Nigeria Resolves 20-Year MM2 Dispute, Approves Aircraft Leasing Firm

The Nigerian government has approved a landmark resolution to the long-standing concession dispute over Murtala Muhammed Airport Terminal Two (MM2), ending a legal battle that has persisted for over 20 years. The decision by the Federal Executive Council (FEC), announced by Minister of Aviation and Aerospace Development Festus Keyamo, also includes the establishment of a new private-sector-led Nigerian Aircraft Leasing Company designed to help domestic carriers acquire aircraft on more competitive terms.

This dual announcement signals a significant shift in Nigeria's aviation policy, aiming to stabilize the investment climate for airport infrastructure and directly address the chronic challenges airlines face in fleet renewal. The resolution with the terminal operator, Bi-Courtney Aviation Services Limited, is particularly noteworthy, as it resolves a dispute that originated from a 2003 agreement and has been a persistent source of friction between the private operator and the government.

Terms of the Landmark Settlement

The agreement reached between the federal government and Bi-Courtney brings a definitive end to multiple lawsuits. According to the Ministry of Aviation, a central component of the settlement is Bi-Courtney's waiver of a N132 billion judgment debt awarded in its favor by the Supreme Court of Nigeria, which has been accruing interest since 2009.

In exchange, the government has made several concessions. Bi-Courtney will relinquish all claims to the government-operated Murtala Muhammed Airport Terminal One (MM1), ensuring the Federal Airports Authority of Nigeria (FAAN) retains permanent control. The agreement also grants Bi-Courtney the right to commence regional flight operations from MM2 and mandates the company to complete a long-abandoned hotel and conference centre project opposite the terminal within a strict 24-month deadline.

Crucially, the FEC approved the removal of an exclusivity clause from the original concession. This clause had previously barred the development of other private airports within a defined radius of Lagos, effectively stalling projects like the proposed Lekki Airport. Its removal clears a major regulatory hurdle for future infrastructure investment in the region.

A New Era for Aircraft Leasing

Simultaneously, the FEC greenlit the formation of a Nigerian Aircraft Leasing Company, structured as a Special Purpose Vehicle (SPV). Minister Keyamo described the initiative as a "game-changer" that "eliminates the long-standing challenges Nigerian airlines face in accessing aircraft on competitive terms."

The leasing company will be led by the private sector, but with government backing to provide guarantees for lease financing and aircraft repossession. This model directly addresses the high-risk perception international lessors often have of Nigerian carriers, which results in prohibitively high leasing costs. By providing a sovereign-guaranteed platform, the government aims to de-risk the process and position Nigeria as an aviation financing hub in Africa.

Industry and Stakeholder Impact

The resolution carries significant implications for multiple stakeholders. For domestic Nigerian airlines, the new leasing company offers a pathway to modernize fleets, potentially reducing operational disruptions caused by aging aircraft. For the Federal Airports Authority of Nigeria (FAAN), it secures permanent control over MM1 and establishes a revised revenue-sharing agreement for MM2 operations. The removal of the exclusivity clause is a major victory for the Lagos State Government, enabling it to move forward with the Lekki Airport project.

This development is also seen as a positive signal for public-private partnerships in African aviation. The MM2 dispute, concerning Africa's first privately funded airport terminal, has been a cautionary tale for investors. Its resolution could restore confidence in Nigeria's PPP framework. The Maevis Nigeria Limited vs. FAAN dispute in 2012, which also involved a terminated concession and prolonged legal battles, highlighted the historical volatility of such agreements in the country. This new settlement suggests a move towards more stable, negotiated outcomes.

What Comes Next

Following the FEC's approval, several milestones are anticipated. A formal signing ceremony for the settlement agreement is expected to take place in the second quarter of 2026. The Nigerian Aircraft Leasing Company is expected to become operational in 2027, though a precise timeline has not been disclosed.

Bi-Courtney Aviation Services is now under a confirmed deadline to complete its hotel and conference centre project by April 2028. This will be a key performance indicator of the renewed partnership's effectiveness.

Why This Matters

This dual decision by the Nigerian government represents a strategic effort to overhaul two critical areas of its aviation sector. Resolving the 20-year MM2 dispute removes a major source of uncertainty for investors and operators, while the creation of a sovereign-backed leasing company provides a tangible solution to the persistent fleet acquisition challenges that have constrained the growth of domestic airlines. Together, these actions could unlock significant private investment and enhance the operational capacity of Nigeria's aviation industry.