currently, there is estimated 19 million passenger traffic per annum, which is projected to rise to over 44 million in the next 20 years, meaning that Nigerian airlines would make more demand on aircraft to be able to meet the rising demand.

"If Nigeria is to have 44 million passenger departures per annum, it will require over 100 aircraft to meet this propensity to travel, so Nigerian airlines will need more aircraft. To boost its international, including intercontinental flight potential, the airlines have to improve in both the quality and quantity of the aircraft. In addition, the aircraft have to be brand new to be at par with their competitors within Africa at the least", he said.

To enable the firm deliver on its proposed investment, Fagbemi said government should create an enabling environment for aviation business to thrive.

"We cannot overemphasise for government to create a right enabling environment for the African Aircraft Leasing Company (AALC), OEM led MRO centre, African Aircraft Spare Parts Company (AASC) and Aggregated Services Solutions provider to be able to list and trade on the Nigerian Stock Exchange, Aviation Asset Backed Securities (ABS), Enhanced Equipment Trust Certificates and other innovative tradeable monetary and debt instruments.

"Government should provide exemption from certain charges such as customs duties and grant us pioneer status, to create a one stop shop for the processing and issuance of all necessary permits and licenses.

"The AALC project will need fiscal support from the Government. The importation and clearing of aircraft spares will need to fall under a different customs clearance regime. We will need a special visa regime and dedicated immigration procedure for crew and workmen in the aviation industry. "Airport concession fees and other charges will need to be waived or differed for these brand-new aircraft and especially for the MRO bound aircraft.

"Freight cargo handling and freight cargo handling procedure will need to be improved. Cargo clearance procedure will need to be harmonised especially for spares as domestic cargo.

"The federal government should work to align Nigeria with international standards on control and compliance with aircraft noise and fuel emission. Government should invest in aviation education, skill building and skill development capacity.

Authors: All Africa

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