Federal Government puts an end to two-decade-long MM2 controversy, gives green light to airplane rental company – Keyamo

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Festus Keyamo

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By Johnbosco Agbakwuru

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Minister of Aviation and Aerospace Development, Festus Keyamo, SAN, on Thursday said that the Federal Executive Council (FEC) has approved the resolution of the long-standing concession dispute surrounding the Murtala Muhammed Airport Terminal Two (MM2) in Lagos, alongside the establishment of a Nigerian aircraft leasing company to support local airlines.

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Keyamo announced this while briefing State House correspondents at the end of FEC meeting, presided over by President Bola Tinubu at the Council Chamber, Presidential Villa, Abuja.

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He said the council approved two major memos presented by the aviation ministry, describing both decisions as “significant milestones” for the sector.

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According to Keyamo, the federal government has finally settled the over 20-year dispute with Bi-Courtney Aviation Services Limited, owned by businessman Wale Babalakin, over the MM2 concession.

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He pointed out that the dispute, which spanned multiple administrations, involved several contentious issues, including the control of the domestic terminal (MM1), financial claims against the government, and exclusivity rights.

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He said: “As you all know, there has been a long-standing dispute between the concessionaire and the federal government over MM2. Today, I can happily tell you that this government has resolved that issue once and for all.”

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The minister explained that one of the major sticking points was a Supreme Court judgment which awarded Bi-Courtney N132 billion in damages, with interest accruing from 2009.

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He, however, revealed that the concessionaire agreed to waive the claim as part of the negotiated settlement.

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“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,” the minister stated.

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He added that Bi-Courtney also relinquished its claim to the Murtala Muhammed Airport Terminal One (MM1), which it had argued was included in the original concession agreement.

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“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,” Keyamo said.

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On exclusivity, the minister said the clause granting Bi-Courtney sole rights to operate a private airport within Lagos was also removed.

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“That clause was not right, even for security reasons. He agreed, and we removed it,” he added.

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In return, the federal government agreed to restore ownership of the long-abandoned Hotel and Conference Centre opposite MM2 to the concessionaire.

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Keyamo said the facility, whose construction had stalled for years, must now be completed within 24 months.

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“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. We will not tolerate further delays,” he said.

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The minister further disclosed that the government will permit regional flight operations from MM2 and expand the terminal’s apron to accommodate more aircraft.

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He noted that the new agreement would also ensure that the federal government begins to earn revenue from MM2 operations, which had not been the case during the dispute period.

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“At the end of the day, it was give and take. He made concessions, and we also made concessions. Both sides benefited,” Keyamo said.

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He added that a formal signing ceremony involving all stakeholders would be held in Lagos, where full details of the agreement would be made public.

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On the second memo, the minister announced that the FEC approved the establishment of a Nigerian aircraft leasing company, structured as a Special Purpose Vehicle (SPV), to be driven by private sector investment.

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He described the initiative as a “game changer” aimed at addressing the persistent challenge of access to aircraft by Nigerian airlines.
“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.

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Keyamo explained that the new leasing company would aggregate aircraft for local airlines, reducing their dependence on foreign lessors and improving operational stability.

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“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 said.

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He noted that many Nigerian airlines currently struggle with leasing arrangements, leading to frequent flight delays and cancellations.

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“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 added.

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Keyamo clarified that the federal government would not directly fund the leasing company but would provide guarantees to support lease financing and aircraft repossession.

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“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,” he explained.

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He disclosed that several major African and international investors have already expressed interest in the project, citing Nigeria’s large aviation market and strategic location.

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“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.

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According to him, the President has directed the Minister of Aviation to work with the Ministers of Finance, Justice, and Trade and Investment to finalise the structure of the SPV.

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Keyamo expressed optimism that the initiative would significantly boost the capacity of Nigerian airlines to compete with foreign carriers, which currently dominate about 95 per cent of international traffic to and from Nigeria.

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“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.

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