Legal Landscapes: Nigeria- Aviation Finance and Leasing
1. What is the current legal landscape for Aviation Law in your jurisdiction?
By virtue of Section 251(1)(k) and the Second Schedule of the Constitution of the Federal Republic of Nigeria 1999 (as amended), the National Assembly has exclusive legislative power over aviation matters, while the Federal High Court has exclusive judicial power over such matters.
Aside from the Constitution, the principal legislation governing the aviation industry is the Civil Aviation Act 2022 (“CAA 2022”), which repealed the Civil Aviation Act 2006 to align Nigeria’s aviation regime with contemporary international standards and technological realities. The CAA 2022 makes the Nigerian Civil Aviation Authority (“NCAA”) the primary regulator to oversee the licensing of civilian airline operators, aircraft registration, air navigation, safety oversight, economic regulation, and enforcement in line with global best practices, particularly those prescribed by the International Civil Aviation Organization (ICAO). The Minister of Aviation and Aerospace Development retain overall policy direction of, and supervisory oversight over, the sector. (Military (as distinct from civil) aviation is the preserve of separate legislation and governmental authorities.)
Other legislation and regulators on civil aviation include:
- The Federal Airports Authority of Nigeria Act, 2022 (“FAAN Act”) which establishes the Federal Airports Authority of Nigeria (“FAAN”). FAAN is to develop, provide, own, operate and maintain airports within Nigeria as well as provide all necessary services and facilities for the safe, secure, orderly, expeditious, and economic operation of air transport, among other functions. See section 5 of the FAAN Act.
- The Nigerian Safety Investigation Bureau (Establishment) Act, 2022 (“NSIB Act”) provides an institutional framework for the prevention, regulation, and administration of safety investigation of transportation occurrences in Nigeria. The NSIB Act also establishes the Nigerian Safety Investigation Bureau (“NSIB”), which operates as the independent, multimodal safety investigation body for all transport sectors: air, marine, rail, and road. The NSIB is mandated to investigate accidents and serious incidents objectively, determine their causes, and issue safety recommendations to prevent recurrence. Its establishment strengthens institutional independence and enhances Nigeria’s compliance with the International Civil Aviation Organization (“ICAO”) Annex 13 obligations on accident investigation. The NSIB Act is also supported by provisions of the Civil Aviation (Investigation of Air Accidents and Incidents) Regulations 2024 which were issued to strengthen investigative and reporting procedures in line with international standards.
- The Nigerian Airspace Management Agency (Establishment) Act 2022 (“NAMA Act”) establishes the Nigerian Airspace Management Agency (“NAMA”), which provides air traffic services such as air traffic control, aeronautical telecommunication, among others.
- The Nigerian Meteorological Agency (Establishment) Act, 2022 (“NiMet Act”) delivers meteorological and climate data to support safe flight operations. See section 7 of the NiMet Act.
- The Nigeria Civil Aviation Regulations (NCARs) are secondary legislation issued by the NCAA and mirror ICAO annexes, set detailed operational and safety standards for airworthiness, licensing, airport operations, and safety management systems.
- The Federal Competition and Consumer Protection Commission Act, 2018 (“FCCPC Act”) establishes the eponymous agency the Federal Competition and Consumer Protection Commission (“FCCPC”) which is a regulator of consumer and competition matters across all industry sectors.
- The Federal High Court Act and its Rules: The Nigerian Constitution gives the Federal High Court exclusive jurisdiction over aviation and safety of aircraft. See section 251 of the Constitution.
Nigeria is also a signatory to several international conventions such as the Cape Town Convention (“CTC”) Practice Directions, 2024, Convention for the Unification of Certain Rules for International Carriage by Air (Montreal Convention, 1999), Convention on the International Recognition of Rights in Aircraft (Geneva Convention, 1948), et al. Some of these conventions have been ratified and fully domesticated within the body of law in Nigeria.
2. What three essential pieces of advice would you give to clients involved in Aviation Law matters?
i. Prioritise compliance and proactive engagement with regulators
Nigeria’s aviation sector is governed by an extensive framework of national and international regulations. While there are opportunities to enhance operational efficiency, ongoing reforms continue to streamline processes and create a more enabling environment for users, operators and investors.
