InterGroup Chief Financial Officer, Mary Olowo-Sokeye, said leasing remained the most practical entry strategy for Nigeria’s startup carriers. She stressed that the best financing for new airlines avoids crippling debt, allows operational flexibility, and preserves capital for growth.
Speaking to New Telegraph at the weekend, Olowo-Sokeye explained that startup carriers often miscalculated the risk of committing to expensive repayment schedules before achieving operational stability. She said: “For new airlines or people trying to get into the airline space, definitely consider the leasing option.
“You never want to own it outright at the beginning. You just use it to make money, paying a leasing fee which is usually lower than the cost of ownership, while the servicing remains with the owner.” She compared aircraft ownership to buying a luxury car, where a $50 million purchase could tie an airline into years of high-interest repayments.
Leasing as the best financing for new airlines, according to her, allows operators to focus on building revenue streams without crippling capital commitments, adding that lower upfront costs make leasing the best financing for new airlines. Olowo-Sokeye said new carriers must protect their liquidity by avoiding heavy initial capital outlays. “If you don’t have a lot of cash, the lease-back option is better.
You can use those funds for operations, staffing, and marketing instead of ownership costs,” she explained. She further noted that leasing would keep more working capital available to handle fluctuations in passenger demand and seasonal changes. “If your cash flow is negative, no CEO or investor will approve new investments,” she warned.
By choosing leasing as the best financing for new airlines, CFOs can focus on maintaining positive cash flow and meeting operational obligations without overextending. “The servicing and all of that stays with the owner,” OlowoSokeye said, adding, “so only have to pay a fee to use it and gain what you need. This reduced liability reinforces leasing as the best financing for new airlines, especially in early operational years.”
Speaking on protection against asset depreciation risks, she hinted that purchasing aircraft exposes carriers to depreciation, locking them into aging assets, stressing that leasing offers fleet flexibility, enabling upgrades without major losses. The finance expert urged new carriers to learn from past operators adopt what worked, avoid mistakes, and keep fleet assets flexible through leasing.
Nigeria’s aviation sector she reiterated faces heavy exposure to foreign exchange risks. Olowo-Sokeye said a large percentage of airline expenses are FX-linked. Furthermore, she stated that devaluation increases the naira required for dollar-denominated leases.
“When I took this role as CFO three years ago, it was N460 to the dollar. Today it’s N1,550. Leasing as the best financing for new airlines allows operators to renegotiate terms or adapt fleet sizes faster than ownership models. While leasing is the best financing for new airlines, Olowo-Sokeye said targeted government funding could reshape the competitive landscape for established carriers like Air Peace.
“Just imagine if Air Peace was granted $300 million. That would make a huge difference in the size of their fleet, the number of routes they can cover, the innovation they can introduce, and the systems they can put in place. She called for grants, export credit schemes, and lowinterest loans to strengthen industry capacity.
Olowo-Sokeye advised that even with the best financing for new airlines, executives must diversify investments and maintain rigorous oversight. “There’s not one way to skin a cow or cook a fish. You have to diversify,” she said. She encouraged reinvesting profits into ventures outside core airline operations to create additional income streams and buffer against downturns.
𝗙𝗼𝗹𝗹𝗼𝘄 𝗢𝘂𝗿 𝗪𝗵𝗮𝘁𝘀𝗔𝗽𝗽 𝗖𝗵𝗮𝗻𝗻𝗲𝗹 𝗧𝗼 𝗚𝗲𝘁 𝗟𝗮𝘁𝗲𝘀𝘁 𝗡𝗲𝘄𝘀 𝗔𝘀 𝗜𝘁'𝘀 𝗗𝗿𝗼𝗽!
