September 12, (THEWILL) – The Federal Government, on Thursday, signed the Cape Town Convention (CTC) Practice Direction in a bid to reduce the cost of doing business in the Nigerian aviation sector.
The CTC Practice Direction was signed by the Chief Judge of the Federal High Court, Justice John Terhemba Tsoho, during a stakeholders’ meeting of the Presidential Enabling Business Environment Council (PEBEC) chaired by Vice President Kashim Shettima at the Presidential Villa, Abuja.
Aviation stakeholders at the meeting include Chairman of Air Peace, Allen Onyema, among others.
The signing of the CTC Practice Direction will ensure the Cape Town Convention becomes fully operational in Nigeria, thereby reducing the cost of insurance for airlines, restoring investors’ confidence in the Nigerian aviation sector as well as reducing the cost of doing business in the nation’s aviation industry.
The CTC 2001 is a Convention on International Interests in Mobile Equipment and the Protocol on Matters Specific to Aircraft Equipment.
Ratified in 2016, the Convention and Protocol have five basic goals: to facilitate aircraft financing transactions by creating a mechanism for ensuring that international interests in aircraft will be recognised across all Contracting States; to provide greater confidence to the creditor by providing basic default remedies as well as efficient interim relief mechanisms.
Besides, the convention and protocol are intended to reduce risks for creditors, and consequently, the borrowing costs to debtors through the resulting improved legal certainty.
With Nigeria as a signatory to the CTC, airline operators in the country will have easier access to aircraft leasing, especially from leasing companies.
The CTC also affords Nigerian airline operators access to aircraft on dry lease, while passengers can also enjoy lower flight rates.
