The African Development Bank is studying the possibility of creating an aircraft-leasing company for the continent, with further news expected in the first half of 2019.
Speaking at the African Airlines Association (AFRAA) annual meeting in Rabat, Morocco, African Development Bank chief aviation officer Romain Ekoto outlined plans to set up a “robust leasing company or platform for African airlines.”
He said the aim of the project is to overcome limited access to leased aircraft and fleet financing, particularly for smaller African airlines.
The new entity would also provide technical assistance with airline restructuring projects, paving the way for increased private investment in the continent’s airlines.
“We are exploring the viability of such a leasing platform, assessing the benefits for African carriers, identifying the legal arrangements and the role of the bank in setting this up. We intend to complete this work in first semester of 2019,” he said, delivering a keynote address to AFRAA delegates.
Ekoto’s role as chief aviation officer is newly created, giving the sector a voice within the African Development Bank. The bank has since held an “aviation lab” with key industry stakeholders, leading to the creation of an initial aviation framework and guidelines.
“The bank aims to support practical efforts to overcome key challengesand help promote a comprehensive transformation of the sector,” he said, listing those challenges as low disposable income among African citizens and market-access constraints, as well as inadequate infrastructure and safety standards.
Over the last 10 years, the African Development Bank has invested $1 billion in the sector, with roughly 75% of this being used for airport infrastructure and 25% to assist with aircraft acquisitions.
The African Development Bank also invests in safety and security initiatives, air navigation projects and regulatory pushes, like the single African air transport market(SAATM), which aims to liberalize air links between African states.
Ekoto said African countries must sign up with SAATM as a prerequisite to access African Development Bank financing. So far, 27 states have signed, with 15 agreeing to put this promise into action.
The African Development Bank has also commissioned a study to assess the socio-economic benefits of intra-African liberalization as part of efforts to support the sector.
ATW
