Foreign Investors will Own 49% Stake in Nigeria Air: Here is the Sharing Formula

Nigeria Air is about to take off, three years after the Nigerian government announced it would launch a new national carrier to replace the defunct Nigeria Airways, which was liquidated in 2003.

The Federal Executive Council on Wednesday approved April 2022 for the take-off of Nigeria Air. The airline will commence operations with three rented aircraft under a wet-lease arrangement.

A wet-lease is a leasing system that allows one airline (the lessor) to provide one or more aircraft, complete flight crew, maintenance, among others.

According to the minister of aviation, Hadi Sirika, the leasing arrangement was adopted pending when the government will receive the aircraft it ordered, which could take about three to five years.

Sharing formula

The minister said Nigerians will exclusively own a 46 per cent stake in the airline; the government will own five per cent while 49 per cent will go to strategic equity partners, which are presumably foreign investors.

On how Nigerians will acquire the 46% share, Sirika explains; “It will be purchased exactly the way you buy shares in every company.

“This is because Nigeria Air is a limited liability company for now, registered under the law of the land and structured in a PPP (public-private partnership) manner.

“So you purchase it the same way you purchase shares in any company and later it is our hope that it will be listed and go through IPO (Initial Public Offering) and so on.”

Who will control the airline?

Investors will solely control and run the national carrier, the minister adds. However, the investors will carry out all the maintenance, repair, and overhaul of the national airline and other airlines at a new facility built on 12,000 hectares of land in Abuja.

“In that 12,000 hectares of land, which all of it is a free zone, there will be the MRO facility, a second runway, new terminal building and various businesses. It is going to be a whole airport city,” Sirika says.

The maintenance facility will reportedly save Nigeria millions of dollars. Currently, airlines operating in the country fly their planes abroad for maintenance which Sirika says costs as much as $250 thousand each, to and fro.