Nigeria has ratified the international convention on access to cheap funds for aircraft acquisition by local airlines.
The instrument was signed in Dublin, Ireland, last week by the Nigerian Civil Aviation Authority (NCAA) and officials of the International Registry of Mobile Assets, a body, which assists airlines to grow their fleet.
NCAA also held talks with foreign investors on the opportunities that abound in the country's aviation industry.
At the Blandchardstown Dublin office of the centre, where the instrument was ratified, the Director-General of the NCAA, Dr. Harold Segun Demuren, said the depositing of the instrument at the International Registry of Mobile Assets represented a significant leap in the quest for a well-funded and robust aviation sector.
The instrument, which has been passed into law by the National Assembly and signed by former President Olusegun Obasanjo on May 13, 2002 allows Nigerian airlines access to aircraft leasing and finance as well as insurance at a lower rate.
Demuren led a Nigerian delegation that included Mrs. Binta Hassan, a director of Air Transport in the office of the Minister of Transport, Mr. Samuel Gaya, legal counsel to NCAA and Mr. Utienwe Uwa, a legal consultant, to meet with officials of Aviareto Company, the managers of the International Mobile Assets.
He said: "What we are doing today is to complete the conditions for the ratification and depositing of Cape Town Convention. We have ratified the convention, we have domesticated it in our law, we have deposited it at UNIDROIT in Rome and now we are completing the last leg of the exercise."
On the significance of the action, Demuren said: "We are looking at the opportunity of fleet renewal. Aeroplane costs money and if we want to make the desire of having new aircraft in Nigeria a reality, Cape Town Convention is needed. Today, we have put Nigeria on the register. Now, we have met all the conditions. The opportunity to access cheap financing has been opened for our operators."
In his remarks, Mr. Niall Green, managing director, Aviareto, commended NCAA's efforts on the Convention, which he said, had opened the door of cheap aircraft financing to Nigerian airlines. He added that taking advantage of the benefits of the treaty would accelerate aviation development in Nigeria .
"It will grant the airlines access to cheaper money. How much we do not know now as we are just in operation for a year but the idea is to enable airlines have access to cheaper financing. Already, creditors have been giving explicit concessions to airlines in countries that have signed the convention," he said.
The firm's Head of Operations, Mr. Rob Cowan in his presentation, explained how the registry works in the enforcement of the convention to the Nigerian team.
Cowan said that more than 12,000 firms had been approved to use the registry for transactions to protect the interests of creditors and lessees in a deal.
The group pledged to assist Nigeria in training airline operators on how to access the benefits of the convention.
With the ratification and domestication of the convention, creditors who have been wary of doing business with Nigerian operators following the default of some airlines in the past now have the enabling environment to do business in the aviation sector.
This is made possible by the protection granted the lessors in the convention and domesticated in Nigerian law in which the lessor can easily retrieve its aircraft in case of default by the lessee without local court encumbrances.
Hitherto, Nigerian operators have to contend with high lease rate and high insurance premium as the country was regarded as a high-risk business environment.
At a meeting with CIT Aerospace International, one of the world's leading aircraft leasing firms in Dublin, Demuren appealed to creditors and investors to come do business with Nigeria, adding that necessary protection had been institutionalised to safeguard their firms.
The potentials for business in the Nigerian aviation industry, he said, was very huge.
He unfolded the regulatory agency's drive to ensure total fleet renewal and boost safety in the airspace, saying that it had made progress in sanitising the industry, which international bodies have endorsed.
Demuren said that while some Nigerian operators had been buying new aircraft, others were in the process of announcing fresh orders for new ones, adding that geriatric old plane were fast disappearing from the local airspace.
The CIT team led by the managing director, Markus Weinseiss, for over an hour explained various issues on safety and investment conditions in the country to the Nigerian team.
The firm promised to come to Nigeria to explore the possibility of releasing new aircraft into the market.
Weinsseis said: "We as a leasing company are concerned about three things. Will the airline leasing our aircraft be able to pay? Will our aircraft be well-maintained and can we retrieve it in case of default? Once these conditions are met, we will be confident to invest in the market."
He commended NCAA's investment campaign for the aviation sector.
The Cape Town Convention was adopted on November 16, 2001 in Cape Town , South Africa and Nigeria has play significant role in the execution of the instrument. Gaya is a member of the commission of experts of the International Civil Aviation Organisation (ICAO), which advises the Council on the working of the International Registry.
By Tunji Oketunbi, Deputy Aviation Editor
The Guardian
Tuesday, September 11, 2007
