Managing Director of the Federal Airports Authority of Nigeria (FAAN), Mrs Olubunmi Kuku, says Nigeria’s aviation sector urgently needs government-backed credit enhancements to support sustainable airline financing and reduce the heavy risk burden currently placed on commercial banks. Her remarks on credit enhancements was a response to ongoing discussions during a panel session at the FAAN National Aviation on sector funding and financial access for airlines.
Kuku commended the Managing Director of Fidelity Bank for what she described as “a bold step’’ in supporting aviation operators. However, she emphasised that commercial lenders “do not have the firepower’’ to fund the industry’s capital requirements without structured protection.
According to her, the lack of adequate credit enhancements has created a financing imbalance that exposes banks to high-risk assets while denying airlines affordable long-term credit.
Push for Government Support Through Credit Enhancements
The FAAN boss explained that the sector must work collectively to secure the right government-backed instruments. “My concern here is the power that the commercial banks have to fund this and the risk that it entails,” she said. She noted that, from a finance perspective, operators, regulators and airlines must jointly champion the adoption of partial guarantees and export-linked support schemes to de-risk aviation lending.
Kuku said the Federal Government now appears more open to structured guarantees that can support aircraft leases and similar long-term obligations. She stated: “I will think that they will be willing to support us more, whether it’s partial credit guarantees that are available and pushing the likes of InfraCorp, Coface, the export credit agencies and the export-import banks to really help us as we push on these leases.’’
She advised that the industry should focus on strengthening specialised desks within commercial banks rather than creating a new aviation bank. According to her, properly designed credit enhancements will provide “more firepower’’ for lenders while giving airlines predictable and sustainable financing pathways.
Operational Issues and Sector-Wide Challenges
Reacting to airline complaints about delays, operational constraints and systemic inefficiencies across the aviation value chain, Kuku stressed that the challenges were “sectorial’’ affecting operators, regulators and service providers alike.
She acknowledged recurring issues raised by carriers, including those by Air Peace on bird strikes, runway conditions and other operational disruptions. Kuku said FAAN, working with the Nigerian Civil Aviation Authority (NCAA), had developed a strategic plan that aligns with the ongoing national aviation master plan and would feed into broader infrastructure and service improvements.
She appealed to airlines and other stakeholders to contribute actively to the process to end what she described as a “haphazard approach’’ that results in small fixes rather than long-term solutions.
“This is a sectorial issue and what that means is as the airlines are having issues and dealing with it, so are the regulators and the operators.” FNAC Reactions See Video
“We are inviting the industry to also give us feedback so that we stop this haphazard approach of small fixes that really don’t get us the long mile.’’ According to her, the master plan is designed to replace short-term remedies with structured improvements that deliver measurable sector-wide progress.
Kuku urged all aviation stakeholders to collaborate more closely to ensure sustainable development. She stated: “We understand the challenges you’re facing within the airport environment,” noting that the sustainability of the industry depends on shared responsibility and unified planning. She stressed that coordinated action, supported by effective credit enhancements, will enable Nigeria’s aviation sector to overcome chronic financial and operational constraints.
