Nigerian airlines have been advised to change their business model from either wet lease or dry lease option to outright aircraft ownership.

Speaking with The Guardian in Lagos over the weekend, the Managing Partner of Aeronexus, Gbenga Onitilo, said that heavy reliance on leased aircraft was negatively affecting their long-term financial sustainability and limiting their ability to attract investment.
Onitilo argued that while the industry continued to grapple with challenges such as high aviation fuel prices, foreign exchange volatility and rising operating costs, the deeper structural problem lied in the continued dependence on aircraft leasing.
According to him, most Nigerian airlines operate in a difficult environment where revenues are earned in naira, while lease obligations are settled in dollars, thereby exposing their operations to severe foreign exchange risks.

Onitilo expressed that unlike global leasing companies that benefit from the arrangement, Nigerian carriers were trapped in a cycle where monthly lease payments remained operating expenses without creating long-term value.

He said: “There is a quiet financial crisis running through the balance sheets of Nigerian domestic airlines and most industry watchers are not talking about it loudly enough. We obsess over ticket pricing, forex volatility and fuel costs, all legitimate concerns, but underneath all of that sits a structural wound that bleeds cash every single month: the addiction to aircraft leasing.
“For a Nigerian domestic carrier operating in a high-inflation, naira-denominated revenue environment with dollar-denominated lease obligations, it is a slow financial suffocation. Every wet lease or operating lease payment that goes out the door is an expense on the income statement, not an investment.”

Onitilo estimated that an airline operating four narrow-body aircraft under operating lease arrangements could spend between $400,000 and $700,000 monthly on lease obligations, all payable in foreign currency.

He noted that as the naira continued to nosedive against the dollar, airlines bore the full impact since passengers pay fares in naira while lessors demand payment in dollars.

The aviation expert further posited that excessive lease liabilities weaken airlines’ balance sheets and make it more difficult to secure financing from banks and investors.

According to him, financial institutions are more willing to support airlines that possess tangible assets capable of serving as collateral.

Besides, Onitilo mentioned airlines such as Emirates, Turkish Airlines and Ethiopian Airlines, which he said had built stronger financial positions through aircraft ownership over the years.
He noted that ownership had enabled these airlines to leverage their fleets to secure development financing, negotiate favourable maintenance agreements and strengthen investor confidence.

He added: “Owned aircraft, even partially financed through debt, sit on the balance sheet as capital assets. They are depreciable. They are collateralised. They generate borrowing capacity.
“Ethiopian Airlines’ fleet ownership model has been central to its ability to attract development finance, negotiate favourable maintenance contracts, and build the kind of institutional credibility that draws sovereign partnerships. You cannot replicate that standing on a lease portfolio.”

Onitilo agreed that acquiring aircraft required substantial capital, but insisted ownership was more beneficial over the long term than continuous lease payments.

He opined that Nigerian airlines could explore financing options, including export credit agency facilities, manufacturer-backed financing arrangements and consortium-based aircraft acquisitions.
According to him, pursuing ownership would encourage stronger corporate governance, improve financial planning and attract more credible investment partners.

He maintained that with Nigeria possessing one of Africa’s most promising aviation markets, the challenge was no longer whether airlines could afford to buy aircraft, but whether they could continue to afford not to own them.