To effectively navigate aviation law matters, clients are advised to ensure that they adopt a structured compliance culture, tracking NCAA directives, renewing certifications on time and procuring new ones, and documenting engagement with the NCAA, FAAN, and other relevant agencies. Engaging legal advisers who understand both the law and the regulations as well as operational realities in the sector is crucial. Proactivity not only prevents costly suspensions and fines but also positions operators as credible and compliant partners in a system still evolving toward international efficiency standards.
ii. Embed consumer protection and service reliability into operations
Consumer protection is a core part of the regulatory framework. Part 19 of the NCAA Regulations provides specifically for consumer protection. It requires clear communication, and, in the event of infractions, prompt compensation and refund mechanisms. Reliability and transparency are key to building trust, particularly in a context where security challenges limit travel convenience and options and compel passengers to rely on air transport. Operators who communicate honestly and uphold service commitments tend to earn stronger customer loyalty and regulatory goodwill.
iii. Build strong contracts, risk and liability management structures
Liability in the aviation industry, like in other transportation sectors, ranges from passenger injury and property damage to cargo loss, and so forth. It is essential for operators in the industry to establish and put in place risk mitigation mechanisms to prevent or adequately minimise the harsh effects of these risks. To mitigate exposure, operators should maintain robust insurance coverage, ensure that contractual terms with lessors and service providers reflect appropriate risk allocation, and periodically review policy adequacy. Rising operational costs, foreign exchange rate volatility, and infrastructure constraints make such diligence essential for financial resilience. Sound legal and risk management structures are therefore crucial to sustaining operations in Nigeria’s challenging aviation environment.
In summary, navigating Nigeria’s aviation landscape requires a mix of regulatory compliance, consumer responsibility, and risk management. Clients who embed these principles into their operational practices are better equipped to withstand regulatory friction and maintain long-term competitiveness.
3. What are the greatest threats and opportunities in Aviation Law in the next 12 months?
The next twelve months will be critical for Nigeria’s aviation sector, as the country attempts to balance long-standing regulatory inefficiencies, economic constraints, and infrastructure decay with new waves of reform, infrastructure development and digital transformation. The industry faces both formidable threats and promising opportunities that will determine its competitiveness and credibility in international aviation law and practice.
Greatest Threats:
i. Foreign Exchange Volatility and Dollar Dependence
Nigeria’s aviation sector is heavily dependent on the US Dollar for aircraft acquisition, leasing, maintenance and insurance, and as such continues to face pressures from its vulnerability to the inconsistencies and fluctuations of the US Dollar-Naira exchange rate. Between 2020 and 2023, the Naira depreciated against the Dollar in the official and parallel markets, significantly increasing operating costs for airlines. This remains the case in recent times considering the continuous depreciation of the Naira and the subsequent escalating costs. According to the National Bureau of Statistics’ Transport Watch Report dated April 2025, air fare in 2025 rose by 46.03% from the previous year. Similarly, leasing defaults and deferred maintenance have also become more frequent, heightening contractual and financial risk.
ii. Outdated Infrastructure and Revenue Loss
In a publication by Aviation Metric, the Chief Executive Officer of Financial Derivatives Company (FDC), Mr. Bismarck Rewane, is quoted to have said that due to poor infrastructure, Nigeria’s aviation sector lost USD3.5 billion in revenue between 2020 and 2022. While Nigeria has made significant progress in aviation safety and regulatory compliance, evidenced by a 75.5% global aviation compliance rating under the Cape Town Convention, several airports still face challenges related to outdated infrastructure and uneven implementation of necessary systems. These deficiencies contribute to operational delays, safety risks, and heightened exposure to consumer claims and regulatory penalties.
iii. Regulatory, Compliance and Enforcement Gaps
Although the CAA 2022 and the NCARs provide a modern legal framework, enforcement remains inconsistent. Approximately 30% of safety inspections are reported as delayed or incomplete, and sanctions for breaches of safety regulations are not applied as consistently as they should be. These gaps undermine Nigeria’s ICAO compliance ratings and create uncertainty for foreign investors and lessors. Another threat is the failure of the regulators to impose meaningful penalties and consequences for infractions committed by both airline operators and end-users. In many instances, violations that should attract fines, suspensions, or other corrective measures go unaddressed entirely. This lack of deterrence not only emboldens repeat offenders but also signals a broader governmental unwillingness to enforce the rules it has put in place, ultimately weakening confidence in the entire regulatory system.
iv. Security and Safety Vulnerabilities
In recent times, there has been agitation about security adequacy in the aviation sector. In 2024, the NCAA recorded at least 996 cases of pilferage, discourtesy, and related incidents across Nigerian airports. These lapses jeopardize passenger safety, expose carriers to liability claims, and damage international perceptions of Nigerian aviation security.
v. Taxation and Financial Pressures
The Nigeria Tax Act 2025 reinstates VAT on airline tickets and customs duties on aircraft, engines, and spares from January 1, 2026, removing long-standing exemptions. This is expected to increase domestic carriers’ operating costs by about 7 to 10%, on top of existing charges such as the NCAA’s ticket sales charge. Airlines have warned that these new taxes will raise fares, reduce demand, and threaten operational viability in an industry already struggling with thin profit margins, forex scarcity and high maintenance costs.
