Aviation experts have urged state governments to prioritise supporting infrastructure and sound business planning before committing billions of naira to aircraft acquisition and airline operations, warning that poorly conceived ventures could become drains on public finances.
The warning comes as more states venture into commercial aviation. From Akwa Ibom’s Ibom Air to Enugu Air, Cross River’s Cally Air and Bayelsa’s Pioneer Airlines, governments are investing in airlines to improve connectivity, stimulate tourism, attract investors and create jobs.
Speaking with LEADERSHIP, the experts said a state’s location, airport infrastructure, market potential, competition and operational capacity should inform the decision to establish an airline.
Infrastructure Before Aircraft Acquisition
Managing director of FlyBird Airline, Dr Akagwu Arume, said states must develop the infrastructure needed to sustain commercial aviation before establishing airlines.
“The states must first develop these infrastructures before setting up these airlines,” he said.
He advised governments to avoid ambitious expansion plans, invest in human capital and build operational capacity gradually. He also called for professional management and operational independence, saying airline executives should make commercial decisions without undue government interference.
Similarly, aviation analyst Frank Oruye questioned the planning behind some state-backed projects, citing the Ogun State-backed Gateway Air. He argued that poor road access to the airport raised questions about the broader planning and economic rationale for the investment.
Airlines As Prestige Projects
Oruye said some state governments appeared to regard airline ownership as a prestige venture rather than a commercial investment requiring careful assessment.
“Some of them are taking on airline ownership as a prestige venture, sure enough, and it’s going to ruin them even more. Because taking on aircraft, it’s not a child’s play – the resources required,” he said.
He warned that states facing competing financial obligations could worsen their fiscal pressures by committing substantial public resources to aircraft acquisition and airline operations. Governments, he said, must establish the economic justification for such investments before committing public funds.
Financial Pressures And Sustainability
Airlines operate in a capital-intensive industry, contending with volatile aviation fuel prices, foreign exchange fluctuations, aircraft leasing and maintenance costs, insurance premiums, airport charges and regulatory obligations.
A former Nigerian Airways pilot, who spoke on condition of anonymity, said revenue figures alone could not establish an airline’s financial health.
“An airline may generate substantial revenue without making a profit. It may also record an operating profit but struggle to generate enough cash to service debt, meet lease payments or finance aircraft replacement,” he said.
He added that state-backed airlines should be assessed by their ability to cover operating costs, meet financial obligations, generate positive cash flow and deliver measurable economic benefits, rather than by aircraft acquired, routes announced, passengers transported or jobs promised.
The absence of publicly accessible audited financial statements from some state-owned airlines, experts noted, also makes it difficult to establish their profitability, liabilities, operating costs and dependence on government funding.
Regional Aviation And Aircraft Leasing
Experts are divided over the justification for state-backed airlines. While some believe they can bridge connectivity gaps and stimulate economic development, others warn that politically motivated ventures could become financial burdens.
Former Rector of the Nigerian College of Aviation Technology, Capt. Sam Caulcrick, argued that regional airlines could be justified in areas where private operators had abandoned routes because of inadequate commercial returns.
He cited the North-East, where six states have been exploring the possibility of establishing airlines, saying the region’s connectivity challenges required a different approach.
According to him, such airlines should begin with smaller aircraft, particularly turboprops, to serve regional routes before expanding.
“They should not start by competing with these big guys. Let them just move their people around their zone. They call it regional aviation, right? Small aeroplanes, propeller aeroplanes. Move your people around. With time, you will grow. And not compete,” he said.
Comparing the situation with Alaska in the United States, Caulcrick said regional aviation there developed in response to inadequate services from larger commercial operators.
He maintained that government investment in aviation should not always be judged by immediate financial returns where the objective is to provide essential connectivity and stimulate economic activity.
“When a man is spending money, he is not spending money for profit. He is spending money for necessity. So this is necessity,” he said.
Caulcrick also proposed government-backed aircraft leasing as an alternative to direct airline ownership. He identified high leasing costs as a major constraint facing Nigerian airlines and argued that governments could use access to relatively cheaper capital to make aircraft available to private operators at affordable rates.
Citing Cally Air and Gateway Air, where private operators provide operational services, he said:
“Look at it as if they are leasing. They are providing low cost leases. Because it’s government money.
“They have this money now. Government money, they are not borrowing this money. It’s part of their allocation or whatever it is.
“They are leasing at low cost to these airlines. These airlines, they are happy. ValueJet is happy that they run it for Ogun State. Aero is happy doing it for Cally Air.”
He said affordable leasing could reduce aircraft-related expenses and free up resources for other operational costs.
“So they can balance their books. That would pay for the high cost of operations in other areas for them. And that is the sustainability for them,” he said.
