By Peace Udugba
Nigeria’s aviation industry has long been regarded as one of the most capital-intensive sectors of the economy, operating under strict international regulations prescribed by the International Civil Aviation Organization. As a signatory to the Convention on International Civil Aviation, Nigeria is expected to uphold global aviation standards and recommended practices.
However, the sector has continued to grapple with several challenges, including high operating costs, fluctuating exchange rates, difficulties in aircraft repossession, and limited access to financing. Industry experts say these issues have created a perception among international lessors and financiers that Nigeria is a high-risk market, leading to stringent financing conditions and reluctance to engage local airlines.
Analysts note that despite Nigeria’s strategic location, large population and position as West Africa’s gateway, domestic airlines still struggle to attract investment and secure modern, fuel-efficient aircraft on favourable leasing terms.
According to stakeholders, many local airlines have also faced difficulties in managing operational funds effectively, making financial institutions cautious about extending credit facilities to operators in the sector.
Fidelity Bank’s Strategic Support for Aviation
Amid the industry’s financing challenges, Fidelity Bank Plc emerged as one of the few financial institutions willing to invest in the aviation sector.
The bank’s support for Air Peace dates back more than a decade, when the airline began operations on October 24, 2014, with an initial fleet of seven aircraft comprising three Dornier 328s and four Boeing 737-500 aircraft.
At a time when many financial institutions were reluctant to support aviation businesses, Fidelity Bank backed the vision of Air Peace Chairman, Allen Onyema.
The bank later financed the airline’s aircraft acquisition programme, including the agreement signed with Boeing in 2018 for the purchase of 10 new aircraft.
Over the years, Air Peace has grown into the largest airline in West Africa by fleet size and operations, while maintaining a strong banking relationship with Fidelity Bank.
Speaking recently at a press conference to announce the commencement of Abuja–London Heathrow flights, Onyema disclosed that the airline currently operates 49 aircraft, including 36 owned aircraft and four on wet lease.
He attributed the airline’s expansion and successful acquisition of slots at Heathrow Airport to financial discipline and strong partnerships with institutions such as Fidelity Bank.
“The banking industry confidence has grown due to our financial integrity. Fidelity Bank celebrated us recently. Our financial integrity is the reason for our expansion. Every Nigerian bank now wants to partner with us because we see borrowed money as depositors’ money and we are prudent with it,” Onyema said.
Fidelity Bank Honours Air Peace
On April 21, 2024, Fidelity Bank Plc hosted a special dinner in honour of Air Peace for becoming the first Nigerian airline in recent years to commence direct flights from Nigeria to London.
The event also coincided with the airline’s 10th anniversary celebration and recognised the achievements of Onyema in expanding Nigeria’s presence in international aviation.
Air Peace commenced its inaugural London flight on March 30, 2024, offering fares significantly lower than prevailing market prices on the route, a move widely praised by Nigerian travellers.
According to Onyema, Fidelity Bank was the only financial institution that supported the airline during its early years.
“This bank is the only bank that responded to us in the early days. They believed in us,” he said.
He added that the bank’s support enabled the airline to fulfil its vision of job creation and economic empowerment for Nigerians.
In her remarks at the event, the Managing Director and Chief Executive Officer of Fidelity Bank, Nneka Onyeali-Ikpe, described Air Peace as a model of financial discipline and corporate growth.
“Today, we are celebrating one of ours. They started operations with a few aircraft and today they have expanded significantly. My experience with them underscores what you call financial discipline,” she said.
Ibom Air’s Expansion
Fidelity Bank has also played a significant role in the growth of Ibom Air.
Former Managing Director of the airline, Mfon Udom, disclosed that Fidelity Bank served as the lead financier for the acquisition of the airline’s Airbus A220-300 aircraft.
Speaking during the official reception ceremony at the Victor Attah International Airport, Udom acknowledged the bank’s contribution to the airline’s expansion plans.
“There are several banks supporting Ibom Air, but this aircraft in particular was made possible by Fidelity Bank and Union Bank,” he stated.
Representing the bank at the event, Executive Director, Risk Management at Fidelity Bank, Charles Nwoke, said the institution remained committed to supporting the aviation industry.
“As the market leader in airline financing in Nigeria, Fidelity Bank is proud to support Ibom Air in this venture,” he said.
Enugu Air Launch
Fidelity Bank also supported the launch of Enugu Air through strategic financing.
Speaking at the airline’s launch ceremony held at the Akanu Ibiam International Airport, Fidelity Bank CEO Nneka Onyeali-Ikpe described the project as a strong affirmation of aviation’s role in driving economic growth.
“It is an honour to join you today as we celebrate the official launch of Enugu Air. As the lead financier of this visionary project, our support for Enugu Air reflects our long-standing belief in aviation as a driver of economic growth, regional connectivity and national transformation,” she said.
According to her, Fidelity Bank’s investment in aviation aligns with its commitment to supporting businesses capable of unlocking new economic opportunities, boosting tourism and creating jobs.
Nigeria Signs Cape Town Convention Practice Direction
In a major policy move aimed at improving aviation financing and reducing airline operating costs, Nigeria recently signed the Cape Town Convention (CTC) Practice Direction.
The initiative, led by Vice President Kashim Shettima and Minister of Aviation and Aerospace Development, Festus Keyamo, is expected to ease aircraft leasing and financing processes for Nigerian airlines.
The Cape Town Convention is an international treaty designed to facilitate asset-based financing and leasing of aviation equipment while reducing associated costs.
Industry stakeholders believe the policy will encourage more financial institutions, including Fidelity Bank, to deepen support for domestic airlines seeking funds for fleet expansion and route development.
