ALC in Nigeria targets 50 airplanes in seven years
The global aircraft leasing market size is projected to hit $317.5 billion in the next seven years from its value of $172.9 billion.
Last year, the aircraft leasing market stood at $167.5 billion.
Experts familiar with the trend said the increasing demand for low-cost airlines is a significant factor driving the aircraft leasing market growth.
In Nigeria, airlines running the low cost are mushrooming forcing operators to approach aircraft lessors for conveniently financed acquisition arrangements.
While some Nigerian carriers are negotiating aircraft purchase with Original Equipment Manufacturers (OEMs) – Boeing, Airbus, Bombardier, Embraer – others are sealing deals with lessors from Europe, Middle East and United States.
To drive participation in the global aircraft leasing market, the Federal Executive Council , last week granted approval for the establishment of an indigenous Aviation Leasing Company (ALC) under Public Private Partnership (PPP).
The company , to be overseen by the Infrastructure Concession Regulatory Commission (ICRC) , experts say will alleviate the problems of aircraft/engine leasing, costly lease rates and high insurance premium charges to Nigerian airlines.
Besides, they say the arrangement will curb capital flight and the strong demand on foreign exchange.
Investigations reveal that the ALC will commence operations with leasing eight aircraft in its first year of operation and increase the portfolio as it grows to 50 leased aircraft.
The approval was granted following the issuance of Full Business Case (FBC) compliance certificates by the Infrastructure Concession Regulatory Commission (ICRC), the agency statutorily established to regulate PPPs.
Speaking in an interview, an official of the ICRC, Mr Ifeanyi Nwaoko the said the ALC will be executed by Messrs AJW Consortium as concessionaires, and would seek to provide an opportunity for local leases of aircraft to both domestic and international carriers.
He said : ” “It will facilitate the ease of doing business for foreign lessors with Nigerian domestic airlines being a one-stop-shop thereby limiting capital flight and the strong demand on foreign
“The project will create employment opportunities for Nigerians which will have a multiplier effect on the economy.
“The ALC will provide leasing opportunities for Nigerian and African Airlines to boost their fleet size, alleviate the problems of aircraft leasing and high insurance premium charges, provide an alternative to foreign lessors and introduce competition which would relax the terms and conditions currently obtainable, thereby facilitating growth and development.
“The ALC will commence with leasing eight aircraft in its first year of operation, increasing the portfolio as it grows to 50 leased aircraft after the seventh year and remains constant at 70 leased aircraft by 2034.
” The ALC , will then start to purchase aircraft outright after approximately seven years, once the portfolio exceeds 50 leased aircraft”.
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