Airlines Reap Benefits from New Aircraft Leasing Policy — NCAA

Table of Contents

Nigerian Airlines Begin Reaping Benefits from New Aircraft Leasing Policy

The Nigerian Civil Aviation Authority (NCAA) has revealed that airlines are already experiencing the positive effects of the newly implemented aircraft leasing policy. This development was highlighted during a retreat for the Directorate of Air Transport Regulation (DATR), where Mrs. Olayinka Babaoye-Iriobe, Director of Air Transport Regulation at the NCAA, shared insights on the policy’s impact.

Babaoye-Iriobe explained that the policy is designed to address the persistent issue of flight cancellations caused by insufficient aircraft availability. Over time, the initiative aims to improve operational efficiency and reduce disruptions in air travel.

A significant achievement under this policy is Nigeria's removal from the Cape Town Convention (CTC) index, which had previously been below 49 percent. The implementation of the Irrevocable De-registration and Export Request Authorization (IDERA) played a crucial role in this transformation. According to Babaoye-Iriobe, this change has made it easier for Nigerian airlines to access leasing companies, reducing the high costs associated with aircraft leases.

Impact on Airlines and Leasing Companies

Prior to the IDERA implementation, some airlines faced challenges in maintaining lease payments, often leading to legal disputes when lessors sought to reclaim aircraft. This situation not only affected the airlines but also painted Nigeria in a negative light within the aviation industry. With the new policy, lessors can now retrieve aircraft without going through lengthy legal procedures, improving the overall business environment.

Babaoye-Iriobe emphasized that the minister of Aviation and Aerospace Development has taken significant steps to enhance Nigeria’s appeal to leasing companies. While the benefits may not be immediately visible, the long-term impact is expected to be substantial. Airlines will gain better access to aircraft, addressing the current capacity issues and ultimately reducing flight cancellations.

Ensuring Financial Viability and Safety

The DATR conducts regular evaluations to ensure that Nigerian airlines remain financially sound. This process involves collaboration with the Directorate of Finance and the Directorate of Air Transport to perform economic and financial audits. These audits help identify weaknesses and provide guidance for necessary improvements, ensuring that safety standards are maintained.

Babaoye-Iriobe noted that the process of acquiring and renewing airline licenses has become more streamlined. As long as operators meet all regulatory requirements, the renewal process is efficient and accessible. Licenses are typically renewable every five years, and the directorate works to eliminate any unnecessary hurdles during this period.

Digital Transformation in Licensing

An important innovation introduced by the director general is the creation of an electronic portal for the Directorate of Air Transport Regulation. This portal allows airlines to apply for economic authorizations online, significantly reducing the need for physical visits to the office. Operators can submit their applications and make payments electronically, streamlining the entire process.

While physical visits are still required for obtaining receipts, the system ensures that all documentation is reviewed efficiently. Once the necessary steps are completed, airlines receive confirmation, enabling them to operate without delays.

Enhancing Business Efficiency

The introduction of the electronic portal has made the licensing process faster and more transparent. Airlines that meet all the required criteria can obtain their licenses within a month, demonstrating the commitment of the NCAA to ease of doing business.

Babaoye-Iriobe highlighted that the goal of the policy is to create a more favorable environment for airlines, encouraging investment and growth in the sector. By improving access to aircraft and reducing operational costs, the policy is expected to have a lasting impact on the Nigerian aviation industry.

With the successful implementation of IDERA and the Cape Town Convention, the future looks promising for Nigerian airlines. The focus on financial stability, regulatory compliance, and digital innovation is paving the way for a more robust and efficient air transport sector.