Minister of Aviation and Aerospace Development, Festus Keyamo, SAN, disclosed on Thursday that the Federal Executive Council (FEC) approved two major reforms: the settlement of the long-standing concession dispute over the Murtala Muhammed Airport Terminal Two (MM2) in Lagos and the creation of a Nigerian aircraft leasing company.
Keyamo made the announcement while addressing State House correspondents after the FEC meeting presided over by President Bola Tinubu at the Presidential Villa, Abuja, describing both decisions as major turning points for the aviation industry.
End of a 20-Year MM2 Concession Battle
According to the minister, the government has finally resolved a dispute that lasted over two decades between the Federal Government and Bi-Courtney Aviation Services Limited, owned by businessman Wale Babalakin.
The disagreement centred on multiple issues, including ownership rights, operational control of domestic terminals, financial claims, and exclusivity provisions tied to the concession agreement.
Keyamo confirmed that the most contentious aspect—the Supreme Court-awarded N132 billion damages claim plus accumulated interest—has been waived by the concessionaire as part of the settlement.
He said:
“The first thing we told him was to write off the N132 billion plus interest. Nobody is going to pay that, and he agreed and wrote it off.”
He also revealed that Bi-Courtney agreed to relinquish its claim over the Murtala Muhammed Airport Terminal One (MM1), which had been a major point of contention.
“We told him to hand back the local airport (MM1) to the federal government. We cannot leave the entire domestic aviation operations in Lagos in private hands. He agreed,” he stated.
Another key revision to the agreement involved the removal of exclusivity rights that had previously limited competition within Lagos airport operations.
“That clause was not right, even for security reasons. He agreed, and we removed it,” Keyamo added.
In return, the Federal Government agreed to return a previously abandoned Hotel and Conference Centre near MM2 to the concessionaire for redevelopment under a shared arrangement, with a 24-month completion deadline.
“We gave it back to him to complete and run on a shared basis with the federal government. He has 24 months to deliver it,” the minister said.
He also noted that MM2 would now be expanded to accommodate regional flights and generate revenue for the Federal Government moving forward.
“At the end of the day, it was give and take. He made concessions, and we also made concessions. Both sides benefited,” he said.
A formal signing ceremony involving all stakeholders is expected to be held in Lagos to finalise the agreement.
New Aircraft Leasing Firm to Support Airlines
Beyond the concession settlement, the FEC also approved the establishment of a Nigerian aircraft leasing company structured as a Special Purpose Vehicle (SPV), aimed at addressing persistent aircraft access challenges faced by local carriers.
Keyamo described the initiative as a “game changer” for the aviation sector, noting that many Nigerian airlines currently struggle with aircraft leasing arrangements, which often lead to operational disruptions.
“The major problem of private operators in Nigeria has been access to aircraft and equipment. Nigeria is unique because our aviation industry is almost entirely run by the private sector,” he said.
He explained that the new leasing company will provide a central platform for airlines to access aircraft on both short-term and long-term leases, reducing dependence on foreign lessors.
“Instead of airlines going all over the world looking for aircraft, there will now be a local platform to lease aircraft on both short-term and long-term basis,” he added.
The minister noted that frequent lease failures and repossessions have contributed to flight delays and cancellations across the country.
“Some aircraft come into the country and within three months, they are gone because operators cannot meet lease obligations. That is why you see disruptions,” he said.
Under the new arrangement, the Federal Government will not directly fund the leasing company but will provide guarantees to support leasing agreements and aircraft repossession mechanisms, while also holding equity in the venture.
“The role of government is to guarantee the leases. We are not putting in funds, but we will have equity in the company and earn returns,” Keyamo explained.
He further disclosed that international and African investors have already shown strong interest in the project, citing Nigeria’s large aviation market and passenger demand.
“Investors are already chasing us. We have the market, the traffic, the population and the routes. This is the Nigerian aviation franchise we are selling to the world,” he said.
Keyamo added that President Tinubu has directed relevant ministries—including Finance, Justice, and Trade and Investment—to finalise the structure of the SPV.
He expressed optimism that the initiative would strengthen local airlines and help them compete more effectively with foreign carriers, which currently dominate the majority of international routes in and out of Nigeria.
“This is a major step towards empowering our local airlines to take back their market share. In the next few months, Nigerians will begin to see the impact,” he said.