Allen Onyema, Chief Executive Officer of Air Peace, has disclosed how his airline was defrauded of $2 million by a foreign aircraft leasing company.
Speaking at the 29th annual conference of the League of Airport and Aviation Correspondents (LAAC) in Lagos, themed “Financing Aviation in Nigeria: Risks, Opportunities and Prospects,” Onyema explained that he deliberately chose not to pursue legal action to avoid worsening Nigeria’s 12-year unofficial blacklist status over past breaches of contract.
Onyema recounted that despite knowing the foreign company’s intent to defraud, he allowed the $2 million transaction to proceed to protect the reputation of Nigerian airlines and prevent further stigmatization. “If I had stopped them, Nigeria would have been further blacklisted. They wanted us to continue flying their aircraft despite issues, which could lead to perceptions that Nigerian airlines are unsafe,” he said. The leasing company kept the aircraft and never returned the parts as per contract conditions, and despite government interventions, the company absconded with the funds.
He emphasized that Nigerian airlines had suffered from negative perceptions, especially regarding payment defaults and court disputes with lessors, which contributed to the country’s blacklisting. Onyema maintained that his decision to sacrifice reclaiming the money was to safeguard the country’s aviation industry and its future access to dry-leasing opportunities.
Onyema also addressed the challenges of financing in Nigerian aviation, highlighting banks’ stringent lending conditions driven by concerns over financial integrity. “Funding is very expensive, about 35%, and accessibility is limited. Banks demand extreme collateral because past borrowers misused funds and defaulted on repayments,” he said.
He called for an industry-wide self-introspection on financial discipline and integrity, asserting that Air Peace’s growth was rooted in demonstrating such values. “Today, I can walk into any bank and get the necessary funding without excessive collateral because we have earned that trust,” Onyema noted.
Onyema advocated for government intervention by creating a dedicated funding window for airlines through the Central Bank of Nigeria or Bank of Industry, similar to models in Egypt and other countries. He praised the government’s efforts to stabilize the exchange rate and provide indirect support like dry-leasing, which he believes will transform the Nigerian aviation sector.
“For the first time in 12 years, Nigeria will soon witness the arrival of a dry-leased aircraft, marking a new era for the industry,” he announced. Onyema explained dry-leasing as the common practice among major global airlines such as Delta and Emirates, allowing them to operate large fleets efficiently, which would be impossible if relying solely on wet-leases due to cost.
In summary, Onyema’s account sheds light on the complex challenges faced by Nigerian airlines, including financial fraud, restrictive funding environments, and the critical importance of integrity and government support to revive and sustain the sector’s growth.