vi. Jurisdictional Gridlock
Another threat facing the industry is jurisdictional gridlock. This gridlock has hampered and continues to obstruct repeated attempts to privatize airports in Nigeria. The gridlock emanates from jurisdictional claims from the Minister of Aviation, FAAN and the Bureau of Public Enterprise therefore diminishing investors confidence in privatisation partnerships.
vii. Government Attitude
The Federal Government’s attitude towards its airport concessions also poses another threat to the industry. This is because there are several cases such as the Bi-Courtney Aviation Services Limited MMA2 concession, of the government not completing negotiations, stalling same or refusing to fully comply with the terms of the concession. In some cases, for example in 2023, the government had suspended the award of the concession of the four major airports in Nigeria due to alleged impropriety in the bidding/concession process. This attitude has altered investor confidence in such concessions especially as significant funds and manpower are typically expended in these bids/concessions.
Greatest Opportunities:
i. Regulatory Modernization and Digital Transformation
The NCAA has launched a centralized e-portal for licensing, certification, and aircraft registration. This streamlines administrative processes, reduces delays, and enhances transparency, which is expected to improve investor confidence and facilitate compliance with ICAO standards.
ii. International Compliance and Financing Advantages
Nigeria’s improved adherence to the Cape Town Convention and related practice directions strengthens the legal security of aircraft leasing and repossession. These developments, combined with stable compliance with ICAO safety and operational benchmarks, enhance Nigeria’s creditworthiness, enabling more competitive lease terms and increased foreign investment.
iii. Public-Private Partnerships and Infrastructure Renewal
PPP initiatives, including the concessioning of Lagos, Abuja, and Port Harcourt airports, are poised to attract private investment, modernize infrastructure, and improve operational efficiency. The African Export-Import Bank’s Dry-Lease Program is expected to introduce at least 25 aircraft to be leased to African airlines. The program also seeks to provide Nigerian airlines with access to dry-leased aircraft, enabling them to better service Bilateral Air Service Agreement (BASA) routes and domestic operations.
iv. Technology Adoption and Sustainability Initiatives
Investments in digital air traffic control systems, predictive maintenance technologies, and smart airport infrastructure can improve operational reliability, reduce safety incidents, and enhance passenger experience. Adoption of sustainable aviation fuels (SAF) and alignment with ICAO’s Carbon Offsetting and Reduction Scheme International Aviation (“CORSIA”) framework present opportunities for Nigeria to participate in global carbon offset markets and advance green aviation initiatives.
v. Infrastructure Development
The proposed new international airport along the Lekki-Epe axis of Lagos State presents new opportunities in the Nigerian aviation space. The proposed airport is designed to ease the growing pressure on the Murtala Muhammed International Airport. This will help boost foreign direct investments in the aviation space, allow for modern and functional infrastructure, create employment opportunities for Nigerians, and contribute immensely to Nigeria’s economic growth.
vi. Emergence of Domestic Airlines
The emergence of new domestic airlines presents an opportunity for both local and foreign investments in the aviation industry. Investors will have wider range of investment opportunities allowing them to either contribute to infrastructure development, connectivity, safety or training. These new airlines will also improve competition and reduce monopoly in the industry. Some of these new airlines include Pioneer Airlines, Binani Airlines and K – Impex Airlines, some of which are backed by state governments.
vii. Expansion of Nigerian Airlines Route
Another opportunity in the aviation space is the expansion of travel routes by some Nigerian Airlines. Nigerian Airlines such as Air Peace, Ibom Air, Arik Air and Overland Airways operate abroad and have now expanded their international routes. This allows the Nigerian economy through the airlines to generate revenue which ordinarily would have flowed to foreign carriers. By operating abroad, the airlines also aid the development of the local aviation industry.
viii. Private Jet and Emergency Medical Evacuation
Air charter services are fast becoming a high-value investment opportunity for investors due to the increasing focus on health issues. Specifically, there is a rising demand for medical evacuation services. As patients and healthcare providers increasingly prioritize rapid access to specialized treatment, the need for dependable, on-demand air transport has expanded significantly. This trend has positioned medical evacuation as one of the most resilient and fast-growing segments within the charter aviation space. One of such innovative use of aviation in healthcare is seen with the Flying Doctors Nigeria initiative founded by British/Nigerian doctor, Dr. Ola Brown. The Flying Doctor Nigeria initiative is a tech-enabled marketplace for urgent/emergency medical care.
Simultaneously, private jet charters are also experiencing a notable surge. High-net-worth individuals, corporate executives, influencers, and celebrities are opting for private air travel in greater numbers, as a result of its unparalleled convenience, speed, and enhanced security. The post-pandemic emphasis on controlled travel environments has further reinforced this shift, making private aviation an attractive alternative to commercial flights.
