Airlines already benefiting from new aircraft leasing policy — NCAA

The Nigerian Civil Aviation Authority (NCAA) has disclosed that airlines have already started benefiting from the new aircraft leasing policy.

Speaking in Uyo during a retreat for the Directorate, of Air Transport Regulation (DATR), the Director, Air Transport Regulation (DATR), Nigerian Civil Aviation Authority, Mrs Olayinka Babaoye-Iriobe said already airlines have already started benefiting from the policy.

She explained that over time, the policy would tackle the problem of flight cancellations mostly caused by a shortage of aircraft in operations by airlines.

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Babaoye-Iriobe also noted that the policy removed Nigeria from the Cape Town Convention (CTC) index which was below 49 percent.

“What the honorable minister, Barr. Festus Kayamo has done is to look at the Cape Town Convention to try and revisit it. And then to sign up and implement the IDERA which removed Nigeria from the Cape Town Convention low index.

“Since he signed the IDERA and started implementing it, our CTC index skyrocketed. When it was on 49, it was difficult for our airline to access the leasing company. So they were leasing aircraft at a very high rate. All those things impact on fares” she stated.

“We’ve even implemented it with one of our airline. IDERA will make it easy because before the IDERA implementation, some of our airline, they will lease aircraft, when it is time, they might not be able to sustain payment of the lease rental,” she emphasised.

“And then when the lessor now wants to re-take the plane from them, they will run to the court to get an injunction to hold. So that was painting Nigeria in a bad light. Now, he has removed that. If there’s a default from the lessee, the lessor can come in and take the aircraft immediately, no question asked because we in NCAA, we will release it” she explained.

“So because my honorable minister of Aviation and Aerospace Development has done that, it has made Nigeria more amiable to the leasing company. At times, when you do certain things, the effect is not felt immediately” she said.

“But it will so that our operators will be able to access those aircrafts. Once they do, it will help this issue of lack of capacity because what is happening now is lack of capacity,” she stated.

The Director said from DATR’s evaluation process, Nigerian airlines are viable and financially sound as the Directorate of Finance, Directorate of Air Transport carry out routine visits to airlines for economic and financial audit and help to rectify areas of weakness to ensure safety.”

Babaoye-Iriobe stated that the process of acquiring airline licences and renewal has become easy and accessible as long as the airline operator meets all the required regulations and requirements.

“What we do as a directorate is to evaluate and to make sure they are still financially sound. You know, if they are not financially sound, then they will be cutting corners and then it will impact on safety” she said.

“In collaboration with Directorate of Finance, Directorate of Air Transport, we visit the airline to do an economic and financial audit of the airline. In all these cases, we now report back to the airline identifying or alerting them to areas that we perceive to be weaknesses so that they can quickly rectify it. Once those ones are rectified, it will help safety” she emphasized.

“Most airlines currently have capacity issue. They don’t have enough aircraft, and they are not able to access aircraft. And if there’s no aircraft, it will impact the number of flights.

“The air transport license is renewable every five years, and the air operator certificate also has its own years of renewal. What we do is to make sure that we remove hindrances for them when it comes to renewal.

“We try to speed it up while making sure that they meet all the required regulations and requirements. So it’s the ease of doing business. In my directorate, once you meet all the requirements, you can renew your licenses in less than a month.

“Another thing that we have done which the director general initiated is for the Directorate of Air Transport Regulation to have an electronic portal. Electronic portal is where you can submit, can apply for any economic authorization online.

“Once you gather all your requirements together, you don’t have to come to the office, you can go online, apply for the licenses. Even when it comes to payment of the required processing fees, you just follow the steps on how to do that.

“The only time for now that you will need to come to the office is if you want to get a receipt for your proof of payment, because you still need an NCAA receipt. And once you get that, you can upload it to the system, we review everything, and we write to you.

“We’ve issued licenses in a month because the person meets all the requirements. We don’t joke with that,” she explained.

Recall the minister had in October 2024 signed the implementation of Irrevocable De-registration and Export Request Authorization (IDERA) having in September 2024 signed the Cape Town Convention (CTC).

Both protocols have the potential to crash the cost of leasing aircraft, increasing fleet capacity in Nigeria thus reducing flight cancellations in the medium to long term.

With the new policy Nigerian airlines will now have easy access to aircraft from leasing companies which would economically sustain the airlines.