Nigeria has authorized international creditors and lessors under the Cape Town Convention to reclaim aircraft in case of lease default. Moreover, the country is developing a practice direction to align with Aviation Working Group standards.
Minister of Aviation and Aerospace Development, Festus Keyamo, has collaborated with the attorney general, chief judge, and chief justice of Nigeria to fortify airline support. He has also briefed the President and Vice President on enhancing the ease of doing business.
A Practice Direction is a formal document issued by a court or judicial authority that provides guidance on procedural matters within the court system. It clarifies the interpretation or application of court rules, procedures, or protocols.
During a TV interview, Keyamo highlighted Nigerian airlines’ challenges in global competition, stressing that 70% of major airline players rely on dry leases and single-digit loans, resources Nigeria currently lacks due to investor constraints and a high bank interest rate of 26%.
Keyamo conveyed discussions with the Aviation Working Group, co-chaired by Boeing and Airbus, indicating that Nigeria must amend its injunction practices to access dry leases.
In an interview, Keyamo stated, “The Aviation Working Group has redlisted Nigeria due to non-compliance with the Cape Town Convention. Airlines lease aircraft to Nigeria under dry lease agreements, not ACMI. Unscrupulous businessmen often fail to meet obligations, then obtain court injunctions to prevent aircraft repossession.”
He also highlighted legal provisions enabling lessors to repossess aircraft, mentioning that lessors should apply to the NCAA for approval within 5 days or seek court approval within 10 days for repossession.