4. How do you ensure high client satisfaction levels are maintained by your practice?
Maintaining high client satisfaction in Nigerian aviation law requires a combination of responsiveness, technical excellence and a client-centric approach tailored to the complexities of the sector. Aviation law in Nigeria intersects with a dense regulatory framework, strict operational timelines, and significant financial and safety implications, meaning that clients demand both precision and speed. We ensure high client satisfaction levels by adopting the following practices:
i. Responsiveness: Prompt and reliable communication, backed by our expertise and relationships with regulators, and rooted in practical experience, are central to our practice as a firm in this area and elsewhere. Aviation matters often involve tight regulatory deadlines, urgent licensing approvals, or immediate operational concerns. By providing swift responses to client inquiries, updates on regulatory developments, and realistic guidance on documentation or compliance requirements, we help clients avoid operational delays and build trust.
ii. Consistent, Transparent Communication: We provide regular updates on regulatory developments, progress on cases or transactions, and proactive alerts regarding potential risks or opportunities to our clients to keep them well informed of the changes and position of the industry. We also prioritise communication and ensure that complex legal and regulatory concepts are communicated to our clients in clear, accessible terms, ensuring that clients are empowered to make well-informed and strategically prudent decisions.
iii. Delivery of Tailored Client Services: Considering the diversity of operations in the aviation industry, we recognize that no two clients are exactly alike. With integrity and transparency, we structure our advice and services as required to adapt to the specific business model, fleet compositions, and operational objectives of the client as it arises. Whether advising on compliance, financing, or contractual disputes, our focus remains on delivering practical, context-specific legal solutions that align with each client’s commercial objectives.
iv. Technology: The importance of technology in ensuring service efficiency cannot be ignored. As a firm, we adopt digital tools for document sharing, electronic signatures, and virtual consultations allows clients to navigate complex transactions and regulatory requirements with greater convenience and speed. We have also been certified by the International Organization for Standardization (ISO).
5. What technological advancements are reshaping Aviation Law and how can clients benefit from them?
Technological innovation has been reshaping aviation law in Nigeria, with recent developments signalling a shift towards greater efficiency, transparency, and regulatory modernization. Digital tools are enhancing how legal, regulatory, and transactional support is delivered, including AI-assisted legal research, document automation, and secure digital collaboration platforms, which expedite contract drafting, regulatory filings, and cross-border due diligence. These tools allow clients, airlines, lessors, financiers, and regulators to receive faster, data-driven, and more precise legal solutions.
At a broader level, the NCAA, in December 2024, launched a centralized Directorate of Air Transport Regulation (DATR) Electronic Portal (E-Portal), a single-window digital platform which streamlines key processes such as aircraft registration, licensing, airworthiness reviews, and operator certification.
Recently, it has been reported that the FAAN has upgraded security infrastructure at Nigeria’s airports, especially international airports in line with Standard and Recommended Practices (SARPS), which are technical specifications adopted by the ICAO. One of the upgrades involve the deployment of the Orion 928DX high-performance security scanner with its capabilities to detect threats. The updated security infrastructure is able to detect prohibited items, making physical search of luggage unnecessary and reducing opportunities for alleged extortion by security operatives. Recent infrastructure upgrades now allow travellers to check through international immigration seamlessly, with fully electronic verification processes.
Looking ahead, technologies such as blockchain-based contracting, predictive legal analytics, and AI-enabled compliance management are expected to reshape aviation law in Nigeria. These tools will transform risk assessment, financing structures, and disputes resolution, while also supporting compliance with evolving international standards.
Another technological advancement we are witnessing in the aviation space is evident in the enhancement of in-flight entertainment and connectivity. Airlines are now investing in advanced in-flight entertainment systems that offer a wide range of multimedia content, as well as reliable and high-speed internet connectivity, allowing passengers to stay connected and entertained throughout their journey. This remains part of the efforts to ensure passengers are comfortable throughout their journey.
Another advancement is evident with the launch by Air Peace of the state-of-the-art Maintenance, Repair, and Overhaul (MRO) facility in Ikeja, Lagos. The MRO facility, which, upon completion, will be the largest MRO facility of its kind in Africa, will significantly reduce Nigeria’s reliance on similar infrastructure in other countries like South Africa and Ethiopia. The construction of the facility is set to revolutionize Nigeria’s aviation industry, curb capital flight, and position the nation as a continental hub for aircraft maintenance.
Nigeria also now has centres where airline personnels undergo avionics training. The Caverton Aviation Training Centre (CATC) which is an EASA & NCAA approved training facility trains personnel in controlled learning environment on the principles of electricity and electronics for airplanes.
Clients benefit through reduced turnaround times, improved regulatory compliance, stronger risk management, and access to globally-aligned legal digital aviation frameworks.