Nneka Onyeali-Ikpe, the Group Managing Director and Chief Executive Officer of Fidelity Bank, has issued a critical appeal to the Federal Government. She is calling for the establishment of a special funding mechanism designed to close a massive financing shortfall exceeding $25 billion in Nigeria's aviation industry.
The Unsustainable Cost of Commercial Loans for Airlines
Onyeali-Ikpe delivered this urgent message during a session at the Nigeria International Air Show, held at the Nnamdi Azikiwe International Airport in Abuja. She pinpointed the core problem: airlines relying on standard commercial loans, which are tied to the high Monetary Policy Rate (MPR), are on an unsustainable path. These operators depend heavily on borrowing to purchase expensive aircraft and maintain daily operations, a model that is crippling the sector.
"We have been advocating that an aviation fund should be initiated from the cash reserve ratio (CRR). We have requested that funding for airlines come out of the CRR," the Fidelity Bank CEO stated emphatically. She argued that aviation, being an essential economic driver, merits access to special interest rates and a financing structure specifically designed to support critical needs like fleet acquisition, maintenance, and infrastructure upgrades.
A Test Case That Rebuilt Confidence
The sheer scale of investment required underscores the crisis. Onyeali-Ikpe highlighted that acquiring a single aircraft can cost as much as $80 million, a figure that makes survival nearly impossible for operators without targeted financial intervention. She revealed that her bank's renewed commitment to the sector followed a successful partnership with Air Peace, which served as a pivotal "test case."
According to Onyeali-Ikpe, Air Peace's strong financial discipline, robust corporate governance, and overall resilience have been instrumental in restoring lender confidence. This was crucial after previous industry collapses had severely dampened the appetite for aviation loans. "Today, we can support at least 500 airlines fully and 10 through its vendors, because our test case succeeded," she announced, signaling a regained capacity for large-scale support.
The Economic Stakes of a Healthy Aviation Sector
The Fidelity Bank CEO concluded by underscoring the immense economic value of a functional aviation industry. She cited current data showing the sector facilitates 86 domestic flights, sustains over 216,000 jobs, and serves more than 16 million passengers annually within the Nigerian market. These figures, she implied, justify the urgent need for a dedicated financial solution to prevent the sector's decline and unlock its full potential for national growth.
