February 15, (THEWILL) – The Chief Operating Officer (COO) of United Nigeria Airlines, Mazi Osita Okonkwo, has revealed that for domestic airlines to do well in their operations, there is a need for the establishment of aircraft leasing companies that will be well-capitalised and supported by both external and internal investors, to act on behalf of operators to lease aircraft.
Okonkwo made the observation during a recent interview with newsmen in Lagos, adding that If the leasing company happens to be a Nigeria-based institution, it will be a lot easier for them to enter into a contract with manufacturers, who would lease aircraft and give to operators and then retrieve them whenever there is a default.
Explaining further, the COO, who informed that United Nigeria Airlines has carried close to 800,000 passengers since it started operations two years ago, pointed out that there is another form of specialised financing, saying “you can call it a bank but by name, it should be an aircraft leasing company. The banks are sufficiently capitalised to be able to fund transactions. The only problem they have are maybe the tenor and the expertise. If you get allocation from CBN and lease in naira, and you want to replenish, are you able to get at the right rate and so forth?”
He advised that it is also for airlines to be strong enough to be quoted in the stock exchange or be able to issue their corporate bonds.
“By so doing, they would be able to go directly to those with money and raise that kind of money. It is something we are dreaming of. It’s something we want to do, getting to a level where we can place our receivables and be able to raise money directly from the investors through pension funds. Once the bond is properly rated, any pension fund can be invested. Once we get to that stage, it will be a lot easier to deal with funding.”
Mazi Okonkwo kicked against the idea of the Aviation Bank, stressing that all over the world, there is no place there is a bank for aviation.
He said, “If you look at our infrastructure, agric industry, they failed completely. They are struggling and money is being pumped into them every now and then. What is needed is for the banks to develop specialists in aviation and have desks in their different banks. It is usually a stage of development.”
According to Mazi Okonkwo, United Nigeria Airlines is still operating its four CRJ owned by the airline, just as they supplement it with leasing from time to time, particularly during the peak period.
“We have plans to expand our fleet. It is being slowed down because of the current situation of forex. We had contracts with manufacturers and lessors but it has not been fully operationalised because of lack of access to forex. This year, we are going to increase the tempo a little bit and make sure that by the end of the second quarter, we will bring in the new fleet we have already committed,” he added.
Speaking on their journey so far, Okonkwo said that the airline has faced lots of challenges since February 12, 2021, when they did their inaugural flight from Lagos to Enugu, which happened a few days after the airline procured its Air Operator’s Certificate (AOC).
“That happened just a few days after we obtained our AOC. That period was towards the COVID-19 period. The aviation industry had just been opened for business. It was like, will it happen or will it not happen but we did that on that day. Looking back two years after is like what a journey,” he recounted.
Despite the hurdles which had to do with forex, aviation fuel, spare parts, ground operations and facilities, and the ability of lessors and manufacturers and sellers to do business with Nigeria, the COO maintained that huge lessons have been learnt and what the airline has done is to build in some of these lessons into plans for the future.
About the Author
Anthony Awunor, is a business correspondent who holds a Bachelor of Arts Degree in Linguistics (UNILAG). He is also an alumnus of the Nigerian College of Aviation Technology (NCAT), Zaria Kaduna State. He lives in Lagos.
