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Nigerian Airlines Continue to Face Leasing Challenges 541 Days After CTC Practice Direction

Nigerian Airlines Continue to Face Leasing Challenges 541 Days After CTC Practice Direction
Persistent Obstacles Despite Regulatory Reforms
More than a year and a half after the Federal Government of Nigeria, through the Chief Judge of the Federal High Court, Justice John Tsoho, enacted the Cape Town Convention (CTC) Practice Direction, Nigerian airlines still grapple with significant difficulties in aircraft leasing. The CTC Practice Direction was introduced to simplify and expedite the leasing process, enabling operators to acquire aircraft more efficiently and allowing lessors to reclaim their assets swiftly in cases of contractual breaches. Central to these reforms was the introduction of the Irrevocable De-Registration and Export Request Authorisation (IDERA), a mechanism designed to provide lessors with greater assurance and facilitate cross-border leasing transactions.
Despite these well-intentioned reforms, industry experts caution that the expected improvements have yet to be realized. The slow pace of progress comes as the Ministry of Aviation and Aerospace Development prepares to convene an international aviation summit. This event aims to bring together key stakeholders—including aircraft manufacturers, lessors, financial institutions, and airline operators—to address the ongoing challenges in aircraft acquisition. Major participants anticipated at the summit include global aerospace giants such as Boeing, Airbus, Embraer, and Bombardier, alongside both international and local banks, insurance firms, and Maintenance, Repair and Overhaul (MRO) organizations.
Historical Context and Current Industry Dynamics
The current leasing difficulties sharply contrast with earlier periods in Nigeria’s aviation history. During the peak of Arik Air’s operations, Nigerian carriers were able to secure aircraft leases with relative ease, supported by international financiers such as the Pacific Export Finance Corporation (PEFCO) of the US-Exim Bank and the European Credit Agency (ECA), complemented by backing from Nigerian banks. Today, however, the presence of dry-leased aircraft in Nigeria is limited, with only a few examples such as Air Peace’s Boeing 737-700NG (registration EL-HRN) actively operating. This situation raises questions about the practical effectiveness of the CTC framework in its current implementation.
Compounding these challenges are recent developments that have further complicated the leasing environment. United Airlines has initiated legal action to block United Nigeria’s planned launch in the United States, citing concerns over potential misidentification and deceptive practices. This dispute highlights broader issues of reliability and trustworthiness facing Nigerian carriers on the international stage. Additionally, AerCap CEO Aengus Kelly has emphasized the global need for airlines, including those in Nigeria, to access more aircraft to offset increased downtime caused by technical failures, such as the engine incident involving Arik Air’s Boeing 737-700.
Outlook and Industry Perspectives
Despite these setbacks, there are emerging signs of optimism within the sector. Investor sentiment towards African carriers is gradually improving, enhancing the continent’s attractiveness for future leasing and investment opportunities. Nonetheless, industry stakeholders stress that meaningful progress will require sustained effort and time.
At United Nigeria Airline’s fifth anniversary event, Chairman Professor Obiora Okonkwo acknowledged that while the CTC agreement has contributed to an improved compliance rating for Nigeria—now surpassing that of many European countries—many aircraft were already committed to other operators when the reforms were introduced. Okonkwo, who also serves as spokesperson for the Airline Operators of Nigeria (AON), expressed hope that as aircraft are returned to lessors, Nigerian airlines will be better positioned to access them.
As the aviation sector anticipates the outcomes of the forthcoming international summit, experts concur that although regulatory reforms have established a critical foundation, significant challenges remain before Nigerian airlines can fully leverage global leasing opportunities.

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