Aircraft scarcity, rising lease rates and higher financing costs are making fleet growth more difficult. ACC Aviation Associate Director Tristan Brouard outlines the financial, operational and regulatory foundations African airlines need to secure aircraft finance.
African airlines are competing in a global market for a limited supply of aircraft and increasingly expensive capital. Strong passenger demand does not guarantee that an operator can secure the right aircraft on commercially sustainable terms, particularly when thin margins, currency volatility and higher operating costs affect its risk profile.
Access to aircraft finance increasingly depends on whether an airline can demonstrate transparent financial controls, a commercially aligned fleet plan, regulatory compliance, operational reliability and proactive communication. These factors influence whether finance is available, the price an airline pays and the conditions attached to a transaction.
African airlines are pursuing growth in a global aviation market where aircraft availability is constrained, lease rates are rising and capital is becoming more expensive. Passenger demand may support expansion but converting that demand into viable routes increasingly depends on whether operators can secure the right aircraft and convince financiers and lessors that the associated risks can be managed.
Speaking at the first AviaDev Finance and Leasing Forum, held during AviaDev Africa 2026 in Gaborone, Botswana, from 10 to 12 June, ACC Aviation Associate Director Tristan Brouard examined the pressures affecting aircraft availability and financing, and what African operators need to do to compete more effectively for both.
The forum brought financiers, lessors, manufacturers, insurers and airline operators together to discuss the structures, risks and commercial considerations that often remain behind closed doors. Its inclusion in the AviaDev Africa programme reflected the practical connection between route development, fleet access and finance: identifying a commercially promising route is of limited value if an airline cannot obtain a suitable aircraft on financially sustainable terms.
Brouard’s assessment placed Africa’s financing challenges within the wider international market. Aircraft and capital are allocated globally, which means African operators are competing with airlines in other regions for the same assets and sources of finance. Transactions completed elsewhere influence aircraft values, lease rates, financing costs and the terms available to operators across the continent.
Although global traffic recorded a 3.4% contraction in April, largely because of reduced demand and traffic in the Middle East, year-to-date traffic remained 2.1% higher. Load factors stood at 83.1%, indicating that underlying passenger demand remained resilient despite uneven market conditions.
Strong demand has coincided with constraints throughout the aircraft supply chain. Original equipment manufacturers continue to manage substantial delivery backlogs, pushing airlines towards dry-lease and wet-lease markets when new aircraft are unavailable or delayed. Engine-related disruption has also kept serviceable aircraft on the ground and slowed the return of aircraft to the market.
With fewer aircraft available, older jets are remaining in service for longer. Their continued use is supporting asset values and placing upward pressure on lease rates, particularly in the narrowbody market. Brouard pointed to the Airbus A321neo as an example of an aircraft attracting unprecedented lease rates.
Higher global interest rates are adding another layer of cost. Lessors and financiers must generate returns that reflect their own funding costs, with those increases ultimately passed on to airline operators. African carriers must consequently secure aircraft in a market characterised by limited supply, firm asset values and more expensive finance, while managing operating costs that already exceed those faced by many international competitors.
Africa’s passenger growth prospects make the need to address these constraints particularly pressing. While global traffic declined in April, African traffic remained 2.8% higher. Year-to-date growth was approximately 10%, with load factors approaching 80%. Longer-term forecasts frequently presented indicate that African aviation could double by 2040. The continent is home to approximately 18% of the world’s population but accounts for only 2% of global air traffic, leaving considerable scope for expansion as markets develop and more people gain access to air transport.
That potential, however, has not yet translated into comparable financial performance. African airlines earn an average net profit of approximately US$1.30 per passenger, compared with a global average of US$7.90. Fuel prices can be a third higher than those paid by operators elsewhere, while taxes, fees and charges in some African markets significantly exceed European levels. In certain countries, the difference can be almost threefold.
Thin margins reduce airlines’ ability to absorb lease-rate increases, exchange-rate movements or unexpected maintenance costs. They also affect how financiers and lessors evaluate an operator’s ability to meet its obligations throughout the term of an agreement.
Brouard identified operating costs, rather than passenger demand, as the principal barrier to African aviation’s growth. An airline may serve a market with strong underlying demand and high load factors, yet still struggle to generate sustainable returns if fuel, taxes, airport charges, aircraft financing and other operating expenses consume most of its revenue.
Access to capital is further complicated by the risk premium attached to African transactions. Some leasing companies impose additional costs of as much as 25% when placing aircraft with African operators. Currency volatility and restrictions affecting the repatriation of funds also influence financing and leasing decisions, particularly where payments must be made in foreign currency.
Brouard rejected the proposition that Africa simply lacks sufficient capital. In his assessment, funding is available, but airlines must be properly prepared to access it.
“Capital follows credibility,” he said.
For lessors, lenders and investors, credibility is established through the quality of an airline’s financial information, governance, fleet planning, regulatory compliance, operational performance and communication. Each factor provides evidence of whether the operator understands its risks and can manage an aircraft or financing agreement over its full duration.
Audited financial statements and clean corporate structures form the starting point. Transparent accounts allow potential partners to understand the condition of the business, while complicated ownership arrangements or incomplete financial records can slow due diligence and increase perceived risk. As Brouard observed, “Transparency builds trust faster than any pitch deck.”
Fleet decisions must also be tied directly to the airline’s commercial objectives. Aircraft cannot be acquired on the strength of growth projections alone; each addition requires a credible plan showing how it will support profitable operations. The aircraft type, capacity, range and cost structure must match the routes the airline intends to operate and the revenue those markets can realistically generate.
Regulatory and safety credentials carry similar weight. Ratification and effective implementation of the Cape Town Convention can reduce country-level risk by giving asset owners greater confidence that aircraft can be recovered when an operator defaults. Brouard cited Nigeria’s adoption of the convention as an example of structural reform contributing to greater confidence among aviation financiers.
At an airline level, a clean Operational Safety Audit record can strengthen an operator’s position. Lessors and investors also examine maintenance records and operational indicators, such as on-time performance. Poor punctuality may indicate wider weaknesses in fleet reliability, maintenance planning or operational control, while sustained on-time performance can build confidence among passengers and financial partners.
Credibility must be maintained after negotiations begin. Proactive communication allows an airline to address emerging concerns before they become material problems, keeping the transaction moving and preserving the relationship between the operator and its financing or leasing partners.
Alternative structures may broaden the options available to African carriers. Brouard noted that some operators now lease airframes and engines separately instead of combining them under a single agreement. Equity injections and strategic partnerships can also provide additional routes to capital.
The emergence of new financing and leasing structures does not remove the need for stronger airline fundamentals. Flexible agreements can help operators manage aircraft and capital requirements, but they cannot compensate for weak financial controls, an unsuitable fleet strategy or poor regulatory and operational performance.
Opening African air transport markets could reinforce the commercial case for investment. Brouard described open skies as the “ticket to demand”, allowing airlines to reach new markets and build larger networks. Greater market access, however, must be accompanied by commercially viable operations and the institutional safeguards required by investors and asset owners.
Africa’s aviation growth prospects are not being held back by a lack of passengers or potential routes. The more immediate constraint lies in the cost of operating those routes and the ability of airlines to demonstrate that they can deploy aircraft profitably, manage risk and meet their financial obligations.
In a market where aircraft and capital remain scarce, credibility becomes more than a reputational advantage. It directly affects whether an airline can obtain an aircraft, the price it pays and the terms it receives. For African operators seeking to translate traffic growth into sustainable network expansion, preparation may prove as important as demand.