NEW CASH FOR AFRICAN AIRLINES

AU Group MEA and EIRS launch insurance-backed platform to unlock aircraft financing across Africa

By Francis Maingaila

LUSAKA, Zambia — African airlines could soon have greater access to financing for aircraft and engines following the launch of a new insurance-backed aviation finance platform by AU Group MEA and EIRS.

The two companies say the AU EIRS Aviation Cover is designed to help airlines overcome difficulties in securing funding while giving banks and other lenders greater protection against the risk of default.

According to AU Group MEA Chief Executive Officer Aurélien Paradis, the platform can provide up to 90 percent indemnification of missed principal and interest payments on eligible aircraft and engine financing transactions.

Paradis said the cover includes new aircraft, mid-life and refurbished aircraft, as well as new and refurbished engines.

He said the broader coverage reflects the reality of African aviation, where many airlines rely on used and refurbished aircraft as they expand their fleets.

Paradis said the main objective was to remove some of the barriers that have limited access to aviation capital across Africa and the Middle East.

He said transferring part of the lender’s risk to highly rated insurers could give banks and other financiers greater confidence to support airlines.

EIRS Chief Executive Officer Abhishek Jain said the partnership combines global insurance expertise with knowledge of African markets.

Jain said financing solutions designed outside the region do not always reflect the conditions faced by African airlines and financiers.

He said the new platform had therefore been developed to provide financing solutions that better respond to the realities of emerging aviation markets.

Jain said EIRS would contribute regional relationships and market knowledge, while AU Group MEA would provide access to global insurance capacity and expertise in complex risk-transfer solutions.

The companies said the initiative comes as Africa’s aviation sector continues to grow despite persistent financing challenges.

They said more than 1,500 aircraft are currently on order across Africa and the wider Middle East, while many airlines continue to operate ageing fleets because of limited funding.

The companies said banks often remain cautious about airline credit exposure in emerging markets, while financing for mid-life aircraft and engines remains underserved.

They said traditional export credit agency financing can also be lengthy and restrictive, making it difficult for some airlines to secure funding quickly.

Paradis said reducing lender risk could encourage more financial institutions to finance airlines across the region.

He said the platform could give airlines access to financing options that better reflect how fleets are developed in African markets.

Jain said improved access to aviation finance could support fleet renewal, route expansion and stronger regional connectivity.

The companies said African aviation contributes about US$75 billion to the continent’s economy and supports 8.1 million jobs, according to the International Air Transport Association.

They said airlines such as Ethiopian Airlines, Airlink and RwandAir have continued to expand routes and invest in fleet growth as demand for air travel increases.

The companies said the new platform could help address one of the sector’s biggest challenges by widening the financing options available to airlines seeking aircraft and engines.

They said increased access to capital could support fleet modernisation, attract investment and strengthen the aviation sector’s contribution to economic growth across Africa.

AU Group MEA, which has operated since 1929, specialises in credit and political risk management, surety and working capital financing and operates in 50 countries.

EIRS, a subsidiary of ETG Group, was established in 2019 and operates across 11 African markets, with strategic hubs in Dubai and London.

The companies said combining global insurance capacity with regional expertise would help unlock more aviation financing and support the next phase of growth in Africa’s aviation industry.