AFG, Fidelity Bank Sign Strategic Partnership On Aircraft Financing In Africa
Aircraft Finance, Germany (AFG) has signed a strategic partnership agreement with Nigeria based Fidelity Bank Plc, aimed at leveraging AFG’s technical expertise and Fidelity’s financial capabilities to support the sector’s development and ease aircraft acquisition for African airlines.
Announcing the agreement at the two-day Nigerian Aircraft Acquisition & Investment Summit (NAAIS) held in Lagos, Nigeria, the Managing Director, Business Aviation & SVP Commercial, Aircraft Finance Germany (AFC), Mr. Christian Hatje said “this partnership is designed to combine today’s aviation expertise with domestic capabilities to create new platform that can support African airlines.”
“The whole idea is that we will set up an African aircraft finance and lease company in Africa,” he said, adding that “for each aircraft, we will set up a dedicated Special Purpose company, which will be the lessor. This SPV will require aircraft and there will be financing of aircraft.”
He said the deal will enable African airlines to acquire aircraft on dry-lease. “We are absolutely convinced that Nigeria will become Africa’s largest aviation market.
The Executive Director of Fidelity Bank Plc, Mr. Amuche Stanley said: “The deal is very important. Most people want to get into this business, but financing has been an issue. Now, if you don’t have the whole money, when you talk about leasing, all you need is to pay the lease rentals and be able to get into the deal. We need people who are really ready for the business. You know, if you get into the business and you understand what to do, and you are ready to stay the course; not that you get the aircraft and disappear. You don’t have to wait to have all the money to buy aircraft. You pay lease rentals and be able to own the business. That’s what we want to achieve here.”
He further explained that Fidelity Bank is “just trying to improve aviation financing and leasing. AFG is very big in financing aircraft, sourcing aircraft, and leasing aircraft. We decided to enter into a partnership. We are already doing a lot in Nigeria today. We are financing most of the airlines, the big ones in Nigeria.”
“We’re just finding another platform to improve on what we are doing already. The arrangement is for us to find finance, bring finance and expertise together to make sure that we finance aviation. The aviation industry is one industry you have to have the technical know-how to get into. So we’re bringing the technical know-how for AFG to our ability to finance. So, it’s like technical know-how, meeting, financing to make sure that you de-risk your involvement in the aviation sector and make sure it’s done very well.
It is as open as anything. It’s not like a deal worth any particular amount. It’s as you get deals, you do it. Whatever the deal is, you do it.”
Amuche said “AFG will be able to source the right kind of aircraft based on your needs, based on what you want to use it for. Therefore, if you want financing for more directly to buy, of course, we can do that. We have done that already. But if it’s to lease, the SPV, as explained, can buy the assets and be able to lease, so you pay lease rentals. It depends on what the operator wants. Basically, it’s for Nigerians. Of course, there are a lot of opportunities here. In most African countries, we don’t even have airlines going there. You spend almost a day just to go from there to DR Congo. But it’s a two-hour, 15-minute flight from Lagos here. Nigerians go to a lot of places, and you have to go either to Ethiopia and then come back and all that.”
“We’ve supported Air Peace a lot, Ibom Air and most of the other airlines. In fact, when the industry was a bit skeptical about financing aviation, we were the ones that took the bull by the horn and we started supporting. This is just another step we are taking in the right direction,” he said.