However, such arrangements still expose governments to financial risks. Their viability depends on acquisition costs, lease terms and the value received by the state. Below-market leases must be transparently accounted for, with clear provisions covering maintenance, insurance, aircraft utilisation, payment defaults and asset recovery if an operator fails to meet its obligations.
Political Continuity
The survival of state-owned airlines beyond the administrations that establish them is another test of their viability.
Arume said sustainability depends on whether an airline is established to drive economic development or serve political interests. He warned that ventures created for political reasons could collapse with the departure of the governors who established them.
“The question about viability is not the issue. The question that we should be asking ourselves is, is the state airline being put together for political reasons or to drive development in the state?
“If it is to drive development in the state, I would say it is viable. You can use Ibom Air as a case study.
“If it is for political mechanisms, the airline will die with the end of the administration of the governor who set it up,” he said.
He identified Ibom Air as an example of an airline that had benefited from continuity across successive administrations.
Enugu Air: Financial Transparency Questions
Financial experts have raised concerns about Enugu Air’s sustainability, questioning whether its revenue and wider economic benefits justify public investment.
They argued that the absence of publicly available audited financial statements makes it difficult to establish the airline’s profitability, liabilities, operating costs, government subsidies and annual funding requirements.
An investigation by LEADERSHIP revealed that the Enugu State Government committed substantial resources to establishing and expanding the airline, including a reported N41 billion allocation in the 2025 fiscal year for acquiring four aircraft.
Earlier, the then Commissioner for Transportation, Dr Obi Ozo, disclosed in an interview that the initial three Embraer aircraft cost about $40 million, equivalent to approximately N62 billion at the prevailing exchange rate.
The total expenditure on the airline, including aircraft acquisition, operations, infrastructure and related investments, remains unclear.
According to the state’s First Quarter 2026 Budget Performance Report, Enugu Air was its leading internally generated revenue source, recording N11.59 billion during the period.
The airline has also been associated with technical and administrative job creation, including the emergence of an indigene of the state as a pilot.
Its recent launch of the Enugu-Douala route in Cameroon is expected to strengthen cross-border trade, leisure travel and connectivity for members of the South-East diaspora, supporting the state’s ambition to position Enugu as a regional commercial and tourism hub.
Speaking in an exclusive interview with LEADERSHIP, the Senior Special Assistant to Governor Peter Mbah on Policy and Communication, Comrade Ken Ofoma, described the airline as a profitable and sustainable investment that had continued to expand.
He said flights from Enugu to Gatwick Airport in the United Kingdom were expected to commence by December 2026, while a Guangzhou, China, route was projected for the first quarter of 2027.
“So the airline is one of the landmark investments of the state government as it is very much sustainable and also profitable. One of the fastest growing airlines in Nigeria today,” he said.
Ofoma maintained that the airline’s operations had not undermined the state’s capacity to execute development programmes.
“The operation of the airline does not interfere with the state’s execution of its programmes and projects.
“The airline is part of integrated transport reform together with the three ultra modern bus terminals. And all dovetails into the tourism sector development. As you’re aware that about six tourism sites are being currently developed in the state,” he said.
Ibom Air’s Investment Model
Akwa Ibom State-owned Ibom Air was established to provide an alternative revenue source, strengthen the state’s aviation sector and create jobs for its youths.
According to its Group Manager, Marketing and Communications, Aniekan Essienette, the airline has seven Bombardier CRJ900 aircraft and three Airbus A220-300s, bringing its fleet to 10 following the recent acquisition of an A220-300 from Canada.
It serves seven domestic destinations and operates international flights, including services to Accra, Ghana.
However, its financial position remains difficult to assess independently because comprehensive financial statements detailing income, expenditure, liabilities and government support are not publicly accessible.
Sources familiar with its operations told LEADERSHIP that the airline was financially healthy and adequately funded by the Akwa Ibom State Government.
The state Commissioner for Information, Aniekan Umanah, said the government had continued investing in Ibom Air and expanding aviation infrastructure, including a Maintenance, Repair and Overhaul (MRO) facility for routine checks and repairs of domestic and international aircraft.
He said the investments were intended to strengthen the airline and position Akwa Ibom as a destination for tourism, business and investment.
“The airline is well managed and maintained with all the risk factors involved – to live up to its mandate of making Destination Akwa Ibom a reality in line with the ARISE Agenda of His Excellency, Pastor Umo Eno.
“That is why the administration, since coming on board, has been investing in Ibom Air and the expansion of the airport with the complementary Maintenance, Repairs and Overhaul (MRO) facility for routine checks and repairs of both local and international aircraft.
“The idea is to make Akwa Ibom State a destination of choice for visitors, tourists and investors,” Umanah explained.
